Wednesday, December 07, 2011

euro and Kyoto both need to die

An excellent piece by Peter Foster. Three eu and Kyoto are both examples of big government gone crazy. They are both imploding. Good. A European free trade zone should replace the eu. Nothing should replace Kyoto.

The foundering this week of not one but two experiments in megalomanic government pretension - the Kyoto Protocol and the European superstate - should provide cause for reflection about the limits of government. Instead, what we are seeing is desperate attempts to paper over the yawning policy cracks.

Both the Durban Kyoto meeting and the eurozone summit are meant to unveil new master plans on Friday. Neither is likely to have much credibility, since most of the details will be "to follow." The difference is that Durban is about proposing unworkable solutions to what may well be a phantom problem, whereas the euro crisis is both genuine and immediate.

Standard & Poor's threat to downgrade both eurozone countries and the European Financial Stability Fund provided an unwelcome advanced verdict on sketchy schemes outlined this week by German Chancellor Angela Merkel and French President Nicolas Sarkozy. The "Merkozy" plans involve tough talk but problematic implementation. There would be tighter fiscal discipline for all 27 EU members, or maybe just the 17 in the eurozone. This discipline would have the teeth of sanctions, but those sanctions would require weighted voting of members. Bizarrely, Merkozy agreed that those forced "haircuts" for Greek bondholders were a terrible idea. Inevitably, they weren't very forthcoming about the real reason: How can you suck bond investors into basket cases unless they know they're going to be bailed out? (Shh. Don't tell taxpayers.)

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