The future of the Euro and EU. [Archive]

Rollo

26th October 2011, 22:46

BDunnell

26th October 2011, 22:54

If Greece were to go back to the drachma their problems would be over in 24hrs

If anyone from the ECB is reading this, all your problems are over.

BDunnell

26th October 2011, 22:55

Basically I think that the EU generally was created to try to stop European countries from hacking each other to pieces the way that they'd done for centuries previous. A common currency I suppose is a noble idea, but was always doomed to fail wasn't it?

But, as stated before, I find the idea of its failure unimaginable in practical terms as well as politically. It is more likely, surely, that some nations will leave.

Gregor-y

26th October 2011, 23:22

I'm kind of hoping it leads to some uniform practices in each Euro country so individual nations don't make the mistakes Greece, Ireland, Spain and so on made. Proper regulation and oversight should be preventing the causes of these problems. The Euro (and the EU in general) is supposed to bind all of the countries closer together, after all.

ArrowsFA1

27th October 2011, 08:33

Is nobody else concerned by this?
Concerned? Yes. Understanding the full implications of it? No

To some extent the crisis seems driven by "market confidence" (lack of) and again politicians are trying (and failing) to react. At the moment the "financial markets" seem to have a grip on determining our future and that's not healthy for Europe or anywhere else.

As for the UK's role...why the rest of Europe doesn't tell us to get stuffed more often I have no idea. Our commitment to Europe is half-hearted at best, and yet our politicians are quite happy to lecture the rest of Europe.

Rudy Tamasz

27th October 2011, 10:12

Proper regulation and oversight should be preventing the causes of these problems.

I work in a multi-layered and highly bureaucratized system. When I hear "regulation and oversight" I know from experience and by instinct the system is falling apart and tightening the screws is only going to postpone its crash. If you want to resolve the systemic issues, you need to change the way the elements of the system function. In a human society (I suspect EU is a human society of sorts) that means changing attitudes and behaviors of people on all levels from irresponsible consumers to power-hungry politicians to greedy bankers. And this is the difficult part.

BDunnell

27th October 2011, 11:19

I work in a multi-layered and highly bureaucratized system. When I hear "regulation and oversight" I know from experience and by instinct the system is falling apart and tightening the screws is only going to postpone its crash. If you want to resolve the systemic issues, you need to change the way the elements of the system function. In a human society (I suspect EU is a human society of sorts) that means changing attitudes and behaviors of people on all levels from irresponsible consumers to power-hungry politicians to greedy bankers. And this is the difficult part.

In the case of the last of the three segments you mention, the greedy bankers, self-regulation has surely been proven to have failed in the crises of recent years.

Knock-on

27th October 2011, 12:46

In the case of the last of the three segments you mention, the greedy bankers, self-regulation has surely been proven to have failed in the crises of recent years.

You could say the same about the Euro. It had checks on borrowing and interest in place that would have helped prevent the mess it's in now but these were ignored by the member states who flounted them. No wonder the southern europeans did the same.

The UK banks did have checks in place (don't know about the Euro ones) but these were dissolved by Gordon Brown who removed the safeguards during his smooze-in with the City. Like a cheap hooker you knew he was going to get screwed and we got left with a STD (stupidity transferred debt).

Alexamateo

27th October 2011, 13:00

The EU will continue because people and goods need to be able to travel freely and do business throughout the region.

The Euro should be abandoned and sooner rather than later. The problem of creating a United States of Europe is that they are not actually a single country. Culture and predominate language limits the mobility of people in a way that is not a problem in the US.

Housing Boom in Spain and Florida?, In the US, Tennesseans and Ohioans move down and keep wages in check, but in Europe I doubt the Dutch and Austrians are moving to Spain. Economy poor in Greece and Mississippi?, move to Virginia or Kansas here but Are Greeks moving to Germany and France?

Economists like Paul Krugman warned of this from the very beginning, arguing that the system is not equipped to deal with asymmetrical shocks. Disciplined countries like Germany are going to have prop up their deadbeat brothers-in-law in Spain, Greece, and Italy or else put those countries through a long period of grinding deflation. Either way, one side or the other is going to revolt. The best solution long term is to let each country have their own currency so they can inflate their way out of this mess.

Whether it was pride or forethought, Britain staying out of the Euro was the right decision.

Mark

27th October 2011, 13:09

BDunnell

27th October 2011, 14:02

The problem of creating a United States of Europe is that they are not actually a single country. Culture and predominate language limits the mobility of people in a way that is not a problem in the US.

I hasten to add that, as far as I can tell, there is no appetite for such a thing. A few politicians may wish for it, maybe, but not many of them either. It won't happen.

Rudy Tamasz

27th October 2011, 16:35

In the case of the last of the three segments you mention, the greedy bankers, self-regulation has surely been proven to have failed in the crises of recent years.

Self-regulation doesn't work when peope and institutions know for sure they'll be bailed out. Let them fail once (like, really fail) and you won't need to come up with new regulations.

BDunnell

27th October 2011, 16:42

Self-regulation doesn't work when peope and institutions know for sure they'll be bailed out. Let them fail once (like, really fail) and you won't need to come up with new regulations.

A fair point, but did those in those instititions that didn't fail whose actions helped precipitate the 2008 crisis believe their firms would be bailed out?

Bolton Midnight

27th October 2011, 16:49

Of course if any country decided to leave the Euro, one thing they wouldn't do is revert back to their pre-Euro currencies. It would require price changes on everything and retooling vending machines etc, they've already done that once, they can't afford to do it again.

What they call it isn't an issue - though it might just be the Greek Euro. But one thing for certain is that it would initially be 1=1 with the Euro (although that will quickly change) and the coins would have exactly the same dimensions and weights, but whatever they do it would be a total nightmare for all concerned!

But if they did that and very soon after 1 Greek Euro = 0.1 normal Euro (which it would as soon as Greece devalue its own currency) you could take them to other countries using the proper Euro and spend them, but a car for 10% of its real value.

They have to change back to the Drachma or a totally new currency they couldn't carry on with the same notes.

Roamy

27th October 2011, 16:56

To how many of 'those wonderful countries' have you been since the Euro was brought in?

Not very many because the value this very bad against the dollar. Italy was not toooo bad in some places.

Bolton Midnight

27th October 2011, 16:57

Not very many because the value this very bad against the dollar. Italy was not toooo bad in some places.

Murder any English students, as that seems to be what Americans do when in Italy.

Mark

27th October 2011, 17:25

But if they did that and very soon after 1 Greek Euro = 0.1 normal Euro (which it would as soon as Greece devalue its own currency) you could take them to other countries using the proper Euro and spend them, but a car for 10% of its real value.

They have to change back to the Drachma or a totally new currency they couldn't carry on with the same notes.

No, you're right of course, but I just don't think going to the Drachma is the best option. At least going 1=1 initially then traders won't have to change all their prices. Of course you'd need different coins and notes. So I guess it's a 'totally new currency'.

Bolton Midnight

27th October 2011, 18:37

It has to be a new one and one they can devalue to get out their current mess, would solve Greece's problems straight away (oh and starting to pay tax may help too).

Rudy Tamasz

28th October 2011, 09:26

A fair point, but did those in those instititions that didn't fail whose actions helped precipitate the 2008 crisis believe their firms would be bailed out?

People in those institutions might not have known for sure they would be bailed out, but they just knew there would be some sort of safety net to prevent them from falling through the cracks. In the modern day world a lot of people live under that perception, whihc quickly becomes a proven fact.

I don't know where this scheme of things originated from. Maybe, from globalization. Everybody and everything is so interconnected these days, that in the short term it is a safer option to bail out losers than let them fail and drag you with them. But then again, every temporary solution in the shape of a bailout or something similar only postpones a major systemic crash.

Malbec

28th October 2011, 10:38

People in those institutions might not have known for sure they would be bailed out, but they just knew there would be some sort of safety net to prevent them from falling through the cracks. In the modern day world a lot of people live under that perception, whihc quickly becomes a proven fact.

I suspect you've never met a banker or understand how they think.

Before the credit crunch hit, they didn't even explore in their minds what would happen if the system failed. They didn't 'know' what safety nets were in place nor did they care, after all the system WOULD NOT FAIL. How could it? The worst case scenario for them was as it had been for decades, an individual bank would make a catastrophic loss for whatever reason and would have its assets bought up by its competitors.

Bankers for the most part do not see the big picture. They are superspecialised and are incredibly good at what they do but often have little idea how the decisions they make affect their bank or industry as a whole. The idea that they would have behaved differently had they known that bailouts were or were not in place is simply false.

Once the credit crunch hit Wall Street hard, a lot of bankers absolutely crapped themselves because George W Bush set an early precedent with Lehmann Brothers, he let it fail as a lesson to other banks. Lehmann Brothers rejected an offer from China or South Korea the week before because they felt that associating themselves with those investors was beneath them. For a while therefore bankers faced the reality that banks would be allowed to collapse entirely and the sense of panic from top down was really something.

in the short term it is a safer option to bail out losers than let them fail and drag you with them. But then again, every temporary solution in the shape of a bailout or something similar only postpones a major systemic crash.

This I agree with, and it is unbelievable that on both sides of the Atlantic there have been no major moves to increase regulation of the financial sector to prevent a repeat, although it is also true that banks now have to increase their liquidity to make another credit crisis less likely.

It is a pity that these companies are able to manipulate government policy so overtly by well placed 'donations' to the right political groups, preventing the right action from being taken.

BDunnell

28th October 2011, 11:58

Bankers for the most part do not see the big picture. They are superspecialised and are incredibly good at what they do but often have little idea how the decisions they make affect their bank or industry as a whole.

Let alone anyone outside that industry.

Malbec

28th October 2011, 13:25

Let alone anyone outside that industry.

No, and the opinions they do hold about people outside the industry are often ignorant and downright offensive.

Valve Bounce

2nd November 2011, 06:32

Papandreou now wants to put the whole deal to a referendum in Greece. Greek cabinet backs referendum - Europe - Al Jazeera English (http://english.aljazeera.net/news/europe/2011/11/201111123935900430.html)

He also has to survive a no confidence motion this Friday. The Greeks love a tragedy. No matter what a TV program is, comedy, war, or a serial, it has to end in tragedy.
I think this will end in a Greek Tragedy.

Knock-on

2nd November 2011, 08:20

SGWilko

2nd November 2011, 09:22

why the rest of Europe doesn't tell us to get stuffed more often I have no idea. Our commitment to Europe is half-hearted at best, and yet our politicians are quite happy to lecture the rest of Europe.

If they stopped dictating to us from Brussels, maybe we would STFU! ;)

SGWilko

2nd November 2011, 09:30

until the whole of Europe is throughly bankrupt and crashes.

10, 9, 8, 7............. ;)

DexDexter

2nd November 2011, 09:32

Not too far from the truth there VB.

Either the nationalistic bandwagon will inspire the Greek people to cut their nose off to spite their face and throw off the Euro or the Greek Govt will wheedle more concessions out of the Euro spineless bureaucrats to bribe the Greek Govt with.

Whatever happens, the Euro is shagged. The next failing country knows they can blackmail the EMF and Euro nations until the whole of Europe is throughly bankrupt and crashes.

The problem for you British is the fact that you'll go bankrupt too but you've got no say in the measures to stop that from happening since you're not part of the Euro. Those spineless bureaucrats will decide your destiny too.

To me the Greeks are mad. Let them say no in the vote, I mean if they want to destroy themselves, go ahead.

SGWilko

2nd November 2011, 09:33

The sooner Germany and to a lesser extent France wise up that Greece needs to be allowed to default NOW the better. The more money they throw has to come from somewhere, and how will that get replenished.

The entire Eurozone is stalling economically, the money will run out and the debts thus far amounted to buy Italian bonds and prop up Ireland/Portugal etc will bring the whole kit and kaboodle to its knees.

It's like watching a cancer spread, knowing that it will claim the life very soon.

SGWilko

2nd November 2011, 09:36

The problem for you British is the fact that you'll go bankrupt too but you've got no say in the measures to stop that from happening since you're not part of the Euro. Those spineless bureaucrats will decide your destiny too.

To me the Greeks are mad. Let them say no in the vote, I mean if they want to destroy themselves, go ahead.

We've been there before effectively after WWII and the debt burden to the USA. Heck, we carried on rationing for quite some time to fund our way out of the mess.

Let the UK housing market crash. Suffer the pain so that, once again, folk don't have to wait until they are in their 30's (assuming they've paid off their education debts) to get on the housing ladder without having to buy a bug hutch next door to the benefit cheats.........

J4MIE

2nd November 2011, 13:49

Cheap holiday to Greece next year, anyone? :s

SGWilko

2nd November 2011, 13:52

Cheap holiday to Greece next year, anyone? :s

It'll be a riot......

Knock-on

2nd November 2011, 14:51

If they quit the Euro Zone, can we get Duty Free? Might pop back for a Giros.

Malbec

2nd November 2011, 19:03

To me the Greeks are mad. Let them say no in the vote, I mean if they want to destroy themselves, go ahead.

Looks like they will not be asked as to whether they agree with the bailout terms but whether they want to remain part of the Euro, something most Greeks will vote yes to.

Thats a clever move IMO. Agree to staying with the Euro and they are agreeing to the bailout terms. They get the Greek population to back the bailout terms without asking them to agree to it directly.

Sonic

3rd November 2011, 08:03

Looks like they will not be asked as to whether they agree with the bailout terms but whether they want to remain part of the Euro, something most Greeks will vote yes to.

Thats a clever move IMO. Agree to staying with the Euro and they are agreeing to the bailout terms. They get the Greek population to back the bailout terms without asking them to agree to it directly.

That's certainly what the French want the question to be...But I think the Greek PM has said he still wants it to be a straight yes/no on the bailout, which is just a weak a$$ move to try an save his own political future.

AAReagles

3rd November 2011, 10:56

...But I think the Greek PM has said he still wants it to be a straight yes/no on the bailout, which is just a weak a$$ move to try an save his own political future.

... or keeping his country from going up in flames. It's one thing to recover economically, it's another to try to accomplish the same amongst the ashes.

anthonyvop

3rd November 2011, 18:21

They better do something fast!

Markit’s manufacturing index for Euroland dropped well below the break-even reading of 50 in October. The data for Italy plunged five points to 43.3, the biggest drop since the survey began in the 1990s.

Italy's 'shock therapy' as eurozone manufacturing buckles - Telegraph (http://www.telegraph.co.uk/finance/financialcrisis/8865957/Italys-shock-therapy-as-eurozone-manufacturing-buckles.html)

555-04Q2

4th November 2011, 09:55

intheway

4th November 2011, 10:13

Nature has a way of weeding out the weak to make way for the strong. It's about survival of the fittest. This goes for business/markets too. Why try and save a failure when something superior can come along and replace it?

I think it's mainly to save the poor innocent souls that are dragged down with it. What needs to change first is the ability of these markets to inflict so much damage on people other than themselves.

chuck34

4th November 2011, 11:37

I think it's mainly to save the poor innocent souls that are dragged down with it. What needs to change first is the ability of these markets to inflict so much damage on people other than themselves.

While I sympathize with people who loose their job. How do you ever stop someone from being hurt when a business fails? Do you propose that the workers all get their pay until something comes along? Do you continually bail out failed businesses? How long do you support the "poor innocent souls"? How do you define "poor innocent souls"? I presume you are speaking of the workers with that? But what about the owner of the business? They sunk their entire lives into a business, and sometimes through no real fault of their own, the business fails, ruining them, causing them to go bankrupt. What about them? Shouldn't we bail them out? Where do you draw the line? Who will pay for all this?

The harsh reality of life is that it sucks from time to time. The sooner people realize this, the better off we'll all be.

SGWilko

4th November 2011, 14:40

While I sympathize with people who loose their job. How do you ever stop someone from being hurt when a business fails? Do you propose that the workers all get their pay until something comes along? Do you continually bail out failed businesses? How long do you support the "poor innocent souls"? How do you define "poor innocent souls"? I presume you are speaking of the workers with that? But what about the owner of the business? They sunk their entire lives into a business, and sometimes through no real fault of their own, the business fails, ruining them, causing them to go bankrupt. What about them? Shouldn't we bail them out? Where do you draw the line? Who will pay for all this?

The harsh reality of life is that it sucks from time to time. The sooner people realize this, the better off we'll all be.

OK - then what about honest hard working folk, who, saved via a work contribution based pension scheme all their working life, who found out upon retirement that the crooked shyster running the business had pissed the pension pot up the wall on fast cars, even faster women and big boats????????

ArrowsFA1

4th November 2011, 14:51

They better do something fast!
Why? Capitalism is working isn't it?

chuck34

4th November 2011, 15:08

OK - then what about honest hard working folk, who, saved via a work contribution based pension scheme all their working life, who found out upon retirement that the crooked shyster running the business had pissed the pension pot up the wall on fast cars, even faster women and big boats????????

If you can prove that the crooked shyster is actually crooked, and that he pissed the pension away, throw him in jail he broke the law. And where was the oversight from the individuals contributing to the pension (did they not check their monthly statements)? How about the company's board of directors?

Better yet, what about the government pension (Social Security) that people are forced to pay into. What happens when crooked politicians raid the "trust fund" to pay for pork barrel crap, and then when you go to retire, there's nothing for you? You had no choice in the matter. You had to pay into the system. And politicians you had no hand in electing/ no control over were the one's responsible? What happens then?

DexDexter

4th November 2011, 20:47

Nature has a way of weeding out the weak to make way for the strong. It's about survival of the fittest. This goes for business/markets too. Why try and save a failure when something superior can come along and replace it?

I don't think anyone really cares about the Greeks,that's not the reason measures are being taken. They're trying to protect other countries and basically the whole world economy from a serious downturn.

While I sympathize with people who loose their job. How do you ever stop someone from being hurt when a business fails? Do you propose that the workers all get their pay until something comes along? Do you continually bail out failed businesses? How long do you support the "poor innocent souls"? How do you define "poor innocent souls"? I presume you are speaking of the workers with that? But what about the owner of the business? They sunk their entire lives into a business, and sometimes through no real fault of their own, the business fails, ruining them, causing them to go bankrupt. What about them? Shouldn't we bail them out? Where do you draw the line? Who will pay for all this?

The harsh reality of life is that it sucks from time to time. The sooner people realize this, the better off we'll all be.

But the problem is that if we don't bail out the Greeks, the crisis may spread to Italy and then on to Spain and also into the United States pretty soon. The same happened in 2008 when the US bank crisis spread here. So it's a choice, either you help them or you run a risk of setting the whole world in flames.

BDunnell

4th November 2011, 20:51

If you can prove that the crooked shyster is actually crooked, and that he pissed the pension away, throw him in jail he broke the law. And where was the oversight from the individuals contributing to the pension (did they not check their monthly statements)? How about the company's board of directors?

Better yet, what about the government pension (Social Security) that people are forced to pay into. What happens when crooked politicians raid the "trust fund" to pay for pork barrel crap, and then when you go to retire, there's nothing for you? You had no choice in the matter. You had to pay into the system. And politicians you had no hand in electing/ no control over were the one's responsible? What happens then?

What choice in the matter does anyone have regarding the actions of those responsible for administering a private sector pension, until it's too late?

chuck34

4th November 2011, 21:19

What choice in the matter does anyone have regarding the actions of those responsible for administering a private sector pension, until it's too late?

Someone has to be doing periodic audits of what the administrators are doing. If they are not, I would not invest.

What about the second part of my question, it's similar to yours. What do you do when you are FORCED to invest in something (Social Security), that is administered by elected officials, the majority of which I have no say over, and then that fund goes bankrupt? That is the very real situation I find myself in. I am 32 years old, I am forced to pay into the Social Security fund, and I can not find one rational person that truly believes that fund will be there when/if I get to retire. How is that fair? How is that system better than allowing individuals to invest their own money as they see fit?

Valve Bounce

4th November 2011, 21:59

I don't think anyone really cares about the Greeks,that's not the reason measures are being taken. They're trying to protect other countries and basically the whole world economy from a serious downturn.

But the problem is that if we don't bail out the Greeks, the crisis may spread to Italy and then on to Spain and also into the United States pretty soon. The same happened in 2008 when the US bank crisis spread here. So it's a choice, either you help them or you run a risk of setting the whole world in flames.

This is so true. Talk here is that it could affect Australia's economy. I think the only guy to end up not suffering any economic fallout is China.

Rollo

4th November 2011, 22:05

What about the second part of my question, it's similar to yours. What do you do when you are FORCED to invest in something (Social Security), that is administered by elected officials, the majority of which I have no say over, and then that fund goes bankrupt? That is the very real situation I find myself in. I am 32 years old, I am forced to pay into the Social Security fund, and I can not find one rational person that truly believes that fund will be there when/if I get to retire. How is that fair? How is that system better than allowing individuals to invest their own money as they see fit?

It's no different whatsoever.

What do you do when you are FORCED to invest in something (Superannuation), that is administered by unelected officials, all which I have no say over, and then that fund goes bankrupt? That is the very real situation I find myself in. I am 33 years old, I am forced at law to pay into a Superannuation fund, and I can not find one rational person that truly believes that the entire superannuation system will be there when/if I get to retire. How is that fair?

chuck34

4th November 2011, 22:13

It's no different whatsoever.

What do you do when you are FORCED to invest in something (Superannuation), that is administered by unelected officials, all which I have no say over, and then that fund goes bankrupt? That is the very real situation I find myself in. I am 33 years old, I am forced at law to pay into a Superannuation fund, and I can not find one rational person that truly believes that the entire superannuation system will be there when/if I get to retire. How is that fair?

It is not fair. I would not advocate for anyone to be forced into such a thing. Quite the opposite in fact I am arguing against forced retirement funds and for individual responsibility in the matter. I am sorry if I was not clear on that point.

Malbec

4th November 2011, 22:36

This is so true. Talk here is that it could affect Australia's economy. I think the only guy to end up not suffering any economic fallout is China.

I don't see how China can remain unaffected either. They're facing their own little credit bubble and their property market is overheating. They need a collapse of their export markets like a hole in the head.

Rollo

5th November 2011, 00:59

It is not fair. I would not advocate for anyone to be forced into such a thing. Quite the opposite in fact I am arguing against forced retirement funds and for individual responsibility in the matter. I am sorry if I was not clear on that point.

In Australia there is a compulsory 9% of people's wages paid into Superannuation Funds. What it's meant is a tremendous source of capital has been created (about A$ 1 trillion), but there has also been an equally tremendous opportunity to cream off 1% of that in Fund Management fees.

Tomi

5th November 2011, 10:07

I don't see how China can remain unaffected either.

China has so big domestic market that is in many ways undeveloped they just have to sell the stuff there that did go to export, so the effect will be quite small.

Malbec

5th November 2011, 13:09

China has so big domestic market that is in many ways undeveloped they just have to sell the stuff there that did go to export, so the effect will be quite small.

Thats my point though, their own economy is overheating with both credit and property bubbles developing. When the bubble bursts China's domestic market will suffer.

anthonyvop

5th November 2011, 14:21

Thats my point though, their own economy is overheating with both credit and property bubbles developing. When the bubble bursts China's domestic market will suffer.

The China Bubble is already bursting. China is just putting band-aids on everything but they will not hold for long.

The real country at risk in the EU is France. Their banks are exposed up to their necks in Greek, Italian, Spanish and Portuguese paper. They can survive a Greek crash but if Italy goes...........The Dollar & Swiss Franc will look real good and Gold will hit $2,400.00

Tomi

5th November 2011, 18:16

Thats my point though, their own economy is overheating with both credit and property bubbles developing. When the bubble bursts China's domestic market will suffer.

I dont think it will to overheat much, their BNP growt has been big even they let it go down 50% its still huge compaired to everywhere else, one thing they could do is to stop borrowing money to broke countries, that would force the countries to look for other ways to balance their economy, for instance printing more money is not a solution, its just a way to move serious problems a little further to the future.

Malbec

5th November 2011, 22:49

I dont think it will to overheat much, their BNP growt has been big even they let it go down 50% its still huge compaired to everywhere else,

China needs its current growth rate to carry on, it can't tolerate a drop in growth. A drop in growth means mass employment and an increase in unrest. Even during the boom days there were large strikes and riots that the official government tried to suppress outside knowledge of. The Chinese government is terrified of the effects of increased unrest which is why they've focused on huge economic growth to prevent this from happening for the last two/three decades.

one thing they could do is to stop borrowing money to broke countries, that would force the countries to look for other ways to balance their economy, for instance printing more money is not a solution, its just a way to move serious problems a little further to the future.

China is not a benevolent lender that is merely happy to earn a bit of interest on the money it lends out. Nor is it stupid.

Those countries that borrow from China in this time of need and I'm talking bailout money not selling them bonds, does so at their peril. The Chinese will extract their pound of flesh in terms of concessions and political favours. It is for a good reason that the EU until this current problem had a policy in place that no individual member would ask the Chinese (specifically and noone else) for bailout money.

Brown, Jon Brow

6th November 2011, 20:12

There used to be a thing called the Latin Monetary Union from about 1865 until the mid 1920s. The currencies although different were supposed to be pegged against each other but even then various countries debased their currencies, Greece was booted out of it in 1908 and the French ignored most of the regulations behind it.
That should have told us that the idea of a common currency was fraught with danger.

Basically I think that the EU generally was created to try to stop European countries from hacking each other to pieces the way that they'd done for centuries previous. A common currency I suppose is a noble idea, but was always doomed to fail wasn't it?
Really I think that the only proper common currency was the system of Denarii and Aurii across the Roman Empire but even that didn't work properly.

Maybe the only other time that a common currency worked was in 1486 under the reign of Richard the Fourth when the egg replaced the worm as the lowest form of currency.

The common currency really came about because the spectacular collapse of the USSR. It was a very natural step to re-unite West and East Germany but in doing so it created a behemoth nation with 30% of Europe's output.

With a unified Germany being much larger than the UK, France or Italy it raised fears of disturbed politcal balance in favour of Germany. The best way to to address this balance was thought to be a big increase in the forces tying the EU together. The Euro was the result of this.

anthonyvop

6th November 2011, 20:57

Crisis averted.
Problem solved (http://www.borowitzreport.com/2011/10/26/greece-offers-to-repay-bailout-with-giant-horse/)

555-04Q2

7th November 2011, 11:47

I don't think anyone really cares about the Greeks,that's not the reason measures are being taken. They're trying to protect other countries and basically the whole world economy from a serious downturn.

Is that such a bad thing? The world has been living beyond its means, governed by a few greedy people. Maybe its time for a change?

SGWilko

7th November 2011, 11:59

Is that such a bad thing? The world has been living beyond its means, governed by a few greedy people. Maybe its time for a change?

It is indeed time for a change. But the pain we will all have to suffer to facilitate that change is gonna hurt.

555-04Q2

7th November 2011, 14:44

It is indeed time for a change. But the pain we will all have to suffer to facilitate that change is gonna hurt.

No pain.....no gain! :)

SGWilko

7th November 2011, 14:46

No pain.....no gain! :)

:laugh: Spoken like a fitness instructor!

555-04Q2

7th November 2011, 14:51

:laugh: :up:

anthonyvop

7th November 2011, 16:59

It is indeed time for a change. But the pain we will all have to suffer to facilitate that change is gonna hurt.

Forcing people to take responsibility for their own lives is like getting stitches.....Yea its gonna hurt but consider the alternative.

Knock-on

7th November 2011, 17:38

Forcing people to take responsibility for their own lives is like getting stitches.....Yea its gonna hurt but consider the alternative.

Wot? Not getting stitches? :confused:

chuck34

7th November 2011, 18:05

In Australia there is a compulsory 9% of people's wages paid into Superannuation Funds. What it's meant is a tremendous source of capital has been created (about A$ 1 trillion), but there has also been an equally tremendous opportunity to cream off 1% of that in Fund Management fees.

The Superannuation Fund sounds very simmilar to our Social Security program. Again, I am very much against FORCING anyone into a system, particularly when corruption and mismanagement are so readily apparent as is the case with the Superannuation Fund and Social Secuity.

Knock-on

8th November 2011, 11:33

Thought you might appreciate a quick overview of economics in the Euro Zone.

Some years ago a small rural town in Spain twinned with a similar town in Greece. The Mayor of the Greek town visited the Spanish town. When he saw the palatial mansion belonging to the Spanish mayor he wondered how he could afford such a house. The Spaniard said; "You see that bridge over there? The EU gave us a grant to build a two-lane bridge, but by building a single lane bridge with traffic lights at either end this house could be built".

The following year the Spaniard visited the Greek town. He was simply amazed at the Greek Mayor's house, gold taps, marble floors, it was marvellous. When he asked how this could be afforded the Greek said; "You see that bridge over there?" The Spaniard replied; "No."

DexDexter

8th November 2011, 14:02

Is that such a bad thing? The world has been living beyond its means, governed by a few greedy people. Maybe its time for a change?

When YOUR business is affected your opinion will change. :rolleyes:

555-04Q2

8th November 2011, 14:49

When YOUR business is affected your opinion will change. :rolleyes:

Yes of course, but my business is progressive and adapts with the times and changes. I have made double the money during the current world recession (2008 - now) than I did in the 3 years before. I just picked up the slack from other companies that liquidated and found new avenues of business to pursue. There is always business out there, some people bother to go out and find it, the rest close down and bitch about it being someone else's fault.

As I said, the weak make way for the strong.

Lousada

8th November 2011, 14:55

DexDexter

8th November 2011, 17:27

Yes of course, but my business is progressive and adapts with the times and changes. I have made double the money during the current world recession (2008 - now) than I did in the 3 years before. I just picked up the slack from other companies that liquidated and found new avenues of business to pursue. There is always business out there, some people bother to go out and find it, the rest close down and bitch about it being someone else's fault.

As I said, the weak make way for the strong.

In my world the strong take care of the weak.

555-04Q2

9th November 2011, 05:40

In my world the strong take care of the weak.

We live in the same world. Take care of elderly people.....yes. Take care of children.....yes. Help sick people.....yes. Help people who run bad businesses.....no.

Almost 7 years ago I started a small sideline business that assists people who want to start a company, market their company, plan etc etc. They get this service for FREE and it costs me a bit of bob every year, but I see it as a better way of giving back to my community than handing out free food at a soup stand that leaves the recipients hungry again the next day. But thats just me!

Back on topic...The Euro Zone can sort itself out if it really wants to, the questions is do the politicians and governments of the Euro Zone have the resolve to do it? I'm sceptical at the moment.

555-04Q2

9th November 2011, 05:42

Amusing. But you do realise those bridges are paid for by EU funds, and not "Euro Zone" funds right? You know that EU to which the UK contributes 57 billion each year.

57 billion Zimbabwean dollars is actually just pocket change ;)

Knock-on

9th November 2011, 12:03

57 billion Zimbabwean dollars is actually just pocket change ;)

When it was abandoned, 1 US$ was the equivalent of 669,000,000,000 Z$ so a mere 57bn Z$ was hardly even pocket change :laugh:

You can buy a $100 Trillion note for a few US$ as a keepsake :D

http://jjttjj.com/zimbabwe-dollars/products/zimbabwe-banknotes-100-trillion-dollars-front.jpg

555-04Q2

9th November 2011, 14:35

:laugh: Monopoly money is worth more :p :

Sonic

9th November 2011, 14:50

I have an almost overwhelming desire to raise my little finger to my lips and yell ONE HUNDRED TRILLION DOLLARS!

Knock-on

9th November 2011, 17:22

I'd just like to take a taxi in Harare and ask the driver if he can break a $100,000,000,000,000 note :D

ioan

9th November 2011, 20:42

I don't think anyone really cares about the Greeks,that's not the reason measures are being taken. They're trying to protect other countries and basically the whole world economy from a serious downturn.

:up:
It took 55 posts for someone to come up with the real reason why Greeks are being saved even though they do not deserve it one bit.

ioan

9th November 2011, 20:44

This is so true. Talk here is that it could affect Australia's economy. I think the only guy to end up not suffering any economic fallout is China.

False. If their markets go down the drain China will go down the same way.

ioan

9th November 2011, 20:46

China has so big domestic market that is in many ways undeveloped they just have to sell the stuff there that did go to export, so the effect will be quite small.

There is a good reason why their domestic market is undeveloped, they are very poor and can't afford to buy the most basic things.

ioan

9th November 2011, 20:50

It is indeed time for a change. But the pain we will all have to suffer to facilitate that change is gonna hurt.

It would hurt a lot, for everyone, EU, UK, US and so on.

ioan

9th November 2011, 20:51

Malbec

9th November 2011, 21:30

There is a good reason why their domestic market is undeveloped, they are very poor and can't afford to buy the most basic things.

You might want to visit China first. There are 1 billion poor people like you describe, the remaining 200 million in the major cities and the coastline have pretty good living standards with all the mod-cons.

Brown, Jon Brow

9th November 2011, 22:47

It would hurt a lot, for everyone, EU, UK, US and so on.

Why have you separated the UK from the EU? :p

ioan

9th November 2011, 22:59

You might want to visit China first. There are 1 billion poor people like you describe, the remaining 200 million in the major cities and the coastline have pretty good living standards with all the mod-cons.

So that makes it 15 percent people able to live a normal life and 85% who have bugger all chances to ever support the market needs of the Chinese industry that are now absorbed by the US, Europe and other countries. Looks very bad to me.

ioan

9th November 2011, 23:00

Why have you separated the UK from the EU? :p

Currency?

Brown, Jon Brow

9th November 2011, 23:00

Currency?

I didn't know the EU was a currency! :p

.....sorry

BDunnell

9th November 2011, 23:01

Currency?

That is a separation between the UK and the Eurozone, not the UK and the EU.

Roamy

10th November 2011, 01:18

T>I>R>E.s just print more money and move on and don't screw up Italy

Rollo

10th November 2011, 04:10

T>I>R>E.s just print more money and move on and don't screw up Italy

The land of the bound and the home of the timid have already been doing this for 222 years. You call it Quantitative Easing :D

Knock-on

10th November 2011, 11:17

So that makes it 15 percent people able to live a normal life and 85% who have bugger all chances to ever support the market needs of the Chinese industry that are now absorbed by the US, Europe and other countries. Looks very bad to me.

'Normal' in China is the 85% you mentioned. The 15% are exceptional.

Basically, what the majority of China and India are is what is 'normal' for this world. We have a very abnormal and privileged existence in Europe; even Greece!

555-04Q2

10th November 2011, 12:15

'Normal' in China is the 85% you mentioned. The 15% are exceptional.

Basically, what the majority of China and India are is what is 'normal' for this world. We have a very abnormal and privileged existence in Europe; even Greece!

Very true statement!

Malbec

10th November 2011, 15:22

So that makes it 15 percent people able to live a normal life and 85% who have bugger all chances to ever support the market needs of the Chinese industry that are now absorbed by the US, Europe and other countries. Looks very bad to me.

How short memories are these days.

So back in 2008 when the credit crunch hit and Chinese exports dipped transiently by up to 40% as Western makers let their stocks dry, China's economy still grew between 8-10% and their car market overtook the USA's to be the biggest in the world... Chinese consumers then helped bridge the gap and they are even wealthier now.

I'm afraid there's more to the world than the US and Europe, the BRI parts of the BRIC economies are also large export markets for the Chinese as is the third world and they're still growing. And if the Chinese government wants to put in a stimulus package they've got trillions of dollars stashed away for a rainy day.

As I said, if the Chinese run into problems its because their economy will overheat, not because of what happens in the West.

driveace

10th November 2011, 17:05

We are all living on credit,I am told that in the UK 85% of all bank accounts are in the red,and that 85% of all cars are leased,or financed,so 15% of the UK public who have a bank account or drive a car actually have money in the bank,and own their car !

Valve Bounce

11th November 2011, 02:48

In my world the strong take care of the weak.

So very true! The Mafia are strong and they have ways of "taking care" of the weak. :eek:

It remains to see who is the strong member of the family and who is weak. No longer is Italy strong, and now talk is that France may not be that strong either.
The whole point of the Eurozone situation is whether it was ever economically viable in the long term.
Things are moving very fast right now : one day the Greek PM indicates he will resign and the market goes up; then Bunga Bunga Berlusconi fails to get support from his own party and the market plummets, with the Hang Seng falling over 1000 points. :eek
Then Greece announces a new guy to be PM and the market steadies today. By tonight, France will probably start to look frail and tomorrow's market will probably plummet.

For those who have the cash and dare to play the markets there is a big chance for picking up good shares on sale. There is money to be made when there's blood on the streets.
And for those who picked the wrong shares to buy, there's always the high balcony exit. :eek:

DexDexter

11th November 2011, 08:21

So very true! The Mafia are strong and they have ways of "taking care" of the weak. :eek:

It remains to see who is the strong member of the family and who is weak. No longer is Italy strong, and now talk is that France may not be that strong either.
The whole point of the Eurozone situation is whether it was ever economically viable in the long term.
Things are moving very fast right now : one day the Greek PM indicates he will resign and the market goes up; then Bunga Bunga Berlusconi fails to get support from his own party and the market plummets, with the Hang Seng falling over 1000 points. :eek
Then Greece announces a new guy to be PM and the market steadies today. By tonight, France will probably start to look frail and tomorrow's market will probably plummet.

For those who have the cash and dare to play the markets there is a big chance for picking up good shares on sale. There is money to be made when there's blood on the streets.
And for those who picked the wrong shares to buy, there's always the high balcony exit. :eek:

Pretty soon it's only us Finns and The Germans and perhaps the Netherlands. Wait a minute, haven't I heard that before?

Continuation War - Wikipedia, the free encyclopedia (http://en.wikipedia.org/wiki/Continuation_War)

SGWilko

11th November 2011, 09:01

Pretty soon it's only us Finns and The Germans and perhaps the Netherlands. Wait a minute, haven't I heard that before?

Continuation War - Wikipedia, the free encyclopedia (http://en.wikipedia.org/wiki/Continuation_War)

Could be three times a charm for Germany - what it two two world wars to attempt (and failed) they might manage to own most of it by financing the Eurozone and taking over on the quiet........ ;)

Malbec

11th November 2011, 10:10

555-04Q2

11th November 2011, 11:12

ioan

12th November 2011, 20:50

ioan

12th November 2011, 20:51

T>I>R>E.s just print more money and move on and don't screw up Italy

They've been doing it to themselves for a long time, without any external help.

ioan

12th November 2011, 20:55

No, not all of us. People who can't afford what they want to buy are living on credit.

Exactly. Never took a credit. Then again I have to pay for other people's iresponsibilities, so maybe I was doing it wrong?!

Sonic

12th November 2011, 21:13

No, not all of us. People who can't afford what they want to buy are living on credit.

And sadly people like us are very much in the minority.

BleAivano

12th November 2011, 21:33

That is a separation between the UK and the Eurozone, not the UK and the EU.

true but UK is not the only EU country that still have their own currency. Both Sweden and Denmark have kept their currencies,
so he should have mentiioned them as well in that case.

BDunnell

12th November 2011, 21:42

true but UK is not the only EU country that still have their own currency. Both Sweden and Denmark have kept their currencies,
so he should have mentiioned them as well in that case.

Of course.

ioan

12th November 2011, 21:54

true but UK is not the only EU country that still have their own currency. Both Sweden and Denmark have kept their currencies,
so he should have mentiioned them as well in that case.

It was a specific question regarding the UK.

Valve Bounce

13th November 2011, 00:31

OK! so the new PM's of Italy and Greece are selected amid mild euphoria. Next comes the implementation of austerity measures which will NOT be accompanied by euphoria but rather with demonstrations. When the demonstrations will turn into riots and looting and burning of cars remains to be seen; something that I hope will not eventuate.

ioan

14th November 2011, 19:27

Valve Bounce

17th November 2011, 00:05

I am becoming increasing concerned about this whole arrangement. This morning's news was about the Greeks becoming very unhappy with the austerity measures and will protest on Friday. What these protests will develop into is anybody's guess. When I was working in Cyprus, the Greek Cypriot resident partner of the firm explained to me that Greeks love a tragedy - and no matter what the situation was (like the Turkish invasion of Cyprus) they simply had to push the envelop until it resulted in a tragedy. How far the Greeks will push this remains to be seen; is being kicked out of Eurozone the tragedy they are aiming for?

Knock-on

17th November 2011, 09:41

I still think like I did back in late Spring that the Euro as a currency is Donald Ducked. I will be surprised if Germany and France allow this to continue into 2012.

Just seen borrowing rates for Government 10 year bonds.

Greece 31.75 Down
Ireland 8.2 Down
Italy 7.1 Down
Spain 6.61 Up
France 3.73 Up
Germany 1.78 Down

The main worry is France. They suddenly seem to be catching the Mediterranean Cold and their financial security is being eroded. Will they continue to want to bail out the Southern States and without France, Germany cannot continue on it's own.

It isn't going to work!!

The early austerity measures implemented by the Tories seem to have generated confidence within the Global market with the UK rate being about the 3% mark. That is something to be thankful for at least but now we need to see more employment growth, especially amongst the young. We need to get the Country working again now.

I see a definite North South European divide which the UK can be more of apart of but there will be a god almighty fallout with the Euro before then.

Drew

17th November 2011, 22:38

When I was working in Cyprus, the Greek Cypriot resident partner of the firm explained to me that Greeks love a tragedy - and no matter what the situation was (like the Turkish invasion of Cyprus) they simply had to push the envelop until it resulted in a tragedy. How far the Greeks will push this remains to be seen; is being kicked out of Eurozone the tragedy they are aiming for?

And the Italians love nothing more than a drama. Even if Monti miraculously manages to put Italy on track, he'll be voted out at the next elections unless he can provide a drama or too.

BDunnell

17th November 2011, 22:46

And the Italians love nothing more than a drama. Even if Monti miraculously manages to put Italy on track, he'll be voted out at the next elections unless he can provide a drama or too.

One does, I think, have to blame the Italian electorate for a significant degree of the country's instability over recent times. Let us never forget, this is a nation in which a substantial proportion of the electorate believed Silvio Berlusconi, someone who would have been laughed off the political scene in many other European countries had he not been imprisoned long ago, to be a suitable leader. This I still find genuinely unbelievable.

Drew

17th November 2011, 22:59

One does, I think, have to blame the Italian electorate for a significant degree of the country's instability over recent times. Let us never forget, this is a nation in which a substantial proportion of the electorate believed Silvio Berlusconi, someone who would have been laughed off the political scene in many other European countries had he not been imprisoned long ago, to be a suitable leader. This I still find genuinely unbelievable.

Well yes, Italians will spend hours and hours complaining about Berlusconi, but I'm sure if he ran for office again, he'd probably get re-elected. Tax evasion is fairly high because the taxes are quite high and yet they want to increase them more. You aren't really going to convince more people to pay higher taxes when the average politician earns €18,000 A MONTH and then they get pretty much anything they need / want for free. We'll see,as a foreigner I can't say I'm expecting much, Italians don't really like change and any change that does happen, happens extremely slowly.

Valve Bounce

18th November 2011, 01:06

Well, the rioting in both Greece and Italy has started. :eek: I just wonder where this will lead to and how it will affect the rest of the World's economy. :confused:

Drew

18th November 2011, 19:04

Well, the rioting in both Greece and Italy has started. :eek: I just wonder where this will lead to and how it will affect the rest of the World's economy. :confused:

What do you mean it's started? They were disturbances in Rome on the 15th October, cars set alight etc. There have been riots in Greece for ages!

Malbec

18th November 2011, 19:31

One does, I think, have to blame the Italian electorate for a significant degree of the country's instability over recent times. Let us never forget, this is a nation in which a substantial proportion of the electorate believed Silvio Berlusconi, someone who would have been laughed off the political scene in many other European countries had he not been imprisoned long ago, to be a suitable leader. This I still find genuinely unbelievable.

It says a lot about the lack of quality politicians that Berlusconi was so popular.

What the Italians need is to have their 'guild' system destroyed where to do any job from driving a taxi to being a politician you need to be a member of the appropriate body, allowing monopolies to spring up everywhere. Thats why Italy is so astonishingly expensive. That might crack the extreme nepotism in Italy too which can only help.

Valve Bounce

19th November 2011, 00:38

What do you mean it's started? They were disturbances in Rome on the 15th October, cars set alight etc. There have been riots in Greece for ages!

Sorry, but if you read my earlier post about the new leaders of Italy and Greece, then perhaps you will see what I am referring to : the demonstrations after the new leaders were very recently selected to resolve the Euro crisis, and what follows.
If you want to talk about rioting in general in Greece, we can go back decades.

Bolton Midnight

19th November 2011, 00:53

Cheap holiday to Greece next year, anyone? :s

Not from what I've heard, if they took ten pounds from 100 customers in the past they know are trying to take £100 from 10 customers.

OK - then what about honest hard working folk, who, saved via a work contribution based pension scheme all their working life, who found out upon retirement that the crooked shyster running the business had pissed the pension pot up the wall on fast cars, even faster women and big boats????????

You mean like Gordon Brown did to the UK to buy votes?

RICHARD LITTLEJOHN: Spare us the sob story, Gordon, we don't care | Mail Online (http://www.dailymail.co.uk/news/article-1053592/RICHARD-LITTLEJOHN-Spare-sob-story-Gordon-dont-care.html)

The man who stole your old age: How Gordon Brown secretly imposed a ruinous tax that has wrecked the retirements of millions | Mail Online (http://www.dailymail.co.uk/news/article-1266662/The-man-stole-old-age-How-Gordon-Brown-secretly-imposed-ruinous-tax-wrecked-retirements-millions.html)

At least bob Maxwell had the decency to top himself when he was caught with his hands in the pension pot, we're still waiting Gordo saviour of the world financial genius !!

The real country at risk in the EU is France. Their banks are exposed up to their necks in Greek, Italian, Spanish and Portuguese paper. They can survive a Greek crash but if Italy goes...........The Dollar & Swiss Franc will look real good and Gold will hit $2,400.00

BBC News - Eurozone debt web: Who owes what to whom? (http://www.bbc.co.uk/news/business-15748696)

Makes you wonder why they don't just wipe off all the debts and see what's left.

Correct. One is living in the past and the other in today.

Just as well we didn't get the Euro, thank heavens Labour didn't manage that particular daft idea like all their other ones.

Valve Bounce

19th November 2011, 01:47

BBC News - Eurozone debt web: Who owes what to whom? (http://www.bbc.co.uk/news/business-15748696)

Makes you wonder why they don't just wipe off all the debts and see what's left.

Just as well we didn't get the Euro, thank heavens Labour didn't manage that particular daft idea like all their other ones.

This is magnificent. Reminds me of the days when I used to play Monopoly with my siblings. I just wonder where China sits on this - they must be the BANK doling out $200 each time one of these countries staggers past GO.
I think wiping off all debts was the stage we used to reach and we started a new game again. :)

Bolton Midnight

19th November 2011, 01:51

Top tip for Monopoly get the Oranges (Vine, Bow & Marlborough from memory), most visited colour on the entire board and give a good return on houses for £100.

To me in my simplistic view if I owe you 400bn and you owe me 450bn then you owe me 50bn, guess it will all be at different interest rates etc but wouldn't take a genius to factor those in.

Drew

19th November 2011, 23:37

Sorry, but if you read my earlier post about the new leaders of Italy and Greece, then perhaps you will see what I am referring to : the demonstrations after the new leaders were very recently selected to resolve the Euro crisis, and what follows.
If you want to talk about rioting in general in Greece, we can go back decades.

You mean you expect the Italians and Greeks to think that just because their new governments (which they didn't vote for) have changed, everything is ok?

Valve Bounce

20th November 2011, 00:22

You mean you expect the Italians and Greeks to think that just because their new governments (which they didn't vote for) have changed, everything is ok?

Au contraire!! I had remarked that both Greece and Italy were about to appoint new leaders who were expected to introduce/implement austerity measures. However, I then anticipated that this could lead to more demonstrations that would lead to riots. I then wondered how this would affect the Eurozone and possibly the world economy.

You obviously had not read my original post on this, and decided to jump in and blaze away; however, please feel free to do so as this will only add to the discussion about the Eurozone situation. You may as ewll add Spain into the equation as they look like joining the party: Economy dominates as Spain prepares to vote - Europe - Al Jazeera English (http://www.aljazeera.com/news/europe/2011/11/20111119164136276145.html).

Going back to your current post which I quote, no! I don't and never did expect everything is/will be OK. Maybe you could go back and inform yourself as to what this discussion is about.

Roamy

20th November 2011, 07:14

So I hear the Krauts are trying to trash the Kidney Pies and shaft the pound - what say you all

Valve Bounce

20th November 2011, 07:40

So I hear the Krauts are trying to trash the Kidney Pies and shaft the pound - what say you all

I sometimes wonder whether Germany will be the only country in Eurozone. Does anyone else have this odd feeling?

driveace

20th November 2011, 09:42

ioan

20th November 2011, 13:03

Malbec

20th November 2011, 14:45

Well Germany does produce many goods for it's home Market and export,most of the country,s in Eurozone,produce very little,as most products now come from Chiina,South Korea,Japan,etc. Britain used to build lots of cars and motorcycles,but all those have gone now,the Japanese producing better built,more advanced,and cheaper replacements.

Britain produced 1.4 million cars last year and exported 80% of them with parts mainly sourced in Britain. Back in the 'heyday' of British manufacturing Britain produced 1.6 million so we're only producing 200k per year less, and thats in the middle of a global recession. More importantly, Britain isn't producing as much low value tat as it used to, most of the cars produced in the UK are high value added ones and inward investment is only increasing.

It would be helpful if this "we're all doomed" attitude was stopped. Britain has problems but it also has a lot of strengths.

BTW both Germany and Japan are offloading production of low value added cars and bikes to other countries. VW's productivity specifically in its German factories is pretty poor. Japan for example is offloading a lot of its European directed car manufacturing to Britain. I wouldn't say thats too bad.

Brown, Jon Brow

20th November 2011, 15:35

Britain produced 1.4 million cars last year and exported 80% of them with parts mainly sourced in Britain. Back in the 'heyday' of British manufacturing Britain produced 1.6 million so we're only producing 200k per year less, and thats in the middle of a global recession. More importantly, Britain isn't producing as much low value tat as it used to, most of the cars produced in the UK are high value added ones and inward investment is only increasing.

It would be helpful if this "we're all doomed" attitude was stopped. Britain has problems but it also has a lot of strengths.

BTW both Germany and Japan are offloading production of low value added cars and bikes to other countries. VW's productivity specifically in its German factories is pretty poor. Japan for example is offloading a lot of its European directed car manufacturing to Britain. I wouldn't say thats too bad.

Although I agree with the point you are making I disagree with the way you have used statistics.

Drew

20th November 2011, 16:00

Au contraire!! I had remarked that both Greece and Italy were about to appoint new leaders who were expected to introduce/implement austerity measures. However, I then anticipated that this could lead to more demonstrations that would lead to riots. I then wondered how this would affect the Eurozone and possibly the world economy.
.

Sorry, but I don't have the time or patience to read page and pages worth of expert economical advice by people who clearly have indepth knowledge of both the parliamentary and economical situations of all countries involved.

Valve Bounce

20th November 2011, 21:27

Sorry, but I don't have the time or patience to read page and pages worth of expert economical advice by people who clearly have indepth knowledge of both the parliamentary and economical situations of all countries involved.

That's quite alright. Just so you understand that jumping in when you are not familiar with discussions will leave you making statements that are kinda confusing.

Bolton Midnight

21st November 2011, 09:13

most of the cars produced in the UK are high value added ones

Toyota, Nissan, Vauxhall ??

vs

some Jags and 3 Aston Martins oh and a Morgan

Valve Bounce

21st November 2011, 21:51

Well, I just checked the overnight markets: it's a sea of red all over Europe and the US.

Roamy

22nd November 2011, 18:03

I see the Germans are after the Brits again. This time rather than bombs they will just smother the pound. You Brits better learn how to drive of the right side of the road. You guys could have a 10 yrs economic boon changing all the roads and signs. But how strange then if the Euro dies you Brits will be spending marks :) That Merkel is evil

Rudy Tamasz

25th November 2011, 11:06

EU is a truckload of nothin'.

ioan

25th November 2011, 16:56

EU is a truckload of nothin'.

What do you know about it?

Roamy

26th November 2011, 08:15

What does anybody know about it?

Well it is pretty easy to figure out. When Israel steps up and kicks the sh!t out of the middle east they will all be coming to the EU through Turkey.

ioan

26th November 2011, 09:36

Well it is pretty easy to figure out. When Israel steps up and kicks the sh!t out of the middle east they will all be coming to the EU through Turkey.

Israel or the US? Just asking!

ioan

26th November 2011, 09:37

What does anybody know about it?

A lot more than a guy from Belarus, or one from the UK! :p

Roamy

26th November 2011, 19:19

Israel or the US? Just asking!

Israel can handle it. BTW I understand the nuclear capacity of Israel is unknown. So maybe they have no nuclear weapons. However I did hear Sharon make a comment once "don't count on the fact that we are NOT 2nd in the world" Would be a hell of a bluff. I think the middle east should wake TFU and Stop potential attacks on Israel. In real close quarter fighting I don't think nukes going off will be very good for the region.

ioan

26th November 2011, 22:27

Israel can handle it. BTW I understand the nuclear capacity of Israel is unknown. So maybe they have no nuclear weapons. However I did hear Sharon make a comment once "don't count on the fact that we are NOT 2nd in the world" Would be a hell of a bluff. I think the middle east should wake TFU and Stop potential attacks on Israel. In real close quarter fighting I don't think nukes going off will be very good for the region.

Are you for real?!
How could Israel use nukes, if they have them, on countries within 100 kms of Israel?!

And don't fool yourself, the Arab countries aren't anymore on Camel back fighting levels like they were back in the 50's. The US support is the only thing that keeps Israel on the map. And now with Obama in office it doesn't look like the US will go to war with Iran to cover Benny's arse.

pino

27th November 2011, 07:42

How about we keep Israel, the US and the Arabs off here? ;)

SGWilko

27th November 2011, 13:26

How about we keep Israel, the US and the Arabs off here? ;)

Easy, that's racist talk!!!! ;)

ioan

27th November 2011, 15:12

Easy, that's racist talk!!!! ;)

Good one! :rotflmao:

anthonyvop

28th November 2011, 03:21

Are you for real?!
How could Israel use nukes, if they have them, on countries within 100 kms of Israel?!

Hiroshima and Nagasaki continued to be Cities

And don't fool yourself, the Arab countries aren't anymore on Camel back fighting levels like they were back in the 50's. The US support is the only thing that keeps Israel on the map. And now with Obama in office it doesn't look like the US will go to war with Iran to cover Benny's arse.

Please. Name me one Arab Country's military that has impressed anyone in the last 50 years?
The Israelis roll over them and the US literally destroyed the 4th largest Military on the planet(Iraq) in a couple of weeks and that was with the US using restrictive rules of engagement.

Rollo

28th November 2011, 04:50

What does any of this have to do with the Euro?

Knock-on

28th November 2011, 09:57

What does any of this have to do with the Euro?

I think some of our friends from across the pond confuse boundaries rather. One even claimed that the Middle East would all come flooding into the EU if Israel give them a kicking :rolleyes: The naivety is rather touching.

Anyway, it's been a little quiet (relatively speaking) on the Euro side over the weekend. Anyone want a guess what the net twist in Euroenders will be?

Rollo

28th November 2011, 10:29

Anyway, it's been a little quiet (relatively speaking) on the Euro side over the weekend. Anyone want a guess what the net twist in Euroenders will be?

Mario and the Technocrats will be playing to an under subscribed house at the San Siro and won't have the money to pay back their bond.
Pedro Manuel Mamede Passos Coelho the Portuguese Piano Player (who I think looks like Guy Smiley when he takes his glasses off) will ask Brazil for some money politely and will be told "no".
And lastly, Angela Merkel will stomp around in her Wellies trying to do Anne Widdecombe impressions but won't look any different than normal.

The truth is that a lot of this debt crisis could probably be averted if banks and sovereign powers were prepared to cross-cancel debts and write-off interest, but somehow that's too hard because it causes a shrinkage in liquidity.

anthonyvop

28th November 2011, 15:25

I think some of our friends from across the pond confuse boundaries rather. One even claimed that the Middle East would all come flooding into the EU if Israel give them a kicking :rolleyes: The naivety is rather touching.

The naivety is from your side as the Muslims are already pouring into Europe.

BDunnell

28th November 2011, 15:35

The naivety is from your side as the Muslims are already pouring into Europe.

What are the origins of your family, Tony?

SGWilko

28th November 2011, 16:17

Hiroshima and Nagasaki continued to be Cities

Yes, they do, and that is because the type of nuclear weapons that Little Boy and Fat Man were, there was not a lingering risk (after the initial massive radiation release) of radiation. Nukes today are designed to wreak much more power that were released on the Japanese Cities, and the after effects of nuclear fallout are massive.

Hiroshima and Nagasaki, hopefully, the only time such weapons that are released in anger.

pino

28th November 2011, 16:26

Guys keep this on topic or I will close it :)

ioan

28th November 2011, 19:24

Guys keep this on topic or I will close it :)

You can't end The future of the Euro and the EU. We need it. ;)

anthonyvop

29th November 2011, 23:05

Businesses plan for possible end of euro (http://www.ft.com/intl/cms/s/0/25ab975a-1a9f-11e1-ae14-00144feabdc0.html#axzz1f8c54HaE)

Rollo

29th November 2011, 23:08

Businesses plan for possible end of euro (http://www.ft.com/intl/cms/s/0/25ab975a-1a9f-11e1-ae14-00144feabdc0.html#axzz1f8c54HaE)

This sits behind Rupert's Pay Wall. Care to enlighten us on what it says?

ioan

29th November 2011, 23:11

This sits behind Rupert's Pay Wall. Care to enlighten us on what it says?

Same here.
Probably it's just the ramblings of another UK journalist who takes something out of context and dreams with eyes wide open.

Mark

30th November 2011, 13:38

I've deleted the off-topic posts. This thread is about the Euro, not ranting about the Middle East or whatever, there's another thread for that.

anthonyvop

4th December 2011, 19:54

Why December 9 Could Be One Of The Biggest Days In The History Of Europe
Simone Foxman | Dec. 2, 2011, 10:05 AM | 14,301 | 23

If you're watching Europe, then the biggest date on your mind is probably December 9.

That's when EU leaders meet for their next big summit in Brussels. Investors and journalists appear convinced that this meeting will be a make-it-or-break-it moment for the euro area, and for three good reasons:

Rising German bond yields
The fragility of France's credit rating
The impending disbursement of the next tranche of Greek aid

If EU leaders are going to embrace radical action now is the time to do it.

The eurozone crisis is clearly infecting the core, with Germany, France, and Belgium feeling the heat of rising bond yields. That was probably some of the biggest news to come out lately; it suggests that the crisis is putting even German credit at risk.

We're continuing to see positive German economic data—like the drop in unemployment to 5.5% in October. But even the slight effect the crisis has had on rising sovereign yields (not to mention common sense) suggests that if euro area economy continues to deteriorate it's really just a matter of time until data beats become misses.

Next, speculation that France's sovereign credit rating is up in the air has turned into a real threat. In the last week, all three of the major ratings agencies have reiterated warnings that the country's AAA is on shaky ground and, again, it's only a matter of time before this fear materializes. If they lose the triple A, then the euro area may no longer be able to bail itself out.

The next $11 billion in troika aid waits for a vote in the Greek Parliament on the country's 2012 budget. Likely, disbursement wouldn't take place until after the summit, so this is essentially EU leaders' last chance to throw Greece to the dogs. If their fiscal compact entails kicking a country or two out of the currency (Greece and Portugal would probably top that list), this is their last chance not to waste taxpayer money on another round of aid for Greece.

Even so, expectations that EU leaders will live up to the kind of endgame that investors are talking about is probably overblown. German Chancellor Angela Merkel spat on those hopes today when she likened the crisis to a marathon, saying that will come after "years of difficulties," not a "single effective blow." Germany has time and again opposed ECB intervention or eurobonds without substantial change—the kind of change that would only come with revisions to its Constitution, and at the end of the day any decision in the EU will require Germany to be on board.

More than anything, markets are looking for a long-term commitment to fixing the crisis and tackling the problems at its core. Instead of a quick fix, we'll probably see a long-term outline of the measures leaders are going to pass and the criteria for an expansion of the ECB's powers in the medium term. Markets will gauge their reaction upon how credible this plan is, and how far it goes towards truly resolving the problems of the EU currency union.

Read more: Will the Endgame For The Euro Crisis Be Decided On December 9? (http://www.businessinsider.com/importance-eurozone-december-9-2011-12#ixzz1fb6pBUkb)

zvjerkan

4th December 2011, 21:37

I think the biggest problem in the European crisis and collapse of some states and it urgently needs to change!
And the reason why I came here, if someone can send me where pp read news about Europe
p.s Here's a picture (http://imagetwist.com/krwg6iyv551f/EU.jpg.html)

ioan

4th December 2011, 22:09

Malbec

5th December 2011, 11:23

US got their rating downgraded earlier this year and, figuratively speaking, no one died. So why would France losing their AAA rating mean a bigger problem?!

How can Germany have credit problems when it has the strongest economy out there? Because this whole thing is an orchestrated charade.

Not sure its orchestrated but the fact that countries like France are having problems indicates it is indeed a charade. Its a self fulfilling vicious cycle with people having doubts about stable well run countries causing bond rates to rise, creating a problem where there was none previously.

It WILL be a problem if France loses its AAA rating as it means that the core Euro states that have a solid rating are not safe either, and the rot (imaginary or otherwise) has spread to the heart.

The Brits haven't been told by our leaders how badly we'll suffer if the Euro goes under, we'll have to bail out our banks all over again if some of them aren't going to collapse. 2008 might well seem like just a dry run.

555-04Q2

5th December 2011, 11:26

Because this whole thing is an orchestrated charade.

:up: 100% correct :up:

anthonyvop

5th December 2011, 18:57

Knock-on

5th December 2011, 20:54

I would hazard a guess by looking at the dates that it's the cost of French Government borrowing.

anthonyvop

5th December 2011, 21:24

I would hazard a guess by looking at the dates that it's the cost of French Government borrowing.

You are correct Sir.....Now care to guess who is going to have to pay for it?

BDunnell

5th December 2011, 21:42

Not sure its orchestrated but the fact that countries like France are having problems indicates it is indeed a charade. Its a self fulfilling vicious cycle with people having doubts about stable well run countries causing bond rates to rise, creating a problem where there was none previously.

Sort of Northern Rock multiplied, in other words.

BDunnell

5th December 2011, 21:43

You are correct Sir.....Now care to guess who is going to have to pay for it?

You, solely, personally? I do hope so.

Malbec

5th December 2011, 21:57

Sort of Northern Rock multiplied, in other words.

No, Northern Rock was running on the edge in the best of times with very little liquidity. As soon as the cost of credit went up NR were guaranteed to go to the rocks as it were. The concerns with that building society were very genuine.

anthonyvop

5th December 2011, 23:15

You, solely, personally? I do hope so.

Ahhhhh.....The old Rule #1 of how to argue like a Liberal

ioan

6th December 2011, 00:18

Just wait and see how much of a Charade it is after you look at this.

http://blogs-images.forbes.com/kenrapoza/files/2011/11/french-bonds-16.jpg

Care to venture a guess what this is a chart of and who what is going to be it's effects?

What if it goes down again after this week?
I wonder how man times can the 3 US based rating agencies menace all EU countries with downgrading before everyone realizes that they are fake? And even if it's true, who will be able to take further credit if no one can afford it anymore?

IMO those who are playing the game right now better play it smart or stop before the whole world goes down due to this stupid market hysteria!

anthonyvop

6th December 2011, 04:09

What if it goes down again after this week?

Do you have any concrete evidence that it will?
Not saying that it won't but as of right now I see no indication that it will.

I wonder how man times can the 3 US based rating agencies menace all EU countries with downgrading before everyone realizes that they are fake?

Why are they fake?
Are they fake because their research arrives at a conclusion that go against what you want?
Are they fake because they are mostly US based and it kills you that it is US companies that have produced a product that dominates the market?

And even if it's true, who will be able to take further credit if no one can afford it anymore?

Ask Greece

IMO those who are playing the game right now better play it smart or stop before the whole world goes down due to this stupid market hysteria!

It ain't no game. It is serious business. No place for "Black Helicopter" economics without any grasp of geopolitical markets.

The idea that with all the thousands of people involved in Government Agencies, Financial Houses and private investors around the world that this is some kind of "Grand, Evil, Capitalist Conspiracy to keep the man down is preposterous.

race aficionado

6th December 2011, 15:30

What if it goes down again after this week?
. . . . . . .

IMO those who are playing the game right now better play it smart or stop before the whole world goes down due to this stupid market hysteria!

It is a gambling casino and I hate the fact that the "god", the "Dow" - going up or down - is the reflection of "how things are" - and if we base the market as a reflection of how things are with this up and down crazy Yo Yo effect - we are indeed in deep crap.

ioan

6th December 2011, 18:59

Do you have any concrete evidence that it will?
Not saying that it won't but as of right now I see no indication that it will.

Italy's interest rates went down also, who would have thought it? Not you.

Why are they fake?

Because the macro economic indicators of France and Germany do not point to what the 3 stooges said.

Are they fake because their research arrives at a conclusion that go against what you want?

See above.

Are they fake because they are mostly US based and it kills you that it is US companies that have produced a product that dominates the market?

Are you talking about weapons and war? Or did I miss something else where the US is dominant?

Ask Greece

Ask what?

It ain't no game. It is serious business. No place for "Black Helicopter" economics without any grasp of geopolitical markets.

Sure, it's not about economics it's about how to make economic slaves.
Funny is how the Euro is just not going down no matter what some people expect, I guess the real economics behind the smoke screens are not so easy to fool.

The idea that with all the thousands of people involved in Government Agencies, Financial Houses and private investors around the world that this is some kind of "Grand, Evil, Capitalist Conspiracy to keep the man down is preposterous.

What about the other billions, who's worthier the thousands you give unlimited credibility or the billions whom are being played with by these few thousands?

ioan

6th December 2011, 20:22

BTW, today Germany reached the 1000 billion Euro exports / year level, and are expected to reach 1075 billions by the end of this year.
The only country that exports more is China, who by the way is approx 14 larger as population.

This must be the reason why the US rating agencies think Germany should lose it's AAA rating, they are not making enough money to pay their debts! :rotflmao:

ioan

6th December 2011, 21:28

It's not their debts, it's other countries debts which they are putting themselves on the hook for which are the problem.

Why would Germany have problem financing their own debts if they have the money to do it?

I can understand that Greece couldn't do it on its own, that Portugal and Ireland are looking very bad too, that Italy and Spain had to take huge cuts to have a chance to survive.

What exactly is the problem with France and especially Germany if they are stable? It's not like Germany or even France are likely to default.

Looks like a political game that the US rating agencies are trying to mask under some strange economical reasons. They started claiming that France is having difficulties, which was shut down shortly after that, so they came back with a generalized Euro rating downgrade. Next they will also start claiming the same for the remaining EU countries who are not using the Euro, which will be even funnier.

The self-fulfilling prophecy doesn't seem to work though.

donKey jote

6th December 2011, 22:49

These aren't the same rating agencies who still gave the likes of Enron, Lehman and co full marks just before they went down, are they?
I bet they don't "charge" companies for favourable ratings or hold vested interests in any of them.
No, they are freedom in action, and sod the consequences. :dozey:

Still, it's not all their fault, it's the people who listen to them...

anthonyvop

6th December 2011, 23:01

Italy's interest rates went down also, who would have thought it? Not you.

A one day drop does not a trend make

Because the macro economic indicators of France and Germany do not point to what the 3 stooges said.

And what indicators are those? The ioan list of stuff I want to happen?

See above.

Do I have to?

Are you talking about weapons and war? Or did I miss something else where the US is dominant?

Come on..Concentrate. Stay on topic.

Ask what?

Greece. That small southeast European Country who's economy is in the crapper because they pay almost 1/2 of their people not to work.

Sure, it's not about economics it's about how to make economic slaves.
Funny is how the Euro is just not going down no matter what some people expect, I guess the real economics behind the smoke screens are not so easy to fool.

Who are economic Slaves? Seriously...What the hell is that suppose to be? Are you a "economic slave?

What about the other billions, who's worthier the thousands you give unlimited credibility or the billions whom are being played with by these few thousands?

What about them? Perhaps if they actually were paying attention to what was going on they wouldn't have been so quick to embrace their Socialist agendas. Until them.....It is totally their fault if they get hurt.

anthonyvop

6th December 2011, 23:13

BTW, today Germany reached the 1000 billion Euro exports / year level, and are expected to reach 1075 billions by the end of this year.
The only country that exports more is China, who by the way is approx 14 larger as population.

The US will export close to 1.4 Trillion in 2011 so how Germany is #2 is pretty incomprehensible.

This must be the reason why the US rating agencies think Germany should lose it's AAA rating, they are not making enough money to pay their debts! :rotflmao:

I will explain it simply enough so you can understand.

Germany uses this for money.

http://www.oilempire.us/oil-jpg/Euro_coins.jpg

So do:

http://1.bp.blogspot.com/_Hi62ct3eurY/S9-lkVF292I/AAAAAAAABMU/BpL6bMLUk38/s1600/1may10-peiraias2.jpg

and others

Because they are

http://vaporizersale.com/wp-content/uploads/2010/10/Free-Stuff.png

Without having to do

http://3.bp.blogspot.com/-C3APPc23ZOw/TsM24rt7TbI/AAAAAAAADvY/Qtaj1BvDusw/s1600/Arb_work_in_progress.jpg

ArrowsFA1

7th December 2011, 08:26

It is a gambling casino and I hate the fact that the "god", the "Dow" - going up or down - is the reflection of "how things are" - and if we base the market as a reflection of how things are with this up and down crazy Yo Yo effect - we are indeed in deep crap.
Whenever I hear politicians utter the phrase "to calm market fears" I do question who is running the world :crazy: The answer is the markets...whoever they are.

Malbec

7th December 2011, 12:19

Why would Germany have problem financing their own debts if they have the money to do it?

I can understand that Greece couldn't do it on its own, that Portugal and Ireland are looking very bad too, that Italy and Spain had to take huge cuts to have a chance to survive.

What exactly is the problem with France and especially Germany if they are stable? It's not like Germany or even France are likely to default.

ioan, while I agree with the broad thrust of what you are saying, you might want to think about who is underwriting the bailouts for Greece etc and who stands to lose out if countries start to default.

The problem is that France and Germany aren't just responsible for paying their own debts, they are providing the collateral as it were for those $100 billion to $ trillion bailouts. They're doing this both directly and by making it more attractive for private banks to lend money by subsidising them.

This is why the Greek and Italian bailouts are eroding confidence in France and Germany. Effectively North Europe is agreeing to be liable for South Europe's debt.

Looks like a political game that the US rating agencies are trying to mask under some strange economical reasons. They started claiming that France is having difficulties, which was shut down shortly after that, so they came back with a generalized Euro rating downgrade.

No, there is no political game. Giving credit ratings is what credit ratings agencies do, they're just doing they're job and their arguments are justified.

Having said that, we should be taking their words with a pinch of salt. After all these are the same companies that failed to spot that subprime home loans were being mixed in with solid ones and gave those packages a AAA rating, the root cause for the entire credit crunch.

I blame Germany for the current loss of confidence in the Euro, their inaction and failure to even say anything that reassures the markets is shocking.

anthonyvop

7th December 2011, 13:39

Whenever I hear politicians utter the phrase "to calm market fears" I do question who is running the world :crazy: The answer is the markets...whoever they are.

Well Duh!

And it does a great job. It is only when a Politician gets involved that things get messed up.

ArrowsFA1

7th December 2011, 14:19

And it does a great job. It is only when a Politician gets involved that things get messed up.
:confused:

So never mind democratic and accountable representation, let's just hand over power to "the markets"?

ioan

7th December 2011, 19:16

You didn't read my post very well did you? Perhaps if you go back and read it s l o w l y, moving your lips while you read, maybe you'll understand. ;)

I did read it, I just don't agree with it, because even though Germans use Euro to buy things in the shop they don't export only in EURO currency, it is really a mix made up of USD, CHF, Yen, RNB, CNY ... and the list is long.
They also do not have only credits in EURO, so they will not need EURO to pay for all of them.

This issues is though mostly true for the US who do use the currency in which most of their debts are.
And the US is no way exporting more goods than Germany in order to balance their finances, yet funnily enough I don't see the US rating agency telling us day in and out how they will again lower it's rating.

If you take a look at the situation of the EURO countries you will see that there are only 2 of them who's debt percentage is higher than that of the US, one of them being Greece whom aren't playing in the big league anyway and whose demise could be easily attenuated.

Anyway I am curious to see how this unfolds and who exactly are those who stand to win from this whole orchestrated mess.

ioan

7th December 2011, 19:25

The problem is that France and Germany aren't just responsible for paying their own debts, they are providing the collateral as it were for those $100 billion to $ trillion bailouts. They're doing this both directly and by making it more attractive for private banks to lend money by subsidising them.

This is why the Greek and Italian bailouts are eroding confidence in France and Germany. Effectively North Europe is agreeing to be liable for South Europe's debt.

That doesn't mean that they can't possibly afford to do what they are doing. In fact they could easily afford it (especially Germany) if it weren't for others trying to drive up their credit rates.

No, there is no political game. Giving credit ratings is what credit ratings agencies do, they're just doing they're job and their arguments are justified.

I don't think that it's as simple as that, there are always someones interests involved in anything that happens out there.

Having said that, we should be taking their words with a pinch of salt. After all these are the same companies that failed to spot that subprime home loans were being mixed in with solid ones and gave those packages a AAA rating, the root cause for the entire credit crunch.

It' enough to read their justification for this weeks comments and you will wonder how is that anyone thinks they are credible.

I blame Germany for the current loss of confidence in the Euro, their inaction and failure to even say anything that reassures the markets is shocking.

I don't, they know that they will survive whatever happens, it's just a question of leveraging their position within the EURO zone, and maybe also over some other third parties.

ioan

7th December 2011, 19:28

Whenever I hear politicians utter the phrase "to calm market fears" I do question who is running the world :crazy: The answer is the markets...whoever they are.

It's funny isn't it?
Instead of regulating them so that crap of this extent doesn't happen, we try to calm down with billions of gifted money that the working men have earned.

The system is rotten to the core and big changes are needed.

Malbec

7th December 2011, 20:22

That doesn't mean that they can't possibly afford to do what they are doing. In fact they could easily afford it (especially Germany) if it weren't for others trying to drive up their credit rates.

Sorry I think you didn't read my post properly.

They are underwriting bailouts that are in the 100s of billions of Euros. If Greece etc default then Germany and France are liable. In effect we're talking about Germany and France doubling/tripling their national debt at a stroke. Do you really expect their credit rating to remain the same?

I don't think that it's as simple as that, there are always someones interests involved in anything that happens out there.

Perhaps. However these are companies that make their money from rating financial products and institutions for their creditworthiness. Although they sometimes slip up if they are deliberately misleading then you might find that they will lose credibility and hence profitability. Why would these companies deliberately sabotage their own value?

I don't, they know that they will survive whatever happens, it's just a question of leveraging their position within the EURO zone, and maybe also over some other third parties.

The markets don't want to touch South European bonds because they don't trust those countries, at least Italy and Greece. Both countries have a history of lying and certainly Greece has previously understated its level of debt and directly sabotaged bailout attempts with that ridiculous attempt at a referendum.

They will only regain confidence in South European bonds when North European countries pledge that they will back them to the hilt. Sarkozy understands this. Merkel doesn't.

The markets wanted a trillion Euro bailout fund. Sarkozy pushed for it, Merkel blocked it. The markets wanted the ECB to be a lender of last resort to backup the bailouts. Sarkozy pushed for it, Merkel blocked it.

Merkel is still talking about the solution being fiscal responsibility. She's right if she wants to talk about preventing another Euro crisis in the future but she seems not to understand that the current problem is that the markets don't have faith in the bailouts and won't until there is concrete money behind it.

Its like a driving instructor watching the pupil cause an accident and instead of taking over control and preventing it keeps talking about how future accidents could be prevented by taking further lessons.

Added to this, the French have been commenting about how Merkel's advisors and aides have been behaving at meetings to resolve the Euro crisis, they've been seen laughing and drinking till the early hours while the French tear their hair out at the lack of action from the Germans.

What the Euro needs is a firm leader, unfortunately that is exactly what Merkel is not.

ioan

7th December 2011, 21:31

I thought I did mention above that Germany alone had already exported goods worth over 1 trillion Euros this year alone.
Why is that they couldn't pony up a few hundreds of millions needed to support PIGS?!
If you add the other countries which DO make a profit in Europe I am fairly sure that the 1 trillion is not a problem, and let's be honest no one say this money has to be put tomorrow in a safe deposit, they only need to say they do it, and it's job done.
So, based on what exactly can't the Euro countries support their debts?

I'm not sure why we are trying to base the discussion on how Merkel's advisers did eat and drink at meetings?
Should they hang themselves? Would they do a better work if their were all desperate, drinking one coffee after the other?
One needs to have a balanced approach to the issue if they are to solve it and tearing their hair out wouldn't help.
And I think I did already mention that Germany wants to get something in return of their support to the Euro, they want to be able to have a say in how others are using the currency that they are upholding, and I can't fault them for this.

Why would Merkel be the leader of the EU? I thought there are already other people who are taking care of that.

Anyway by Friday night we will know more about our future.

anthonyvop

7th December 2011, 23:32

:confused:

So never mind democratic and accountable representation, let's just hand over power to "the markets"?

When it comes to the economy.....The Free market is 1000 times more democratic than any representative government can ever hope to be.

anthonyvop

7th December 2011, 23:33

This will get ioan's panties in a bunch

S&P JUST PUT THE EUROPEAN UNION ON CREDITWATCH NEGATIVE
Simone Foxman | Dec. 7, 2011, 2:47 PM | 2,117 | 18

Standard & Poor's ratings service just put the long-term rating of the European Union on "creditwatch negative."

With the eurozone accounting for 62% of the European Union's budgeted revenues in 2011, it would seem that the greater, 27-state European Union is also vulnerable to the crisis.

S&P is also putting BNP Paribas, Commerzbank, Societe Generale, Credit Agricole, Deutsche Bank, and many other European banks on "creditwatch negative."

Markets appear to be unfazed by the announcement. It is not wholly unexpected after S&P's announcement earlier this week that it had changed the credit outlook of 15 eurozone sovereign nations to negative.

Once again, S&P is late to the game and appears to be locking the barn door after the horse is gone. But the change certainly indicates just how precarious Europe's financial position has become.

Here's the press release on why S&P changed the EU's long-term outlook to negative:

---

On Dec. 5, 2011, Standard & Poor's placed the ratings on 15 of the 17 member states of the European Monetary and Economic Union (EMU or eurozone) governments on CreditWatch with negative implications. As a result, the ratings on 17 European Union (EU) member states are now on CreditWatch with negative implications.
We are therefore also placing the 'AAA' long-term rating on the EU on CreditWatch negative. At the same time, we are affirming the 'A-1+' short-term rating on the EU.
The CreditWatch placement on the eurozone member states was prompted by our concerns about the potential impact on these member states of what we view as deepening political, financial, and monetary problems within the eurozone.
Eurozone members directly contribute approximately 62% of the EU's total 2011 budgeted revenues. Our CreditWatch review will focus on the financial ability of eurozone member states to support the EU's debt service should the institution face a period of financial distress.
We expect to conclude our review as soon as possible after the European summit on Dec. 9, 2011. Depending on the outcome of our review of the ratings on eurozone member governments, we could lower the long-term rating on the EU by one notch, if any.

LONDON (Standard & Poor's) Dec. 7, 2011--Standard & Poor's Ratings Services
today placed its 'AAA' long-term issuer credit rating on the European Union
(EU) on CreditWatch with negative implications. At the same time, we affirmed
the 'A-1+' short-term issuer credit rating on the EU.

The CreditWatch placement is prompted by similar CreditWatch placements, which
we made on 15 eurozone sovereigns on Dec. 5, 2011. The CreditWatch on the EU
is an expression of our concerns about the potential impact on the future debt
service capacity of eurozone sovereigns, and therefore also the EU, in the
context of what we view as deepening political, financial, and monetary
problems within the eurozone. Eurozone members account for 62% of the EU's
total 2011 budgeted revenues. For 2011, budgeted revenues from Germany and
France were 32% of total EU revenues, at 16% and 14%, respectively. In total,
'AAA' rated member states account for just over 49% of the EU's 2011 budgeted
revenues, with only the U.K., Denmark, and Sweden retaining a stable outlook
(together they contribute 13% of the EU's 2011 budgeted revenues). Given the
EU's dependency on such revenues from national budgets, and our recent
CreditWatch placements on the 'AAA' ratings on Germany and France, among
others, we will concurrently review the 'AAA' long-term rating on the EU with
the ratings on the eurozone member states.

CREDITWATCH

We expect to resolve the CreditWatch placements on the eurozone member states
as soon as possible after the European summit on Dec. 8 and 9, 2011. Following
this, we then expect to resolve the CreditWatch on the EU. We typically
resolve CreditWatch actions within 90 days, although we will attempt to
resolve the CreditWatch placements on eurozone sovereigns and therefore the EU
sooner, if possible and appropriate.

We could lower the long-term issuer credit rating on the EU by one notch if we
were to lower the current 'AAA' ratings on one or more member states, with a
special focus on the largest contributors, France and Germany. Conversely, the
ratings could be affirmed at their current levels if we were to affirm the
member states' 'AAA' ratings following the respective sovereign CreditWatch
review.

Read more: S&P JUST PUT THE EUROPEAN UNION ON CREDITWATCH NEGATIVE (http://www.businessinsider.com/now-this-sp-may-cut-aaa-rating-of-entire-european-union-2011-12#ixzz1ftX9Xx6A)

BDunnell

7th December 2011, 23:48

When it comes to the economy.....The Free market is 1000 times more democratic than any representative government can ever hope to be.

Explain. Be aware that 'Because it just is' does not constitute an answer.

Rudy Tamasz

8th December 2011, 06:17

I think he perhaps mis spoke with the term "democratic". The free market is not democratic in that all have equal representation. It is however "natural" as in survival of the fittest. And that's a good thing because, in the long term, all are better off.

in the long term is an appropriate qualifier. In the short term a switch from the regulation and welfare to the market and personal responsibility can sink many people. That's why I see where many posters on this forum are coming from in their reasoning. However, the well-being of people is the last excuse EU politicians can use in their own support. EU is by far the richest part of the world and all the money spent for welfare and regulators' salaries could be used for cheap loans to small and medium businesses and re-training of workforce in accordance with the demands of the market. But that would leave Brussels folks far behind...

Malbec

8th December 2011, 09:45

I thought I did mention above that Germany alone had already exported goods worth over 1 trillion Euros this year alone.

Yes you did, its all you go on about when you try to explain why the credit rating downgrade isn't rational.

What's Germany's structural deficit ioan? Tell me what steps Germany has taken to cut government spending?

What do you think will happen to that trillion Euro export figure if the Euro collapses and all of Europe (not just the Eurozone) goes into recession again? What do you think will happen to German government deficit when they start bailing out not just the PIGS but the German banks that lent to them?

This is all in addition to what the Germans have already spent on bailouts for the PIGS already.

According to you this has no effect on Germany's creditworthiness. Unfortunately the markets think otherwise. You might find that if your future income was in doubt and you increased borrowing you might find your credit rating dropping too.

If you add the other countries which DO make a profit in Europe I am fairly sure that the 1 trillion is not a problem, and let's be honest no one say this money has to be put tomorrow in a safe deposit, they only need to say they do it, and it's job done.

Yes it should be that easy and that would calm the markets. If you'd kept up with the news or this thread you'd have realised that Merkel has opposed this and continues to oppose it.

So, based on what exactly can't the Euro countries support their debts?

Unfortunately noone anywhere is saying that the Euro countries can't support their debts. Not on this thread, not in the markets. What the credit rating agencies are saying is that the likelihood of the core Euro states defaulting has gone from nothing to tiny. You do understand how the rating system works right?

I'm not sure why we are trying to base the discussion on how Merkel's advisers did eat and drink at meetings?
Should they hang themselves? Would they do a better work if their were all desperate, drinking one coffee after the other?

I thought you'd focus in on that line. Didn't you read about Merkel's failure to take action or even define what the problem facing the Euro right now is? Isn't that bit important?

And I think I did already mention that Germany wants to get something in return of their support to the Euro, they want to be able to have a say in how others are using the currency that they are upholding, and I can't fault them for this.

That is natural, but claiming that lack of fiscal responsibility is the only cause for the current crisis indicates a lack of understanding of the problem.

Why would Merkel be the leader of the EU?

You tell me, you're the one going on about how bulletproof the German economy is.

Knock-on

8th December 2011, 12:09

Arguing economics with ioan is akin to trying to clap one-handed. The blind faith he offers, failing almost completely to recognise any facts that are contrary to his opinion, completely skews his posts in a way not seen since he blindly followed Ferrari.

The markets responded positivity to the initiative from France and Germany to basically rewrite the EU Treaty and immediately the cost of borrowing for risky countries like Italy fell. What will happen to those rates when these proposed changes are watered down or don't materialise because France and Germany decided to announce this collaboration without including the other Countries that need to buy into this.

I can't remember how long I've been saying this now but the Eurozone is doomed in it's current guise, no matter what Merkel wants. The Southern European countries need to be cut lose and individual Countries manage their own affairs, succeeding or failing on their merit.

Rudy Tamasz

8th December 2011, 14:11

Good point, Knock-on. The way I see it the economic interests of Germany do not quite go along with its political ambitions. I am very much curious to see how Murky Angie handles the situation.

Knock-on

8th December 2011, 15:27

Good point, Knock-on. The way I see it the economic interests of Germany do not quite go along with its political ambitions. I am very much curious to see how Murky Angie handles the situation.

I think tomorrow may show up some disunity between member states in the Eurozone and chasms between other members of the EU. For a start, there are 27 members and not just 17 but lets look at just the Eurozone countries shall we.

It is no secret that Germany has long desired to have a centralized Europe with the ability to better control the whole region. If you ask me, Merkel is trying to push this through as a fait acompli with these proposals. Centralised budget control of Nation States from Brussles? You think you have civil unrest now? See what will happen when Greece, Spain, Italy, Portugal, Ireland etc suddenly have stringent austerity measured imposed by Germany- Sorry, I mean Brussles ;)

Then we have the non-Eurozone states that are obliged to join the Euro. Can you imagine them doing that? No, me neither.

Lastly, what of the EU Treaty. Merkel and her little Poodle figure they can make unilateral changes to the EU constitution with impunity and just bully it through. Crazy!

Knock-on

8th December 2011, 15:59

Just found this Janet and John guide to the high level position of the different countries. It's pretty accurate although things may change tomorrow because the PIIGS are hungry and want feeding well for selling out to Germany.

BBC News - EU nations and the euro: What they want (http://www.bbc.co.uk/news/world-europe-16036387)

Talk about Legislate in haste, repent at leisure :s

Malbec

8th December 2011, 16:08

It is no secret that Germany has long desired to have a centralized Europe with the ability to better control the whole region. If you ask me, Merkel is trying to push this through as a fait acompli with these proposals. Centralised budget control of Nation States from Brussles? You think you have civil unrest now? See what will happen when Greece, Spain, Italy, Portugal, Ireland etc suddenly have stringent austerity measured imposed by Germany- Sorry, I mean Brussles ;)

Lastly, what of the EU Treaty. Merkel and her little Poodle figure they can make unilateral changes to the EU constitution with impunity and just bully it through. Crazy!

Actually I think its worse than that, I think the Germans genuinely haven't grasped what is the cause behind the loss of confidence by the markets and believe that inaction is the best course of action.

Merkel has shown repeatedly that she doesn't have a big vision of anything unlike her predecessors who ruled in equally pivotal times. Adenauer knew how he wanted Germany to rebuild itself. Kohl had a vision of Europe with France and Germany at its core. Merkel makes massive decisions on the hoof with domestic political concerns at heart.

If Merkel had been in charge in 1939 she'd have run a poll to see whether invading Poland would boost her party's chances in some local election before deciding to go for it.

Harmonising fiscal policy is great but we've done that before when the Euro was launched. Germany and France sniggered at Spain and Portugal, claiming they'd never stick to the terms set out. In the end Spain and Portugal stayed within their spending limits whilst the Germans and French were the ones who flouted it.

As for Cameron, as with every British PM before him he'll try and dictate proceedings whilst insisting that Britain does not involve itself in the Euro, and just like every British PM before him he'll be astonished as the rest of Europe tells him to keep his hands off.

Knock-on

8th December 2011, 16:43

I agree with most of that but Cameron has to get down and dirty on this. There is a agreement in place and if that is going to be modified, we need to be right on top of it or get dragged into this car crash because as sure as eggs is eggs, if it goes to a referendum, the British people will say non, nein and NO!

BDunnell

8th December 2011, 23:27

It is no secret that Germany has long desired to have a centralized Europe with the ability to better control the whole region.

When you say 'Germany' in this context, what exactly do you mean?

I detect no great enthusiasm for what you describe amongst the German people.

BDunnell

8th December 2011, 23:31

Merkel has shown repeatedly that she doesn't have a big vision of anything unlike her predecessors who ruled in equally pivotal times.

Living in Germany, I find the portrayal of Merkel in the UK, not least by commentators who ought to know better, as some form of 'iron lady' as utterly laughable. She is essentially a leader who has shown little other than indecisiveness, much aided by a variously troubled, divided opposition.

Rollo

9th December 2011, 11:43

Cameron Wishes Euro Bloc Well as U.K. Negotiates Isolation - Businessweek (http://www.businessweek.com/news/2011-12-09/cameron-wishes-euro-bloc-well-as-u-k-negotiates-isolation.html)
Prime Minister David Cameron said Britain refused to sacrifice sovereignty to save the euro, remaining outside an agreement by European nations to tighten budget rules.
Cameron broke ranks with French President Nicolas Sarkozy and German Chancellor Angela Merkel after he failed to secure safeguards that would have stopped European Union plans to police financial services in London, Europe’s trading hub. The U.K and possibly Hungary, Sweden and the Czech Republic will remain outside the new rules.

From what I understand of this, Cameron has basically refused to negotiate with Europe over a propsed Financial Transactions Tax on the basis that it would lead to an exit of funds from "The City". Sovereignty certainly is an issue in Europe; especially when it comes to taxation policy because I'm not so sure that moving towards a more uniform taxation code in Europe is even feasible given how all the various countries economies are driven.
These sorts of arguments when on with the European Coal and Steel Community with only just 6 countries; with 27+ and with more than just coal and steel to worry about, it'd be a nightmare.

Knock-on

9th December 2011, 13:37

When you say 'Germany' in this context, what exactly do you mean?

I detect no great enthusiasm for what you describe amongst the German people.

I mean mainly Merkel. I don't see her as an Iron Lady but rather a weak leader with no concept of the bigger picture and a limited vision for resolving the current situation. Her only response is to try and control and micro manage the crisis in the vain belief that she is somehow capable of controlling a fractured and divisive Europe.

Well, if she thinks she can control this, she is delusional in my opinion. Germany cannot bail this out and trying to control different cultures and sovereign states just wont work. I'm glad Cameron had the balls to refuse capitulation on this foolish intuitive of Light Brigade proportions. Into the valley of death Merkel charges her troops.

BDunnell

9th December 2011, 13:46

I'm glad Cameron had the balls to refuse capitulation on this foolish intuitive of Light Brigade proportions.

But he has achieved precisely nothing, though.

SGWilko

9th December 2011, 13:52

It's all smoke and mirrors anyway.. There is no money for a bailout - it is all based on future 'growth', and currently, that is not really sustainable.

Pretty much every country has artificially staved off stagnating growth/increasing unemployment by either boosting benefits or creating public sector jobs. Now, the money has run out. The unions want to hold us to ransom, there are ever more and more job losses. Businesses are going down the pan quick.

So how does Merkosy propose to come up with the cash required to prevent a meltdown equally as bad as that suffered by TEPCO?

Knock-on

9th December 2011, 15:07

But he has achieved precisely nothing, though.

Sometimes achieving nothing is better than the alternative. Non?

Malbec

9th December 2011, 17:49

Well, if she thinks she can control this, she is delusional in my opinion. Germany cannot bail this out and trying to control different cultures and sovereign states just wont work.

She doesn't think she can control anything. She isn't even attempting to. This is the problem. As with other problems she's faced before she wants to see how it pans out and then pick out the best course to tread her way through the remains.

Germany can bail the problem out, or at least it can with France, Holland and the rest of the solid Euro states. Decisive action on Germany and France's part can calm the markets and stave off a lot of problems. The problem is that there is no decisive action. From a British point of view though, if the Germans took the kind of decisive action they need to, they'll be attacked for trying to establish a European superpower under their leadership blah and other tired stereotypes.

As I thought earlier Merkozy's plan relies on better fiscal discipline. This is great for avoiding Euro meltdown mk 2 but helps little in the current crisis. I'm disappointed though that Sarkozy has abandoned his earlier vision of how to tackle the crisis because it was actually what was required.

I'm glad Cameron had the balls to refuse capitulation on this foolish intuitive of Light Brigade proportions. Into the valley of death Merkel charges her troops.

Actually Cameron showed his complete lack of balls by what he did last night.

Instead of proposing measures that he suggested before like making the ECB a lender of last resort he merely tried to protect British interests and refused to see the bigger picture. While I think he was right to not agree with the initial proposal and veto it he had no alternative vision despite showing earlier that he had the right ideas. That was a complete failure of leadership.

The problem is, and its ironic for someone who talks endlessly about the big society, that Cameron and previous British PM's have no idea of Europe as a community. They merely approach it in terms of what it can do for Britain rather than in terms of working for a common goal which is the German ideology. Worse, they try to stick their oar into things when the rest of Europe decide to leave Britain on the sidelines and attempt anything. Britain has a reputation for not being constructive but obstructive which is well deserved.

Roamy

9th December 2011, 17:59

Unfortunately it is all just the big money "Grab" same as over here. You have countries and we have states. Same bullish!t different place. The era of "revolution" is creeping up on the world. One my have all the money but it will be a MFcker to spend it. A pig gets fatter and a hog get slaughtered. !!

BDunnell

9th December 2011, 18:00

She doesn't think she can control anything. She isn't even attempting to. This is the problem. As with other problems she's faced before she wants to see how it pans out and then pick out the best course to tread her way through the remains.

She has never really been in a great crisis before. If you recall, she came to power promising much in the way of cuts to Germany's welfare system, which she had portrayed in opposition as unduly extravagant, and has actually done very little because she hasn't really had to.

From a British point of view though, if the Germans took the kind of decisive action they need to, they'll be attacked for trying to establish a European superpower under their leadership blah and other tired stereotypes.

Quite so.

Actually Cameron showed his complete lack of balls by what he did last night.

Instead of proposing measures that he suggested before like making the ECB a lender of last resort he merely tried to protect British interests and refused to see the bigger picture. While I think he was right to not agree with the initial proposal and veto it he had no alternative vision despite showing earlier that he had the right ideas. That was a complete failure of leadership.

In the broader sense, maybe, but not in terms of leadership of the Conservative Party. This, I think, is what lays behind his actions. Sadly, he is not there to represent his party, but the British people (a majority of whom would probably support what he's done, let's be honest.)

donKey jote

9th December 2011, 19:01

Headline News:

The Europe Union countries isolate themselves from the UK !!!

:dozey:

Malbec

9th December 2011, 19:43

Headline News:

The Europe Union countries isolate themselves from the UK !!!

:dozey:

So true on so many levels!

DexDexter

10th December 2011, 08:45

Headline News:

The Europe Union countries isolate themselves from the UK !!!

:dozey:

The UK has never been in Europe as they oppose everything, always have and always will. Having said that, the new proposed EU agreement is against the Finnish constitution so we won't take part in it either.

donKey jote

10th December 2011, 09:49

DexDexter

10th December 2011, 15:07

when there's a will, there's a way... constitutions have always been ammended when they were found to be lacking or outdated.
From what I've seen, the proposed agreement is so watered down I can't see how it can be against any constitution anyway.

Well overdue for a new start methinks...

The key is they are proposing majority decisions, 85%, so no single country except France, Germany and Italy could veto a payment or something like that. That would mean that the EU could force us to pay money to help these Southern European countries and according to law makers here, it's against the constitution.

donKey jote

10th December 2011, 16:34

DexDexter

11th December 2011, 09:21

They are proposing that each country abides by certain debt limits or face automatic sanctions, and want that written into the constitutions.
Majority decisions at 85% are about as democratic as you can get. Giving every single "little" country the power to veto or opt out or sabotage majority decisions or define their own version of things is precisely what turns the whole thing into a joke.
Time to reboot. France and Germany are in the fast train, who else is on board ?

I understand your reasoning but the bottom line is Greece and other Southern countries broke the rules of the monetary union and we didn't, our economy is fine and triple A-rated. You'd feel a bit angry and touchy about losing your veto when it comes to spending your money to help those who didn't care about the rules.

Anyway whatever happens, countries must stick to the rules of the monetary union even if they have a warm climate and a tradition of doing things half-well.

donKey jote

11th December 2011, 11:03

Greece broke the rules from day one, aided by all sorts of tricky deals from tricky banks, and they joined on false numbers to start with. But this has nothing to do with warm climates or whatever traditions they may have in your eyes. I guess Ireland is southern too?
I am as angry about bailing the greek goverment out as I am at my taxes going to lazy yobs in Germany.
Fact is, it should have been dealt with earlier, and the present fiscal union proposal would have helped stem the problem earlier.
I will concede that Finland -as a Euro country- deserves more of a say in these things than the Trojan UK horse, but I do believe no single country should have the power to hold all others at ransom.

Malbec

11th December 2011, 11:20

I understand your reasoning but the bottom line is Greece and other Southern countries broke the rules of the monetary union and we didn't, our economy is fine and triple A-rated. You'd feel a bit angry and touchy about losing your veto when it comes to spending your money to help those who didn't care about the rules.

Greece broke every rule in the book, sure.

Portugal and Spain though stuck to the rules of the monetary union quite closely, more than France and Germany did so stereotyping those who live in warm climes does nothing to help understand or alleviate the situation.

BTW I hope Bulgaria and Romania have their entry into the Eurozone delayed or cancelled, they make Greece look like Switzerland. Will the entry criteria be changed?

Roamy

12th December 2011, 06:36

Hey I now think the EU will be fine. They will go back to being their own countries with their own currencies. Then they will deport all the Muslims over here. We will have years and years of social unrest. The Muslims will blow the sh!t out of the Catholics and they will return to "Latin Europe". Then as soon as the Muslims take over here, they will cut all aid to Israel and therefore Israel will disappear from the Earth. I will be in Argentina screwing myself to death and will die with a big smile on my face. Now if only F1 would return to Argentina. I would go to Colombia but I am short on ransom money.

race aficionado

12th December 2011, 12:40

Tis the season for fousto to be jolly. :)

Sent from my iPhone using Tapatalk

ArrowsFA1

12th December 2011, 12:49

when there's a will, there's a way... constitutions have always been ammended when they were found to be lacking or outdated...
Politically inconvenient for whoever is in power at the time, in other words :p

ioan

12th December 2011, 20:00

I think tomorrow may show up some disunity between member states in the Eurozone and chasms between other members of the EU. For a start, there are 27 members and not just 17 but lets look at just the Eurozone countries shall we.

Yep it showed, Judas has a new name now, it's UK.

ioan

12th December 2011, 20:02

But he has achieved precisely nothing, though.

That's good enough for Knockie.

ioan

12th December 2011, 20:05

The problem is, and its ironic for someone who talks endlessly about the big society, that Cameron and previous British PM's have no idea of Europe as a community. They merely approach it in terms of what it can do for Britain rather than in terms of working for a common goal which is the German ideology. Worse, they try to stick their oar into things when the rest of Europe decide to leave Britain on the sidelines and attempt anything. Britain has a reputation for not being constructive but obstructive which is well deserved.

Well said.
Everyone was expecting Germany to be the ones saying no, it turned out it's Germany's critics who failed the rest.

ioan

12th December 2011, 20:07

ioan

12th December 2011, 20:09

I understand your reasoning but the bottom line is Greece and other Southern countries broke the rules of the monetary union and we didn't, our economy is fine and triple A-rated. You'd feel a bit angry and touchy about losing your veto when it comes to spending your money to help those who didn't care about the rules.

Anyway whatever happens, countries must stick to the rules of the monetary union even if they have a warm climate and a tradition of doing things half-well.

That's a rather one-sided and very shortsighted view, not to talk about discriminative.

ioan

12th December 2011, 20:13

Greece broke every rule in the book, sure.

Portugal and Spain though stuck to the rules of the monetary union quite closely, more than France and Germany did so stereotyping those who live in warm climes does nothing to help understand or alleviate the situation.

BTW I hope Bulgaria and Romania have their entry into the Eurozone delayed or cancelled, they make Greece look like Switzerland. Will the entry criteria be changed?

You condemn someone for stereotyping and then do worse?!
You can not cancel the entry into the EUROzone for anyone who meets the criteria, which are fine as long as they are enforced.
If you're not in the UK I suggest you move there, you'll feel at home there.

ioan

12th December 2011, 20:42

Well Cameron has given us the 'bad guy' label now, great. I hope fellow Europeans will be sensible enough not to stereotype us as a nation as a result however.

With Knockie and Wilko doing their best to support Cameron's views, not sure what your chances are.

Malbec

12th December 2011, 21:40

You can not cancel the entry into the EUROzone for anyone who meets the criteria, which are fine as long as they are enforced.

That is a pity indeed.

You're having kittens about how unfair it is that Germany is threatened by a credit rating downgrade from AAA to AA+ by S and P. Do you know what Romania's credit rating is?

It was a mistake to let Greece in and it will be a mistake to let in other weak poorly run states that may endanger the Euro in the future. Romania and Bulgaria are as corrupt as Greece and I do not trust that their book aren't cooked to enter the Euro just as the Greeks did.

Rollo

12th December 2011, 21:57

Malbec

12th December 2011, 22:54

As with all of these things, follow the money.

In his address to the Commons (in which Clegg was noticeably absent), Cameron said that the reasons for Britain staying out of the agreement was to protect the City of London which accounts for 10% of tax revenues. I'm going to have to check Hansard when it's published to see the exact words but it's still telling.

What Europeans think of British people is largely irrelevant, it's what trading partners do. Sarkozy probably said it best:

"Clearly there are now two Europes. One wants more solidarity between its members and more regulation; the other is attached only to the logic of the single market."
"We need Great Britain. We'd be greatly impoverished if we allowed its departure which, luckily, is not on the agenda"
- Nicolas Sarkozy, to Le Monde - 12-12-11

Europe still needs the investment capital that passes through the Square Mile; really all that Cameron is trying to do is ensure that taxation revenues which come from it flow to Westminster and not Frankfurt.

I think the financial sector contributes more than 10% of the country's revenues. I've heard the figure 25% being mentioned although that may include the indirect effects such as increased stamp duty revenue thanks to the inflated property prices caused by financial sector pay. Just as if not more importantly though, London and the South East is entirely dependent on the financial sector and contributes to 40% of the British economy, subsidising other parts of the UK. If the City stumbles, London falls and it will take the rest of Britain with it.

I do think Cameron was right to not agree to the initial offer, his failure was not to offer an alternative or even amendments to the proposal. I think a French diplomat said it best when he said "Cameron forgot to bring his wife to the wife swapping party we were holding". Cameron utterly misjudged the rest of the EU's determination to finish the talks with an agreement and got left behind.

Rollo

12th December 2011, 23:09

Just as if not more importantly though, London and the South East is entirely dependent on the financial sector and contributes to 40% of the British economy, subsidising other parts of the UK. If the City stumbles, London falls and it will take the rest of Britain with it.

Is that caused by a feedback loop as a result of Tory policies during the 1980s though which Labour didn't bother to change during the 90s and 00s? Has "The City" sucked the capital from the rest of the country?
The City is generally opposed to so called "Robin Hood" taxes anyway but considering that the GFC itself was largely caused by the City and was propped up by the Government anyway, I rather think that this counts as rank hypocrisy.

555-04Q2

13th December 2011, 09:31

Why Britian should care what a failed EU says about it I don't know :crazy:

SGWilko

13th December 2011, 10:58

Other than the powerful 'City' engine driving GB Plc, what is left?

Nothing.

It was all either sold off, privatised or run into the ground by moronically flawed management.

SGWilko

13th December 2011, 11:00

With Knockie and Wilko doing their best to support Cameron's views, not sure what your chances are.

I'll support my own views thanks very much. Whether you agree with them or not is your lookout Sonny Jim.

Malbec

13th December 2011, 11:29

Is that caused by a feedback loop as a result of Tory policies during the 1980s though which Labour didn't bother to change during the 90s and 00s?

Labour reinforced Tory policies regarding the City. The rise of the City took place for a variety of different reasons including government reform and Britain's proximity to the Eurozone without being part of it. That was accompanied by a decline in traditional economic sectors elsewhere in the country.

Has "The City" sucked the capital from the rest of the country?

Debatable, British industry self-destructed without the need for anyone else to damage it. You could argue that the City has provided a lot of cheap credit/capital which has helped the British economy develop over the past few years. Tax revenue from the City has mostly been spent elsewhere in the UK to keep economic activity going away from London.

Knock-on

13th December 2011, 12:31

As Malbec says, this is really just an opening gambit. Sometimes it's better to draw a line in the sand straight off rather than fanny about. Then we can start really negotiating. Anyone watching formula 1 for the last 30 years must recognise this ;)

What really worries me is the civil unrest that this pact will unleash. They are still trying to force a huge round peg into a rapidly shrinking square hole.

Pat is spot on as per normal.

The gathering storm - YouTube (http://www.youtube.com/watch?v=vGQIxYfKKtc)

ioan

13th December 2011, 19:17

That is a pity indeed.

You might want to to explain that.

You're having kittens about how unfair it is that Germany is threatened by a credit rating downgrade from AAA to AA+ by S and P.

And rightly so.

Do you know what Romania's credit rating is?

Depends on the rating agency, but it's more or less BBB, BBB- or BB+ and stable, a tad better than Portugal's rating.
Which is about fair, especially if you consider how low Romania's debt is.

It was a mistake to let Greece in and it will be a mistake to let in other weak poorly run states that may endanger the Euro in the future. Romania and Bulgaria are as corrupt as Greece and I do not trust that their book aren't cooked to enter the Euro just as the Greeks did.

The mistake was not to let them in, the mistake was not to strictly control what they were doing. The funniest part was about having criteria to accept someone in the EURO zone but no criteria or rules to punish them or throw them out in case they cheat.

Anyway you're mixing the cause and the symptoms.

ioan

13th December 2011, 19:21

I'll support my own views thanks very much. Whether you agree with them or not is your lookout Sonny Jim.

Will talk again in a couple of years. The question is if you will pay in Euro or USD at that time.

ioan

13th December 2011, 19:31

You could argue that the City has provided a lot of cheap credit/capital which has helped the British economy develop over the past few years. Tax revenue from the City has mostly been spent elsewhere in the UK to keep economic activity going away from London.

So Cameron did what he did in order to protect UK's financial motor.
The question is what if the City will fall if the Euro can't be saved due to UK's lack of unity?
Called me old fashioned but I'm rather sure that the City with it's perceived financial glow is creating more debts than added value for the economy.
Anyway, we will see what happens in due time.

Brown, Jon Brow

13th December 2011, 22:56

Labour reinforced Tory policies regarding the City. The rise of the City took place for a variety of different reasons including government reform and Britain's proximity to the Eurozone without being part of it. That was accompanied by a decline in traditional economic sectors elsewhere in the country.

Debatable, British industry self-destructed without the need for anyone else to damage it. You could argue that the City has provided a lot of cheap credit/capital which has helped the British economy develop over the past few years. Tax revenue from the City has mostly been spent elsewhere in the UK to keep economic activity going away from London.

Does this take into account that bailing out the financial sector could have cost us £1.2trillion (Reality check: how much did the banking crisis cost taxpayers? | Politics | guardian.co.uk (http://www.guardian.co.uk/politics/reality-check-with-polly-curtis/2011/sep/12/reality-check-banking-bailout)), while tax revenues from the finacial sector only amount to £53billion or 11% of GDP (http://217.154.230.218/NR/rdonlyres/68F49A7E-8255-415B-99A8-1A8273D568D9/0/TotalTax3_FinalForWeb.pdf).

I am sceptical of these figures, but if they are true then the city might be costing us money :(