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Steffan
6,177 posts
97 months
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Mermaid said: Globs said: I think you meant to say: "The taxpayers of europe cannot afford to bail out Italy and Spain and Portugal and all the others." But they will. It' only money. Once again Mermaid you could indeed, be right. But this situation has occurred because the defaulters are all wed to spending massively more than they earn. What I cannot understand is how will the EU keep paying for this largesse? The austerity measures will never address the economic collapse of the defaulters, in a recession. Growth and increased productivity could. But the insolvent states cannot achieve that through austerity and whilst remaining within the EU. Therefore if this continues the EU will be locked onto a spiral of decline. Rather than face the reality of the abject insolvency of the defaulters the EU will vote to bail them out permanently, if your line of thought, is followed through by the EU. I do agree with you that is a possibility. But that will ensure that the EU itself is on a course to collapse. The EU cannot afford to either bail out these states or permanently subsidise half of Europe. It is totally unaffordable. Printing funny money happily would be a possible means, but the result would be massive inflation and the collapse of the Euro. Which will ensure a great many more insolvencies. I am not sating you are wrong. Indeed you and others may be correct. But the consequences of the EU continuing this line will be absolutely suicidal. Unless someone can offer an explanation as to how it could be otherwise.
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Mermaid
12,481 posts
40 months
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Steffan said: ...I am not stating you are wrong. Indeed you and others may be correct. But the consequences of the EU continuing this line will be absolutely suicidal. Unless someone can offer an explanation as to how it could be otherwise. The type & amount of political correctness will ensure a fudge that keeps all the people happy all the time, till an external event crystallizes sinks the whole shabang.
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Jaged
3,088 posts
63 months
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If I read you guys correctly- all money ends up back with the Goverment via taxation (eventualy), any Gov' issuing more and more money (QE) only risks inflation?
But if QE generates growth, all is well?
I can see the Financial convergence "Urge" getting stronger as this goes on and why I think all the Politicos are supporting it.
It will probably require significant "Austerity" to balance the books and I can see the creation of an European Defence Force as a way to acheive this.
This being the ultimate Political objective since the creation of the EU, to avoid WW3.
UK Gov' have already said we are going to join with France on Defence, so a logical step would be the creation of the EU Army, funded by all states, but at a much lower cost to each state than currently maintaining their own.
To acheive all this (get public to agree) I forsee the creation of a specific EU Federal Defence Tax.
Each of us will pay the Federal Tax, and so it will balance out to each state, based upon population and % employed.
Thus the stronger Nations pay more, but get more protection by definition.
Of course there will still be "State" Taxes, which each Soverign will raise and spend as it sees fit.
Do we have a strong enough Urge yet?
Let me re-phrase, if your overall tax cut drops by 20%, would you be interested?
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TallbutBuxomly
11,823 posts
85 months
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Jaged said: If I read you guys correctly- all money ends up back with the Goverment via taxation (eventualy), any Gov' issuing more and more money (QE) only risks inflation?
But if QE generates growth, all is well?
I can see the Financial convergence "Urge" getting stronger as this goes on and why I think all the Politicos are supporting it.
It will probably require significant "Austerity" to balance the books and I can see the creation of an European Defence Force as a way to acheive this.
This being the ultimate Political objective since the creation of the EU, to avoid WW3.
UK Gov' have already said we are going to join with France on Defence, so a logical step would be the creation of the EU Army, funded by all states, but at a much lower cost to each state than currently maintaining their own.
To acheive all this (get public to agree) I forsee the creation of a specific EU Federal Defence Tax.
Each of us will pay the Federal Tax, and so it will balance out to each state, based upon population and % employed.
Thus the stronger Nations pay more, but get more protection by definition.
Of course there will still be "State" Taxes, which each Soverign will raise and spend as it sees fit.
Do we have a strong enough Urge yet?
Let me re-phrase, if your overall tax cut drops by 20%, would you be interested? NO
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GlenMH
3,908 posts
112 months
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TallbutBuxomly said: NO Wot 'e said.
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WhoseGeneration
4,090 posts
76 months
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Mermaid
12,481 posts
40 months
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WhoseGeneration said: Angie has been seduced by the southern Europeans (& bullied by the Yanks).
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WhoseGeneration
4,090 posts
76 months
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Mermaid said: (& bullied by the Yanks). This, I suspect, is of more relevance.
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Mermaid
12,481 posts
40 months
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Steffan
6,177 posts
97 months
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Mermaid said: Another interesting observation, Mermaid. With an excellent link: I do agree that political pressures have significance in every concern in the western world. I do also believe, that we are moving towards something of a watershed in this matter. It does seem that the point has being reached where the EU leaders, will either have to find a mutually acceptable permanent subsidy, to be available to the defaulters regularly, to ensure their continuing to spend more than they earn, or the EU leaders will have to face the problem of the defaulters leaving the Euro and the chaos that ensues that process. Not an easy choice. Especially when the EU leaders are all politicians and therefore all hate difficult decisions. I do think that the repeated failures of the last few bail outs by the EU, can no longer be continued by the EU, because the pattern of repeated return to more bailouts, now clearly apparent in the recent past, precludes that approach and that the point has therefore, passed. The EU will therefore be looking for a permanent subsidy arrangement. The question must be can they find one? I am also increasingly aware that the body of opinion, that has for some time suggested on this thread, that the EU will never allow a failure of the EU, under any circumstances and that, come what may the EU will therefore prevent defaults, has considerable support and clearly has an arguable case to make on that point. Which, could indeed suggest that a permanent subsidy arrangement, may be found. I think that the EU has a real problem on its hands and I remain unconvinced that the EU will find the formula that they are seeking. I cannot see how the EU can afford to permanently subsidise 150 Million people and support both the unaffordable lifestyles and the unsustainable fiscal approach, that in themselves are unable to support the defaulters. Nor can I see how the EU can keep pretending (for that is what it is), that the subsidy being paid to the defaulters is anything other than a subsidy. If Spain borrows enough to continue to fail steadily as an economy there is no real prospect that Spain, as an example, could ever repay, these additional loans nor indeed the interest on the loans. As can none of the other defaulters. But the EU is in control of the process. The EU has the printing presses and the considerable resources of the union of the members with which to forge some sort of permanent, or at least semi permanent or in extremis, something that lasts longer than a few days by way of a new approach. Our concern must be for the UK. Had John Major has his way in the original attempt by the UK to join the EU we would hopelessly enmeshed within the failing Euro by now. We are not, which proves that “Its an ill wind……” is as true now as it ever was. I do hope that we make the most of that good fortune as this plays out.
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HundredthIdiot
4,353 posts
153 months
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http://www.bbc.co.uk/news/business-19044341"In the past, the ECB has bought government bonds in small parcels of 20bn euros ($24.5bn; £15.6bn) each week....Mr Schulz cites the Bank of England as an example. It has spent the equivalent of 20% of UK national income or GDP on government debt. The equivalent in the eurozone would be a bond purchase of 1.6 trillion euros - a highly unlikely amount for the ECB to contemplate." I don't see a stat for how much govt debt the ECB has on its books already, but perhaps the UK comparison demonstrates how much funny money can be used in a recession apparently without dire consequences.
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Gary11
3,433 posts
70 months
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"to be available to the defaulters regularly"
I think they have had enough and should repay their debts, to think of default relating to recent bailouts in light of previous indebtedness is IMO stupid and imoral,to consider further loans in this light is just unthinkable....unless they know something we dont??
G
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HundredthIdiot
4,353 posts
153 months
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@Steffan, your continued use of the term "defaulters" to refer to any country you consider a credit risk is confusing and ridiculous. Only Greece has defaulted in any meaningful way.
It's almost as if faced by the stubborn failure of reality to match your dire predictions you've started to report your failed predictions as fact.
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Blib
20,639 posts
66 months
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Would these 'defaulters' had been able to carry on without outside emergency finance?
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Mermaid
12,481 posts
40 months
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Geithner, Schaeuble - happy EU leaders are safeguarding Euro financial stability, express confidence in ability to reform
So the Americans & the Germans have a cut a deal.
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1point7bar
1,091 posts
17 months
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HundredthIdiot said: http://www.bbc.co.uk/news/business-19044341"In the past, the ECB has bought government bonds in small parcels of 20bn euros ($24.5bn; £15.6bn) each week....Mr Schulz cites the Bank of England as an example. It has spent the equivalent of 20% of UK national income or GDP on government debt. The equivalent in the eurozone would be a bond purchase of 1.6 trillion euros - a highly unlikely amount for the ECB to contemplate." I don't see a stat for how much govt debt the ECB has on its books already, but perhaps the UK comparison demonstrates how much funny money can be used in a recession apparently without dire consequences. This is not about economic cycles.
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Silver993tt
8,084 posts
108 months
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HundredthIdiot said: @Steffan, your continued use of the term "defaulters" to refer to any country you consider a credit risk is confusing and ridiculous. Only Greece has defaulted in any meaningful way.
It's almost as if faced by the stubborn failure of reality to match your dire predictions you've started to report your failed predictions as fact. yes but he wants the other countries to default and the euro to plunge simply to prove a personal point. The problem is, it hasn't happened and looks like it won't happen but I suppose trying to talk down a few nations economies on PH is really going to frighten them into defaulting 
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HundredthIdiot
4,353 posts
153 months
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1point7bar said: This is not about economic cycles. I didn't say anything about economic cycles.
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Steffan
6,177 posts
97 months
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Silver993tt said: HundredthIdiot said: @Steffan, your continued use of the term "defaulters" to refer to any country you consider a credit risk is confusing and ridiculous. Only Greece has defaulted in any meaningful way.
It's almost as if faced by the stubborn failure of reality to match your dire predictions you've started to report your failed predictions as fact. yes but he wants the other countries to default and the euro to plunge simply to prove a personal point. The problem is, it hasn't happened and looks like it won't happen but I suppose trying to talk down a few nations economies on PH is really going to frighten them into defaulting I am an observer in this affair. I cannot see how the HBAT's (an alternative description suggested by Driller, for the term defaulters, if the term, defaulters concerns you) can recover when, already insolvent, they are continuing to overspend and borrow from the EU huge sums that they can never hope to repay. You are welcome to criticise my motivation, or indeed any other points you disagree with. However it would be even better, if you could explain how the EU policy of constantly bailing out the HBAT's who cannot afford the lifestyles they lead, without constant subsidy, can lead to recovery. That would be interesting. I cannot see that it can. Hence my anticipation that the crunch must come.
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Mermaid
12,481 posts
40 months
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Steffan said: ...Hence my anticipation that the crunch must come. Steffan - I reckon the big bazookas, synchronised in Olympic spirit, will be out soon. Boom comes before bust.
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