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http://www.bbc.co.uk/news/world-europe-15449149
Major backlash against the UK govt over Europe.
Greece, Spain and Italy in severe economic straits.
Euro on the verge of collapse (I said back in the Summer that it could fail by Christmas) and even if the divisive Euro leaders manage to come to a consensus then it looks like delaying the inevitable.
Is nobody else concerned by this?
I don't believe the Euro will be allowed to collapse completely. Such a thing is impossible to seriously envisage. As to whether some of the weaker countries will leave it and revert to their own national currencies, I'm not so certain.
Bring back the peseta!
Agree. Too many influential people invested in the bubble to let it burst so easily.Quote:
Originally Posted by BDunnell
I also believe that the complete collapse of the Euro would be unpopular with many mainland European citizens on the grounds of the sheer convenience it offers.
That is true, too. Those commoners are really fortunate as their interests coincide with those of their wealthier and more influential peers.Quote:
Originally Posted by BDunnell
I read in a national paper something like,today is the 10th anniversary of the Euro,BUT I guarantee there will not be a 20th anniversary party,could this be true?
Stick a fork in it -- It's done !!! bad idea in the first place - destroying all those wonderful countries. I can't wait until it reverts back
To how many of 'those wonderful countries' have you been since the Euro was brought in?Quote:
Originally Posted by Roamy
Let those in favour of it bail out the PIGS - so that'll be Germany and France.
Bring back the Lira!!!
All adopt the pound, simples
If Greece were to go back to the drachma their problems would be over in 24hrs
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.
If anyone from the ECB is reading this, all your problems are over.Quote:
Originally Posted by Bolton Midnight
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.Quote:
Originally Posted by Rollo
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.
Concerned? Yes. Understanding the full implications of it? NoQuote:
Originally Posted by Knock-on
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.
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.Quote:
Originally Posted by Gregor-y
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.Quote:
Originally Posted by Rudy Tamasz
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.Quote:
Originally Posted by BDunnell
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).
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.
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!
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.Quote:
Originally Posted by Alexamateo
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.Quote:
Originally Posted by BDunnell
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?Quote:
Originally Posted by Rudy Tamasz
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.Quote:
Originally Posted by Mark
They have to change back to the Drachma or a totally new currency they couldn't carry on with the same notes.
Not very many because the value this very bad against the dollar. Italy was not toooo bad in some places.Quote:
Originally Posted by BDunnell
Murder any English students, as that seems to be what Americans do when in Italy.Quote:
Originally Posted by Roamy
Quote:
Originally Posted by Bolton Midnight
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'.
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).
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.Quote:
Originally Posted by BDunnell
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.
I suspect you've never met a banker or understand how they think.Quote:
Originally Posted by Rudy Tamasz
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.
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.Quote:
Originally Posted by Rudy Tamasz
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.
Let alone anyone outside that industry.Quote:
Originally Posted by Malbec
No, and the opinions they do hold about people outside the industry are often ignorant and downright offensive.Quote:
Originally Posted by BDunnell
Papandreou now wants to put the whole deal to a referendum in Greece. Greek cabinet backs referendum - Europe - Al Jazeera English
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.
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.
If they stopped dictating to us from Brussels, maybe we would STFU! ;)Quote:
Originally Posted by ArrowsFA1
10, 9, 8, 7............. ;)Quote:
Originally Posted by Knock-on
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.Quote:
Originally Posted by Knock-on
To me the Greeks are mad. Let them say no in the vote, I mean if they want to destroy themselves, go ahead.
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.