Is the end nigh for the Euro? PIGS going bust? This Autumn?
Discussion
I began a thread in February highlighting the problem of the PIGS (Portugal.Ireland, Greece, Spain) and the possible solutions.
The response was interesting and informative. In general the tenor of the replies was that there was little alternative to a bailout and the PIGS would recover in time and all would be well.
This new topic is really intended to address the situation we face now and in the future. It is clear to me that Greece will require complete and major refunding immediately and that this will have a huge effect on the European economic future and strengths.
In my view this is an unsustainable crisis which can only end in these countries either accepting fundamental economic reforms individually which will seriously reduce their living standards which I doubt very much they will, or default on the loans which thety may prefer.
Realistically the pressure on Merkel and Sarkozy two of the architects of this situation, and still in power and seeking re-election is immense. Their reputations(?) are based on a united strong growing Europe.
See
http://www.bbc.co.uk/news/business-13809433
Again in reality I do not think these countries actually ever had, nor will they ever have the economic power base to live at the levels they have been doing. Can you see the Greeks buckling down and sorting this? I cannot.
My concern is that as with Emperors clothes the European Union will severely decimate its reserves trying to bail first Greece and then Spain out of trouble.
But they will not succeed. And with the fall of Ireland and Portugal who will undoubtedly have to once again renegotiate their finances in the fullness of time this is becoming obviously unsustainable.
Can this be resolved? I am not sure it can.
Will the Euro survive? Only if it lets these countries secede from the EU.
How long will this take. I think this Autumn will see the real problems beginning to surface. Whatever the EU can cobble together once the other countries realise the Exposure of the EU central bank to huge losses which may NEVER be repaid I think major restructuring of the EU is inevitable.
France and Germany are strong enough to keep the Euro going but they cannot and I think will not continue to bail out these countries.
This could be the start or a great deal of economic and structural change in Europe.
What do others thyink?
The response was interesting and informative. In general the tenor of the replies was that there was little alternative to a bailout and the PIGS would recover in time and all would be well.
This new topic is really intended to address the situation we face now and in the future. It is clear to me that Greece will require complete and major refunding immediately and that this will have a huge effect on the European economic future and strengths.
In my view this is an unsustainable crisis which can only end in these countries either accepting fundamental economic reforms individually which will seriously reduce their living standards which I doubt very much they will, or default on the loans which thety may prefer.
Realistically the pressure on Merkel and Sarkozy two of the architects of this situation, and still in power and seeking re-election is immense. Their reputations(?) are based on a united strong growing Europe.
See
http://www.bbc.co.uk/news/business-13809433
Again in reality I do not think these countries actually ever had, nor will they ever have the economic power base to live at the levels they have been doing. Can you see the Greeks buckling down and sorting this? I cannot.
My concern is that as with Emperors clothes the European Union will severely decimate its reserves trying to bail first Greece and then Spain out of trouble.
But they will not succeed. And with the fall of Ireland and Portugal who will undoubtedly have to once again renegotiate their finances in the fullness of time this is becoming obviously unsustainable.
Can this be resolved? I am not sure it can.
Will the Euro survive? Only if it lets these countries secede from the EU.
How long will this take. I think this Autumn will see the real problems beginning to surface. Whatever the EU can cobble together once the other countries realise the Exposure of the EU central bank to huge losses which may NEVER be repaid I think major restructuring of the EU is inevitable.
France and Germany are strong enough to keep the Euro going but they cannot and I think will not continue to bail out these countries.
This could be the start or a great deal of economic and structural change in Europe.
What do others thyink?
kers.
I think Greece is the key to all this.
I see 3 options:
1 - eurozone keeps throwing money to Greece to keep it afloat.
2 - Greece accepts severe public cuts and higher taxes (unlikely IMO)
3 - defaults and goes back to the dracma (or whatever they had)
If they go for option 3 then i reackon it's all over and we'll have a much smaller eurozone or everyone goes their own way.
my humble and ill informed opinion or course!
I see 3 options:
1 - eurozone keeps throwing money to Greece to keep it afloat.
2 - Greece accepts severe public cuts and higher taxes (unlikely IMO)
3 - defaults and goes back to the dracma (or whatever they had)
If they go for option 3 then i reackon it's all over and we'll have a much smaller eurozone or everyone goes their own way.
my humble and ill informed opinion or course!
davepoth said:
The situation is as I see it that Greece can't dig itself out until people invest in the country. Would you put any money into Greece at all?
As always when you lend money to a mate your chances of getting repaid depend very much upon what he's going to use the money for!Greece's politicians need to wake up, smell the coffee and get themselves a German phrasebook.
Ozzie Osmond said:
Greece's politicians need to wake up, smell the coffee and get themselves a German phrasebook.
Why should they?Giving the choice between closing some public service or not paying themselves what will they choose?
A system which allows people to spend taxpayers money to make themselves popular is destined to fail
The fundamental problem is that Greece does not have a very efficient civil society. Tax evasion is a national pastime. Everyone does it.
It is no wonder the Government has no money. And the harder the Government squeeze, the more the public push back. Already, there is growing evidence of civil disobedience in Greece, with people getting on buses and trains and refusing to pay for a ticket etc.. Anything that involves paying money to public institutions is seeing more and more people simply refusing to pay.
Its a shambles and it is not going to get any better soon IMO.
It is no wonder the Government has no money. And the harder the Government squeeze, the more the public push back. Already, there is growing evidence of civil disobedience in Greece, with people getting on buses and trains and refusing to pay for a ticket etc.. Anything that involves paying money to public institutions is seeing more and more people simply refusing to pay.
Its a shambles and it is not going to get any better soon IMO.
Steffan said:
..
Will the Euro survive? Only if it lets these countries secede from the EU.
If the Euro does not survive, what impact does that have on the UK/Germany exchange rate?Will the Euro survive? Only if it lets these countries secede from the EU.
AFAIK 1 Euro was equivalent to 1.96 Deutsche Marks (rounded)
Euro is currently 88p
So we are trading about £ to DM 2.22, about the lowest rate ever for the Pound, I remember 3DM+ to the £ for so long. I recall Lawson tracked it at DM 3.20 to the £.
Will the independent Deutsche Mark, is & when it returns, be even stronger against the £.
Mermaid said:
If the Euro does not survive, what impact does that have on the UK/Germany exchange rate?
AFAIK 1 Euro was equivalent to 1.96 Deutsche Marks (rounded)
Euro is currently 88p
So we are trading about £ to DM 2.22, about the lowest rate ever for the Pound, I remember 3DM+ to the £ for so long. I recall Lawson tracked it at DM 3.20 to the £.
Will the independent Deutsche Mark, is & when it returns, be even stronger against the £.
Doesn't make a difference what the numbers are really - so long as it's at a sustainable level. The pound has devalued a bit over the last couple of years which was important to make sure they didn't call it the PIIUKGS.AFAIK 1 Euro was equivalent to 1.96 Deutsche Marks (rounded)
Euro is currently 88p
So we are trading about £ to DM 2.22, about the lowest rate ever for the Pound, I remember 3DM+ to the £ for so long. I recall Lawson tracked it at DM 3.20 to the £.
Will the independent Deutsche Mark, is & when it returns, be even stronger against the £.
toppstuff said:
The fundamental problem is that Greece does not have a very efficient civil society. Tax evasion is a national pastime. Everyone does it.
It is no wonder the Government has no money. And the harder the Government squeeze, the more the public push back. Already, there is growing evidence of civil disobedience in Greece, with people getting on buses and trains and refusing to pay for a ticket etc.. Anything that involves paying money to public institutions is seeing more and more people simply refusing to pay.
Its a shambles and it is not going to get any better soon IMO.
another way to put this is that the state has failed so spectacularly to do its job that the people want nothing to do with it. which is very sensible of them.It is no wonder the Government has no money. And the harder the Government squeeze, the more the public push back. Already, there is growing evidence of civil disobedience in Greece, with people getting on buses and trains and refusing to pay for a ticket etc.. Anything that involves paying money to public institutions is seeing more and more people simply refusing to pay.
Its a shambles and it is not going to get any better soon IMO.
Use Psychology said:
toppstuff said:
The fundamental problem is that Greece does not have a very efficient civil society. Tax evasion is a national pastime. Everyone does it.
It is no wonder the Government has no money. And the harder the Government squeeze, the more the public push back. Already, there is growing evidence of civil disobedience in Greece, with people getting on buses and trains and refusing to pay for a ticket etc.. Anything that involves paying money to public institutions is seeing more and more people simply refusing to pay.
Its a shambles and it is not going to get any better soon IMO.
another way to put this is that the state has failed so spectacularly to do its job that the people want nothing to do with it. which is very sensible of them.It is no wonder the Government has no money. And the harder the Government squeeze, the more the public push back. Already, there is growing evidence of civil disobedience in Greece, with people getting on buses and trains and refusing to pay for a ticket etc.. Anything that involves paying money to public institutions is seeing more and more people simply refusing to pay.
Its a shambles and it is not going to get any better soon IMO.
Steffan said:
I began a thread in February highlighting the problem of the PIGS (Portugal.Ireland, Greece, Spain)
Well, I think you've forgotten an "I".Quite how we incorporate the accession countries in this acronym I don't know.
I have always argued that the politicians at the heart of the EU and the Euro will attempt to support it, whatever the cost.
Today, again, I've been proved right.
Doesn't take much of a brain to ask, "What about a few months hence?".
Very obvious that "austerity" isn't going to happen.
Can someone explain to me why this situation doesn't happen in the USA? It is roughly the same size as the Eurozone in terms of population and GDP, it has a single currency and has states with wildly different economies.
Is it because individual states are not allowed to run up massive debts like the Euro countries have?
Is it because individual states are not allowed to run up massive debts like the Euro countries have?
CzechItOut said:
Can someone explain to me why this situation doesn't happen in the USA? It is roughly the same size as the Eurozone in terms of population and GDP, it has a single currency and has states with wildly different economies.
Is it because individual states are not allowed to run up massive debts like the Euro countries have?
Have you seen USA's national debt??Is it because individual states are not allowed to run up massive debts like the Euro countries have?
Google it and it will put ours into perspective.
davepoth said:
The situation is as I see it that Greece can't dig itself out until people invest in the country. Would you put any money into Greece at all?
No-one with any sense would, but that won't stop the EU putting your money into Greece to try to save it's precious euro project.CzechItOut said:
Can someone explain to me why this situation doesn't happen in the USA? It is roughly the same size as the Eurozone in terms of population and GDP, it has a single currency and has states with wildly different economies.
Is it because individual states are not allowed to run up massive debts like the Euro countries have?
A lot of States are required by State law to pass a balanced budget each year (the ones not in financial trouble anyway)Is it because individual states are not allowed to run up massive debts like the Euro countries have?
The biggest problem in the US right now is out of control FEDERAL spending.
WhoseGeneration said:
Steffan said:
I began a thread in February highlighting the problem of the PIGS (Portugal.Ireland, Greece, Spain)
Well, I think you've forgotten an "I".Quite how we incorporate the accession countries in this acronym I don't know.
I have always argued that the politicians at the heart of the EU and the Euro will attempt to support it, whatever the cost.
Today, again, I've been proved right.
Doesn't take much of a brain to ask, "What about a few months hence?".
Very obvious that "austerity" isn't going to happen.
However I simply do not think Greece is recoverable. Permanently. Ever.
Greece will not take the necessary steps and will fail again comprehensively.
The other European countries can try and cover this up with loans doomed to become gifts but this will not work.
All the European countries will eventually realise just how huge the cost of keeping the PIGS in the Euro is and see this is unsustainable.
Certainly within 6 months and very possibly much less the other PIGS Ireland Portugal ans Spain will need another bail out and reality will set in.
The result will be the ruination of the careers` of Merkle and Sarkozy and the collapse of the Euro in its current form. Perhaps not a bad thing
I am certain the Euro will continue with the solvent nations like France Germany Holland Sweden etc and will remain as a prime currency.
But the greater Euro cannot and will not go on.
This is major permanent change in the European Union of a size that no-one was anticipating a few years ago. The face of Europe is changing once again and I believe the new Euro and European Assembly will be dramatically affected.
Perhaps we are beginning to see some of the long term consequences of the first run on the Worlds Banks in 120 years.
I actually support the original cocept of a European Trade area and cooperation economically throughout Europe. Umfortunately this has been hijacked by ambitious self serving politicians who have created a monolithic gravy train serving themselves and their families and friends. Not good at all.
Amazingly the PIGS will collectively bring down these excesses as the spotlight of reality hits the utter nonsense of trying to maintain an unsustainable economic disaster.
The various Anti European Political parties need do nothing.
The stage is set the actors in the spotlight.
This is economic disaster coming at express train speed all by itself.
The successive failures of the Banking sector, the Regultors and the various Governments and most emphatically the whole cabal or European Finance Ministers en masse have achieved disaster in the Euro all by themselves.
The cost is going to be huge and will destroy the greater part of European Reserves. These loans to the PIGS are UNRECOVERABLE GIFTS.
Hundreds of millions of Euros will be lost.
I just hope reality sets in with Cameron and Co early enough to stop throwing money down this drain.
The Germans and French will try to chase the rainbow but it cannot be done.
That's why I set up this thread. I really think this is the most serious financial crisis in modern times.
When did a European country go bust? And go bust they will.
Steffan said:
I do not disagree with you at the MOMENT.
However I simply do not think Greece is recoverable. Permanently. Ever.
Greece will not take the necessary steps and will fail again comprehensively.
The other European countries can try and cover this up with loans doomed to become gifts but this will not work.
All the European countries will eventually realise just how huge the cost of keeping the PIGS in the Euro is and see this is unsustainable.
Certainly within 6 months and very possibly much less the other PIGS Ireland Portugal ans Spain will need another bail out and reality will set in.
The result will be the ruination of the careers` of Merkle and Sarkozy and the collapse of the Euro in its current form. Perhaps not a bad thing
I am certain the Euro will continue with the solvent nations like France Germany Holland Sweden etc and will remain as a prime currency.
But the greater Euro cannot and will not go on.
This is major permanent change in the European Union of a size that no-one was anticipating a few years ago. The face of Europe is changing once again and I believe the new Euro and European Assembly will be dramatically affected.
Perhaps we are beginning to see some of the long term consequences of the first run on the Worlds Banks in 120 years.
I actually support the original cocept of a European Trade area and cooperation economically throughout Europe. Umfortunately this has been hijacked by ambitious self serving politicians who have created a monolithic gravy train serving themselves and their families and friends. Not good at all.
Amazingly the PIGS will collectively bring down these excesses as the spotlight of reality hits the utter nonsense of trying to maintain an unsustainable economic disaster.
The various Anti European Political parties need do nothing.
The stage is set the actors in the spotlight.
This is economic disaster coming at express train speed all by itself.
The successive failures of the Banking sector, the Regultors and the various Governments and most emphatically the whole cabal or European Finance Ministers en masse have achieved disaster in the Euro all by themselves.
The cost is going to be huge and will destroy the greater part of European Reserves. These loans to the PIGS are UNRECOVERABLE GIFTS.
Hundreds of millions of Euros will be lost.
I just hope reality sets in with Cameron and Co early enough to stop throwing money down this drain.
The Germans and French will try to chase the rainbow but it cannot be done.
That's why I set up this thread. I really think this is the most serious financial crisis in modern times.
When did a European country go bust? And go bust they will.
Hmm, let's consider another motive of the architects of rescue plans. What their respective banking industries are telling them.However I simply do not think Greece is recoverable. Permanently. Ever.
Greece will not take the necessary steps and will fail again comprehensively.
The other European countries can try and cover this up with loans doomed to become gifts but this will not work.
All the European countries will eventually realise just how huge the cost of keeping the PIGS in the Euro is and see this is unsustainable.
Certainly within 6 months and very possibly much less the other PIGS Ireland Portugal ans Spain will need another bail out and reality will set in.
The result will be the ruination of the careers` of Merkle and Sarkozy and the collapse of the Euro in its current form. Perhaps not a bad thing
I am certain the Euro will continue with the solvent nations like France Germany Holland Sweden etc and will remain as a prime currency.
But the greater Euro cannot and will not go on.
This is major permanent change in the European Union of a size that no-one was anticipating a few years ago. The face of Europe is changing once again and I believe the new Euro and European Assembly will be dramatically affected.
Perhaps we are beginning to see some of the long term consequences of the first run on the Worlds Banks in 120 years.
I actually support the original cocept of a European Trade area and cooperation economically throughout Europe. Umfortunately this has been hijacked by ambitious self serving politicians who have created a monolithic gravy train serving themselves and their families and friends. Not good at all.
Amazingly the PIGS will collectively bring down these excesses as the spotlight of reality hits the utter nonsense of trying to maintain an unsustainable economic disaster.
The various Anti European Political parties need do nothing.
The stage is set the actors in the spotlight.
This is economic disaster coming at express train speed all by itself.
The successive failures of the Banking sector, the Regultors and the various Governments and most emphatically the whole cabal or European Finance Ministers en masse have achieved disaster in the Euro all by themselves.
The cost is going to be huge and will destroy the greater part of European Reserves. These loans to the PIGS are UNRECOVERABLE GIFTS.
Hundreds of millions of Euros will be lost.
I just hope reality sets in with Cameron and Co early enough to stop throwing money down this drain.
The Germans and French will try to chase the rainbow but it cannot be done.
That's why I set up this thread. I really think this is the most serious financial crisis in modern times.
When did a European country go bust? And go bust they will.
"We're on the hook here".
"So, your taxpayers support us or your taxpayers suffer if we have major losses".
It's the "To big to fail", again.
The current distortion of Capitalism.
The only remedy, of course, is default and a return to individual currencies.
Then, politics is economics and economics is politics.
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