Is the end nigh for the Euro? [vol. 3]
Discussion
RYH64E said:
If we'd adopted the euro would we be doing as well as Germany, Holland and Denmark, or as badly as Greece, Spain and Italy? Who knows, but my guess is that we'd be in about the same position in that table either way, maybe better as the euro tends to assist stronger economies.
Good point (and I hope someone can still answer Driller's question regarding Spain) and I think, over the brief history of the Euro, you may be right, but as others here say, the tensions within the currency are really beginning to show - my take on the Euro as with the EU, is that neither can continue in their current form and the UK remaining on the sidelines will be a good mid term move. IN future, who knows, a more rational Eu and Euro might be better propositions. Never is a very long time.Driller said:
What happened in Spain for example around '86 and '94 then Digga because it was almost 45% in both cases?
Global recession - UK for about the same period.
Early 1990s recession
Early 1980s recession
It's a tradition. I wonder how well recovered Italy/Spain/Portugal/Greece will be come the early 2020s recession
There is a some correlation between the Youth Unemployment rate in Spain and the value of the Peseta prior to Euro conversion.
http://fxtop.com/en/historical-exchange-rates-grap...
I suspect that the decline in the youth unemployment rate rate from 1994 might reflect the huge expansion of development in Spain, driven by lower interest rates and an upcoming Euro conversion in 2002, as well as substantial EU investment in infrastructure, but I don't have any data to back that up.
loafer123 said:
There is a some correlation between the Youth Unemployment rate in Spain and the value of the Peseta prior to Euro conversion.
http://fxtop.com/en/historical-exchange-rates-grap...
I suspect that the decline in the youth unemployment rate rate from 1994 might reflect the huge expansion of development in Spain, driven by lower interest rates and an upcoming Euro conversion in 2002, as well as substantial EU investment in infrastructure, but I don't have any data to back that up.
Some people got mighty shafted in the conversion too IMHO the money had to come from somewhere ...the chickens always come home to roost .http://fxtop.com/en/historical-exchange-rates-grap...
I suspect that the decline in the youth unemployment rate rate from 1994 might reflect the huge expansion of development in Spain, driven by lower interest rates and an upcoming Euro conversion in 2002, as well as substantial EU investment in infrastructure, but I don't have any data to back that up.
Tartan Pixie said:
I can think of few things that are more beneficial to the UK than a peaceful and contented eastern Europe
Why ?Their skirmishes of recent times haven't affected us.
Previously when the Germans got involved that was a bit sticky but equally uniting them has upset Putin, which isn't helpful.
Us paying £8Bn a year, whilst being a net importer, seems very much like protection money which always goes up and up until we end up back in a fight, only now they are wealthier and better armed.
The club as it exists is doomed to fail or radically change (for the worse). Staying put and everything staying the same as it has been, has never been an option.
The option is to get out now, get out later or merge into a single, harmonious, European state
Gargamel said:
Welcome back, I have occasionally wondered where you went, are you still writing ?
Yes its true we do seem to be stuck with the fact that whilst the theory that a single currency union across different economies can't work, they do seem to be willing to throw fresh money at it, or financial ruin states in order to keep it on the road.
But I think the complete failure to enforce the Financial Stability pact must have consequences at some point, there seems to only be expedient answers, no will to take a harder road to bring about "convergence" (you don't hear anyone talk about economic convergence anymore)
I do think Marie Le Pen is the single biggest threat to the EU and by implication the Euro as a currency. Brexit is a sideshow, perfidious Albion was long discounted from the discussion. Though the economic impact will be substantial on the European economy if the EU get it wrong.
Interesting that there has been no comment on the ECB gently suggesting no further QE. Ok the £ fell a little on the news, but does the ECB really think the EU economy is ready to come of QE, or is it out of cash ?
Thanks, I've got three half written books that I should probably do something with but am studying maths with the OU so that tends to take up my time instead of writing, still plan on publishing at some point though. As for where I've been, not quite skid row and back but not far off. Things are looking up now though, hence a sudden interest in PH and a disturbing tendency to keep an eye on Maserati 3200's in the classifieds.Yes its true we do seem to be stuck with the fact that whilst the theory that a single currency union across different economies can't work, they do seem to be willing to throw fresh money at it, or financial ruin states in order to keep it on the road.
But I think the complete failure to enforce the Financial Stability pact must have consequences at some point, there seems to only be expedient answers, no will to take a harder road to bring about "convergence" (you don't hear anyone talk about economic convergence anymore)
I do think Marie Le Pen is the single biggest threat to the EU and by implication the Euro as a currency. Brexit is a sideshow, perfidious Albion was long discounted from the discussion. Though the economic impact will be substantial on the European economy if the EU get it wrong.
Interesting that there has been no comment on the ECB gently suggesting no further QE. Ok the £ fell a little on the news, but does the ECB really think the EU economy is ready to come of QE, or is it out of cash ?
Back on topic I have been keeping an eye on French politics and am quite intrigued to see how the rise in nationalist sentiment will play out, because it is easy to make lazy stereotypes about the EU being run by the Germans, however the Germans often seem to play the sergeant rather than the major, implementing grandiose French ideas about a social contract or acting as a meatshield for Poland, Holland, Hungary et al during the Greek crisis. Perhaps we are lulled in to this false sense of Germany running things because the current French president is too busy having his hair styled for the perfect moped look?
Whatever rises from the ashes of the current mess that is the EU it will be France that determines its shape just as France determined the shape of the current EU. They are the country in the middle, not just geographically but socially and politically too, so if the vision doesn't come from the French it won't come from anybody.
In this respect I think it's important to remember that the original French vision was for a core EU of countries with similar(ish) freedoms and economies rather than the enlarged EU that Britain and the USA worked so hard to implement off the back of the 1990's falling walls and toppling Lenin statues. This gives the incoming (UMP?) president an 'off the peg' solution to the EU's current woes - namely saying non (Or more likely getting Sargent Germany to say nein) to the movement of Eastern people and shrinking the federal part of the EU to a more manageable size.
RYH64E said:
So we can conclude that some eurozone economies are doing well and some aren't, coincidentally, the same ez countries that are doing well today have always done well, and the same countries that are doing badly have always done so. Or in the case of Italy and Greece, haven't done very well since the fall of the Roman empire and the death of Alexander the Great. And the UK, with our Great British Pound are doing better than some and worse than others.
If we'd adopted the euro would we be doing as well as Germany, Holland and Denmark, or as badly as Greece, Spain and Italy? Who knows, but my guess is that we'd be in about the same position in that table either way, maybe better as the euro tends to assist stronger economies.
Well said. Scientists, engineers and others seem to have the occasional fantasy that their field of study determines the fate of the world however economists are in a league of their own regarding their opinion of their own importance. Perhaps 'delusions of grandeur' should be placed as an occupational hazard for anyone working with money If we'd adopted the euro would we be doing as well as Germany, Holland and Denmark, or as badly as Greece, Spain and Italy? Who knows, but my guess is that we'd be in about the same position in that table either way, maybe better as the euro tends to assist stronger economies.
Tartan Pixie said:
Whatever rises from the ashes of the current mess that is the EU it will be France that determines its shape just as France determined the shape of the current EU. They are the country in the middle, not just geographically but socially and politically too, so if the vision doesn't come from the French it won't come from anybody.
Interesting TP, and of course historically correct. The French still dream of a "social"(ist) EU, and see the current version as a sell out to big business and capitalism, hence so much Gallic dissatisfaction with the current form of it. However, I wonder whether the economic doldrums that the French are in will allow them to really impose their vision of what the EU should be.Frau Angela has had power forced upon her by the relative economic success of Germany with their industry riding the weak € horse. The Germans didn't want to take the political lead of the EU, but now that they have had it forced upon them will they want to relinquish it to French pipe dreams of liberte, egalite and fraternite across the EU?
You may be right, the elections next year in France May be pivotal, at least Flamby will go! However, I see no fantastic leader waiting in the wings to replace him - hell, he has such delusions of grandeur that he might try and run again himself!
V8RX7 said:
Tartan Pixie said:
I can think of few things that are more beneficial to the UK than a peaceful and contented eastern Europe
Why ?Their skirmishes of recent times haven't affected us.
Previously when the Germans got involved that was a bit sticky but equally uniting them has upset Putin, which isn't helpful.
Us paying £8Bn a year, whilst being a net importer, seems very much like protection money which always goes up and up until we end up back in a fight, only now they are wealthier and better armed.
The club as it exists is doomed to fail or radically change (for the worse). Staying put and everything staying the same as it has been, has never been an option.
The option is to get out now, get out later or merge into a single, harmonious, European state
Personal rants aside we have already established that the eurozone is not going to survive in its current form so what's next? Well for a start Brexit means that NATO has lost its loudest voice at the EU table, however there is another strongly NATO country that has its own currency and has been giving the EU the 'letter's in the post' attitude to the euro - so expect the US state department to be looking for Polish speakers.
There's also the visigrad 4 who are loud on immigration issues and not about to be dictated to by Germany - Sound like a familiar sentiment?
There's also a lot of growth potential in eastern Europe, but god forbid we should do something constructive like investing in that growth!
There's also a question of who we're going to be allies with - What is the ROI on that £8Bn compared to investing in Saudi/Whhabi nutters? I'd take the Europeans tyvm.
And now the biggie - Consider for a moment what the realistic strategies are for the survival of the eurozone, is there any scenario you can see that continues with eurozone expansion in which the currency survives? I don't see any, though as always am happy to be corrected if I'm wrong.
The corollary to this is that for the euro to survive then some countries are going to have to be left out, perhaps not explicitly because the EU doesn't do explicitly but still, there's a bunch of up and coming economies that the UK has an open door to because of the role we have historically played who are about to be told what the limits of German taxpayers are (mostly because their media are too lazy to talk about Dutch or French taxpayers).
These are countries with high levels of education that will do well when the 3D printing revolution starts biting sufficiently to shut down Chinese factories, write them off as 'poor people scrounging for British jobs' if you want but I see eastern European immigration to the UK as a future strategic depth of the english speaking inventors of tomorrow. Guess they'll all have to learn French now
A two stage Europe was always on the cards at some point and IMO Britain had its ducks nicely in a row for being leader of this group, perhaps we still can be, I only hope that Sir Humphreys is up to the task.
YankeePorker said:
snip - see full post above
The French doldrums are a relative thing, I'm betting that a number of European countries would love to be doing as well as said doldrums.France is a magic trick, it's economy apparently able to levitate without supports that any German or English mind can perceive. Either the sorcerer teaches his apprentice the trick or the broom shall sweep the euro away.
THe French keep investing in their country rather than austerity.There are 4 villages close to me that have completley remodelled their street furniture and car parking,Money in France goes a round the system over and over,public jobs are done,signed off company buys more stuff,staff buy more stuff etc.Also don't forget that income tax for the family doesn't get paid until about 34000 Euro but cotisations are paid by no matter what.
anonymous said:
[redacted]
In this respect I actually think they have it right, spunk money on infrastructure creating employment. At least if meltdown occurs the country looks nice! Maybe preferable to giving it all to the banks and it all ending up inflating the stock market as per US and UK QE.Sarko did a good job of insulating the French from the immediate effects of the 2008 crash by infrastructure spending. The problem is longer term, because they keep spending more than they afford to, hence no budget in surfeit for over 20 years.
V8RX7 said:
Slightly off topic but I went on Safari in Kenya and thought it was pointless taking my mobile.
I couldn't believe it when I saw the Massi answering theirs on the Plains !
Even as far back as 2008 they had a pretty good infrastructure going. Solar-powered masts work well out there! There were loads of little phone shacks where people could buy or sell handsets and top-up PAYG contracts.I couldn't believe it when I saw the Massi answering theirs on the Plains !
Digga said:
V8RX7 said:
Slightly off topic but I went on Safari in Kenya and thought it was pointless taking my mobile.
I couldn't believe it when I saw the Massi answering theirs on the Plains !
Even as far back as 2008 they had a pretty good infrastructure going. Solar-powered masts work well out there! There were loads of little phone shacks where people could buy or sell handsets and top-up PAYG contracts.I couldn't believe it when I saw the Massi answering theirs on the Plains !
maffski said:
Digga said:
V8RX7 said:
Slightly off topic but I went on Safari in Kenya and thought it was pointless taking my mobile.
I couldn't believe it when I saw the Massi answering theirs on the Plains !
Even as far back as 2008 they had a pretty good infrastructure going. Solar-powered masts work well out there! There were loads of little phone shacks where people could buy or sell handsets and top-up PAYG contracts.I couldn't believe it when I saw the Massi answering theirs on the Plains !
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