Is the end nigh for the Euro? [vol. 3]
Discussion
Andy Zarse said:
My view is that the Germans have already realised they've lost all of their money on Greece and don't want to waste any more. Pragmatic if nothing else...
I think that's very nearly right.The only place we differ is that I still think Greece may see the light and decide to stay "in". Would I bet the farm on it? No!
Claudia Skies said:
Andy Zarse said:
My view is that the Germans have already realised they've lost all of their money on Greece and don't want to waste any more. Pragmatic if nothing else...
I think that's very nearly right.The only place we differ is that I still think Greece may see the light and decide to stay "in". Would I bet the farm on it? No!
Then with the stark reality of sitting on his new throne with some 70% of Greeks wanting to hold onto euros and confronted with an ECB threat of ending liquidity in the whole Greek banking system a "smoke and mirror" EU can kicking deal with be done with Syrizas that pacifies the equilibrium.
Yep..... the game of Euro Jenga will be kept going for another few years....
Alexis Tsipras the final casualty at the end of his term....... maybe one way or the other anyway......
Germany is going to throw Greece to the wolves next week. To see why this is unavoidable you need to look at the construction of the ECB and how the EZ Central Banks operate and are funded under the ECB umbrella. It will make QE almost impossible for Greece. Actually make that totally impossible. As said previously, rock and a hard place.
I expect the Greek Central Bank has spent the weekend choosing various shiny new designs and logos for their new bank notes. Better make sure there's room to overprint more noughts...
I expect the Greek Central Bank has spent the weekend choosing various shiny new designs and logos for their new bank notes. Better make sure there's room to overprint more noughts...
Andy Zarse said:
Germany is going to throw Greece to the wolves next week. To see why this is unavoidable you need to look at the construction of the ECB and how the EZ Central Banks operate and are funded under the ECB umbrella. It will make QE almost impossible for Greece. Actually make that totally impossible. As said previously, rock and a hard place.
It will be interesting to see...RYH64E said:
Gargamel said:
Syriza are likely to find out quite quickly that the EU don't really want to negotiate with them, it will be bully boy tactics all the way.
What would you suggest the EU do? Maybe give them a load more money on the never never and let them build some more roads they don't need? Or agree to continue subsidising their unsustainable life style on the back of west european taxes?Telling them to face up to some hard facts isn't bully boy tactics imo, it's something governments should do on a regular basis (and probably would if they didn't have to worry about getting re-elected).
Alex has made a dreadful miscalculation, wanting to tear up the loan book, AND keep the Euro means the Syriza revolution will fail before it really gets a chance to shake things up.
The EU cannot (financially or politically) accept a further Greek default on loans, without some sanction. I guess what I meant was, the EU having deposed three elected Heads of State are quite capable of bringing down the leader of Greece and putting in another Troika placeman.
However I agree with Andy, Think Ze Germans have had enough.
Andy Zarse said:
RYH64E said:
What would you suggest the EU do? Maybe give them a load more money on the never never and let them build some more roads they don't need?
My view is that the Germans have already realised they've lost all of their money on Greece and don't want to waste any more. Pragmatic if nothing else...All they need is lots of cheap labour. If only there was a place in Europe where that was available.
Poor old Mario, after a weekend of leaks and hints about his QE package, now he must be going absolutely mentalissimo at this guileless dipstick:
http://www.telegraph.co.uk/finance/economics/11354...
http://www.telegraph.co.uk/finance/economics/11354...
Andy Zarse said:
Poor old Mario, after a weekend of leaks and hints about his QE package, now he must be going absolutely mentalissimo at this guileless dipstick:
http://www.telegraph.co.uk/finance/economics/11354...
Mentalissimo - good work. http://www.telegraph.co.uk/finance/economics/11354...
No doubt the Greeks have got SuperMario on speed dial trying to find out if they are included or on the naughty step until the elections are over.
So Hollande is having his own Gordon Brown (gold) moment. Smashing.
As for Greece, those who say the problems are as much internal as external are quite correct. Even without the enforced austerity of the Troika, even before there was even any proper scrutiny of the nation's finances, the political inefficiency and corruption and the private tax evasion and participation in government-for-hire was rife.
Even if there were a majority will to reform - which is not at all clear - it would take decades to realign the collective mindset. It is illustrative of the lack of clear due diligence for entry to the EU and Euro.
As for Greece, those who say the problems are as much internal as external are quite correct. Even without the enforced austerity of the Troika, even before there was even any proper scrutiny of the nation's finances, the political inefficiency and corruption and the private tax evasion and participation in government-for-hire was rife.
Even if there were a majority will to reform - which is not at all clear - it would take decades to realign the collective mindset. It is illustrative of the lack of clear due diligence for entry to the EU and Euro.
maffski said:
Germany has a problem with it's ageing infrastructure falling apart. If the German public has had enough of reading about their money propping up Greece perhaps they would like to see it being used to prop up crumbling bridges?
All they need is lots of cheap labour. If only there was a place in Europe where that was available.
You mean they should build all their bridges in Greece and the other weaker States?All they need is lots of cheap labour. If only there was a place in Europe where that was available.
I thought they had already tried that in Spain.
Digga said:
So Hollande is having his own Gordon Brown (gold) moment. Smashing.
As for Greece, those who say the problems are as much internal as external are quite correct. Even without the enforced austerity of the Troika, even before there was even any proper scrutiny of the nation's finances, the political inefficiency and corruption and the private tax evasion and participation in government-for-hire was rife.
Even if there were a majority will to reform - which is not at all clear - it would take decades to realign the collective mindset. It is illustrative of the lack of clear due diligence for entry to the EU and Euro.
Couldn't have put it better myself, spot on I'd say.As for Greece, those who say the problems are as much internal as external are quite correct. Even without the enforced austerity of the Troika, even before there was even any proper scrutiny of the nation's finances, the political inefficiency and corruption and the private tax evasion and participation in government-for-hire was rife.
Even if there were a majority will to reform - which is not at all clear - it would take decades to realign the collective mindset. It is illustrative of the lack of clear due diligence for entry to the EU and Euro.
Gargamel said:
RYH64E said:
Gargamel said:
Syriza are likely to find out quite quickly that the EU don't really want to negotiate with them, it will be bully boy tactics all the way.
What would you suggest the EU do? Maybe give them a load more money on the never never and let them build some more roads they don't need? Or agree to continue subsidising their unsustainable life style on the back of west european taxes?Telling them to face up to some hard facts isn't bully boy tactics imo, it's something governments should do on a regular basis (and probably would if they didn't have to worry about getting re-elected).
Alex has made a dreadful miscalculation, wanting to tear up the loan book, AND keep the Euro means the Syriza revolution will fail before it really gets a chance to shake things up.
The EU cannot (financially or politically) accept a further Greek default on loans, without some sanction. I guess what I meant was, the EU having deposed three elected Heads of State are quite capable of bringing down the leader of Greece and putting in another Troika placeman.
However I agree with Andy, Think Ze Germans have had enough.
I therefore entirely agree with Gargamel that the failing states within the EU are about to be rumbled and it is the likes of Germany who are going to say enough is enough. However given the years and years of continued excessive borrowing and spending by these failing states that have continued under this "EU Solution" the immediate consequences are going to be dire in the extreme to the states concerned and the consequences to a number of financial institutions and a number of other states seriously affected will also be massive. I am concerned that the consequences will spill out all over the EU. I do not think this nonsense can be continued much longer and I do think that a damned big problem has arisen which the EU have failed to preent.
I realise that many think that the EU will just keep pushing this forward, as they have done, for years, never actually solving any of the fundamentals or even attempting to address any of the really critical matters. I think that the largesse that allowed that kind of comfortable crookery has slipped lfrom the EU leaders on this. The rise of the Swiss currency and fall of the Euro reflects that change of attitude. I have never wanted a monumental crash but nor have I believed that lending more and more to wholly insolvent states utterly incapable of repaying that money can be a realistic policy. I do think this is already getting nasty and going to get nastier.
Personally I am now in Italy till next May and the Euro is visibly weaking currently and my sterling is buying a lot more for each pound spent. The Italians are muddling along as they do ( I love them all, they enjoy life) and circumventing as much as possible of every form taxation within Italy with considerable success. But this cannot be the basis for stable government and the consequences are obvious. Changes are coming, welcome or not.
Brite spark said:
QE not the answer says mervyn king
http://www.telegraph.co.uk/finance/economics/11356...
He's changed his tune a bit quick hasn't he. Is he saying QE was only effective for 5 years? From the ECB perspective I would question the point of such sovereign asset purchases when a 10yr Bund is already at 0.4%.http://www.telegraph.co.uk/finance/economics/11356...
Anyway, it's nice to see Merv finally agrees with me
An excellent article from Andrew Lillico. I would agree Syriza are hopeless socialist dreamers and they are going to last about five minutes in the real world.
http://www.telegraph.co.uk/finance/economics/11356...
http://www.telegraph.co.uk/finance/economics/11356...
Andy Zarse said:
An excellent article from Andrew Lillico. I would agree Syriza are hopeless socialist dreamers and they are going to last about five minutes in the real world.
http://www.telegraph.co.uk/finance/economics/11356...
Interesting, I mention that the EU would take a tough stance, and indeed withdrawing emergency bank suppport would seem to qualify under that heading. http://www.telegraph.co.uk/finance/economics/11356...
The last bit is the most telling
"whether Greeks conclude that if the Syriza debt forgiveness and austerity loosening route fails that means they should knuckle under back to full-blown austerity or whether they react by voting for parties favouring euro withdrawal — seems very hard to call."
That must be the concern, if the EU fail to do business with Syriza, can Syriza use their popularity and democratic base to call for more radical measures ? Or actually are the EU planning to chuck Greece out anyway ?
Gargamel said:
Andy Zarse said:
An excellent article from Andrew Lillico. I would agree Syriza are hopeless socialist dreamers and they are going to last about five minutes in the real world.
http://www.telegraph.co.uk/finance/economics/11356...
Interesting, I mention that the EU would take a tough stance, and indeed withdrawing emergency bank suppport would seem to qualify under that heading. http://www.telegraph.co.uk/finance/economics/11356...
The last bit is the most telling
"whether Greeks conclude that if the Syriza debt forgiveness and austerity loosening route fails that means they should knuckle under back to full-blown austerity or whether they react by voting for parties favouring euro withdrawal — seems very hard to call."
That must be the concern, if the EU fail to do business with Syriza, can Syriza use their popularity and democratic base to call for more radical measures ? Or actually are the EU planning to chuck Greece out anyway ?
The BBC is clearly forecasting major changes See: http://www.bbc.co.uk/news/world-europe-30864088
Changes are coming to the EU and politics therein. Matter of conjecture how the EU leaders will fail to deal with this collectively. They will fail just as their other efforts have failed. I am very doubtful that the " Whatever it takes" nonsense carries the weight it did once. Reality time I think.
Steffan said:
Changes are coming to the EU and politics therein. Matter of conjecture how the EU leaders will fail to deal with this collectively. They will fail just as their other efforts have failed. I am very doubtful that the " Whatever it takes" nonsense carries the weight it did once. Reality time I think.
Good point. "Whatever it takes" does not seem to extend as far as the ECB directly buying bonds of southern countries. I guess we will have to wait until Thursday, but the widely predicted idea of channelling of QE through national central banks is a complete cop out. The Germans have strongly objected to the ECB (AKA The Bundesbank) buying Portugese and Italian bonds. And quite frankly, who can blame them?And as to trusting the word of central bank govenors, one only has to look at Switzerland and the pronouncements of Gov. Thomas Jordan who two weeks ago was saying the peg was "a cornerstone policy". Ten days later; BOOM! To a lesser extent, Mark Carney has made himself look more like Fred Carno, with his "forward guidance" turning out to be worth little more than hot air.
So what price Denmark's currency peg to the Euro? Apparently, this time it's all different...
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