Europe "got back" of Greece, Canada should not of States

This week the EU countries agreed to Greece's austerity measures to try to cut its deficit. It couldn't have come at a worse time – not just Greece but Spain, Portugal and Ireland have been having financial crises of their own and it has put pressure on the Euro. This past week, it dropped five cents against the greenback to about $1.36 – and the markets are still nervous. For the currency that was poised barely a year ago to become the world's new reserve currency, and I still think it has that potential, it's been quite a ride.

While the common currency has made quite good sense for business and tourism for the 16 countries that use it – perhaps 17 next year if Estonia as expected joins in – its very genius is also its Achilles' heel. Since there is one currency there is only one monetary policy; in effect, the Eurozone countries are just one country as far as the world is concerned. In the past, if one member state overheated, interest rates would be raised to slam the brakes (tightening); conversely, if a state cooled down the rates would be cut (easing).


With the current scenario all countries have to abide by the policies of Frankfurt which may not necessarily be in their individual best interests; worse if a country really gets into trouble the others may be called upon to bail out their fellow member which is politically unpopular but absolutely necessary to prevent a run on their own bonds. Not to mention other countries which may denominate some of their bonds in euros – including Canada and the United States.

Kicking a country out of the Eurozone is pretty much unthinkable – once one is in they're pretty much in, period. But the downside of integration and open borders is now pretty obvious for all to see, and why any talk of a currency union between Canada, Mexico and the United States is just a bunch of hot air. An open border, at least along the 49th, should be pursued; but I wouldn't want to bail out the US out of its huge debt mess. Let them fix it.

What I would support is a review of NAFTA, to bring it up to date with current circumstances and recognizing that money can now flow across borders with a click of a mouse – even “bonds” are now actually virtual instruments, not really negotiable notes on paper. It also has to settle once and for all the remaining irritants – including lumber, farm supports, and whatever border disputes are outstanding.

I also support closer ties to Europe as is now being negotiated provided we continue to control our own money supply until such time that we are really ready for the next huge step.

The last trade deal we signed was with four relatively small countries – Iceland, Norway, Switzerland and Liechtenstein – all developed countries that generally play by the world trade rules (for the most part) and still at least one party here voted against the treaty. Does a prince from a country the size of Washington DC really pose a threat to our jobs – especially when he's finally cooperating with the rest of the West on secret bank accounts after all these years?   I mean, really.   We're having free trade with Colombia and Costa Rica -- both corrupt in certain respects -- and we're afraid of a few rich Europeans?
 
The Europeans may have each other's back.  But a customs union and a currency union goes too far.   We should of course maintain trade and military ties to the States, and try to make tourism easier both ways.   But they should not expect us Canadians to bail them out -- especially when they've chosen Beijing as their creditor of choice.

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