Is the end nigh for the Euro? [vol. 3]
Discussion
DJRC said:
For the record I don't believe I have said the position of France is hopeless. I believe I have made the point several times that the French banks are severally exposed to the Spanish and Italian economies and that the Italian banks exposed to the Greek.
DJRC, I think I already answered you on this on Vol.2, do you have updated figures for the cross-exposures? Because I can grant you that for example, the exposure of Italian banks to Greece that you mention is, on an aggregated level, below 60m £.On a broader note, interesting noting how Shauble has quickly rebuffed Draghi saying that probably his words at the Jackson Hole meeting have been misinterpreted and no QE is on the cards. The Germans are more frightened than the rest of Europe.
Driller said:
I'm still waiting for a definition of "hopeless" though. You can't just bandy about words like hopeless and "toast", delivered in your typically casual and dispassionate fashion when talking about any country except the UK, without qualifying them.
My personal concern is that France, like the UK now to a certain extent, does not have any opposition to the tax & spend model. Moreover, the political debate in France is very seldom grounded in economic reality but rather the population are bribed by unrealistic protectionism and state largesse.As I say, the UK (and, for that matter Germany and USA) are by no means immune to the same nonsense, [i[but[/i] they are doing so from a far stronger economic position (for right now at least). I think the difficulty for France is that is would appear to require something of a political and cultural revolution to bring thinking into the terms required for progress.
Enricogto said:
On a broader note, interesting noting how Shauble has quickly rebuffed Draghi saying that probably his words at the Jackson Hole meeting have been misinterpreted and no QE is on the cards. The Germans are more frightened than the rest of Europe.
No surprise there; Germany is de-factop underwriter to the whole thing and we all know the German perspective on money printing.Enricogto said:
DJRC said:
For the record I don't believe I have said the position of France is hopeless. I believe I have made the point several times that the French banks are severally exposed to the Spanish and Italian economies and that the Italian banks exposed to the Greek.
DJRC, I think I already answered you on this on Vol.2, do you have updated figures for the cross-exposures? Because I can grant you that for example, the exposure of Italian banks to Greece that you mention is, on an aggregated level, below 60m £.On a broader note, interesting noting how Shauble has quickly rebuffed Draghi saying that probably his words at the Jackson Hole meeting have been misinterpreted and no QE is on the cards. The Germans are more frightened than the rest of Europe.
The fat layd's finance minister is singing: http://www.zerohedge.com/news/2014-08-28/german-fi...
Wolfgang Schaeuble said:
Europe needs to find ways to foster growth
I have never understood how,with so many countries with different cultures affecting their economic performance,the Eurozone could be successful.
It is difficult enough for the government of one country to get things right.
Before the Eurozone countries were able to set their own monetary policy according to their economic condition,although not perfect,it made sense.
At least then if a country got into financial problems it did not have the snowballing effect on all the others,in the same way it does now.
Not saying that all was perfect before but at least the weaker economies could devalue their currency and thus become more competitive with their exports or assist their tourist industry.
Now all they can do is hold there hand out for aid or indulge in highly corrosive QE.
It seems to me that it only benefits the larger corporations giving them access to a large pool of cheap labour assisted by freedom of movement between Eurozone countries which has lead to big socio/economic problems for the more successful countries.
Germany has of course benefitted by having an enlarged market in which to sell their exports at prices lower than they would be owing to the Euro,however even there problems are now evident.
It is difficult enough for the government of one country to get things right.
Before the Eurozone countries were able to set their own monetary policy according to their economic condition,although not perfect,it made sense.
At least then if a country got into financial problems it did not have the snowballing effect on all the others,in the same way it does now.
Not saying that all was perfect before but at least the weaker economies could devalue their currency and thus become more competitive with their exports or assist their tourist industry.
Now all they can do is hold there hand out for aid or indulge in highly corrosive QE.
It seems to me that it only benefits the larger corporations giving them access to a large pool of cheap labour assisted by freedom of movement between Eurozone countries which has lead to big socio/economic problems for the more successful countries.
Germany has of course benefitted by having an enlarged market in which to sell their exports at prices lower than they would be owing to the Euro,however even there problems are now evident.
Edited by avinalarf on Saturday 30th August 11:06
avinalarf said:
I have never understood how,with so many countries with different cultures affecting their economic performance,the Eurozone could be successful.
I have never understood why people don't get that the people in charge do whatever they want, make up any rules they want, change other rules to suit them and their plans and aspirations because they are the ones who decide. :-)Where's Steffan gone then? I'm still waiting for my definition of "hopeless" and "toast".
avinalarf said:
Before the Eurozone countries were able to set their own fiscal policy according to their economic condition,although not perfect,it made sense.
Unless I have misunderstood what you have said then I think you mean monetary policy rather than fiscal policy.The Euros failing is that it is a currency union with each country having their own fiscal policy. The best illustration I ever saw was it was described as a single circular train track with multiple trains all running at different speeds (or even in the wrong direction). Eventually you end up with a crash.
And yet Alex Salmond thinks we should do the same with an independent Scotland.
ralphrj said:
avinalarf said:
Before the Eurozone countries were able to set their own fiscal policy according to their economic condition,although not perfect,it made sense.
Unless I have misunderstood what you have said then I think you mean monetary policy rather than fiscal policy.The Euros failing is that it is a currency union with each country having their own fiscal policy. The best illustration I ever saw was it was described as a single circular train track with multiple trains all running at different speeds (or even in the wrong direction). Eventually you end up with a crash.
And yet Alex Salmond thinks we should do the same with an independent Scotland.
Driller said:
avinalarf said:
I have never understood how,with so many countries with different cultures affecting their economic performance,the Eurozone could be successful.
I have never understood why people don't get that the people in charge do whatever they want, make up any rules they want, change other rules to suit them and their plans and aspirations because they are the ones who decide. :-)Where's Steffan gone then? I'm still waiting for my definition of "hopeless" and "toast".
article in the Economist seems to confirm the general consensus on this thread
http://www.economist.com/news/leaders/21614137-if-...
http://www.economist.com/news/leaders/21614137-if-...
Reading between the lines of this one, this is not only to be the only MNC pulling manufacturing out of the EU: http://www.khl.com/magazines/construction-europe/d...
another desperate measure?
how long before negative interest rates?
ECB lowers eurozone interest rates to 0.05%
http://www.bbc.co.uk/news/business-29063348
how long before negative interest rates?
ECB lowers eurozone interest rates to 0.05%
http://www.bbc.co.uk/news/business-29063348
Scuffers said:
another desperate measure?
how long before negative interest rates?
ECB lowers eurozone interest rates to 0.05%
http://www.bbc.co.uk/news/business-29063348
Draghi: "for all the practical purposes, we have reached the lower bound".how long before negative interest rates?
ECB lowers eurozone interest rates to 0.05%
http://www.bbc.co.uk/news/business-29063348
In which case, as indicated by Scuffers, how long before there are impractical purposes?
Scuffers said:
another desperate measure?
how long before negative interest rates?
ECB lowers eurozone interest rates to 0.05%
http://www.bbc.co.uk/news/business-29063348
ECB announces purchases of asset backed securities! Unbelievable!! QE is officially here! how long before negative interest rates?
ECB lowers eurozone interest rates to 0.05%
http://www.bbc.co.uk/news/business-29063348
OZZIE! OZZIE! Where are you!!
Gassing Station | News, Politics & Economics | Top of Page | What's New | My Stuff