Is the end nigh for the Euro? [vol. 3]
Discussion
Digga said:
Actually I don't I've been saying it - to much criticism - to anyone who asks, since 2002. Early on, I felt like the boy in the story of the Emperor's New Clothes.
Indeed, Reading Carney's comments you;d think he was the first person to say it. It is exactly what many of us have said from the start, and one of the key reasons why we voted to stay out of the Euro (via John Major etc)
It was only ever going to be a matter of time before full fiscal union was inevitable. It is the solution, but is politically impossible and getting even harder to foresee as National interest rise again.
Digga said:
Interestingly, over the last 2 to 5 years, there's been a noticeable increase in Russian tourists to Greece. And they both use the same Cyrilic alphabet... 
Cyprus were selling Euro passports to Russian in return for a 100,000 Euro deposit at a Cypriot bank, so I think the Russian moving in is well known. However are these the oil rich ? Or new wealth trying to build a secure place OUTSIDE of Putin's domain, rather than a formal tie up of politics and geop political alignment.
I posted earlier that the Greeks could well know look for Non EU finance sources, but this would be extremely radical and if the cash injection wasn't then used to repay EU Debt, then surely the only credible response would be to sling them out of the Eurozone.
I don't see how adding another 100bn of debt (from any source) solves anything ?
Gargamel said:
However are these the oil rich ? Or new wealth trying to build a secure place OUTSIDE of Putin's domain, rather than a formal tie up of politics and geop political alignment.
Personally, I don't know.The ones I have seen are, outwardly, fairly ordinary, middle-class families - not the loud, brash, flash types that I've seen in other tourist destinations around the world, but then in Greece, I was not in resorts/places where you'd really expect the high flyers.
As for what is a wise idea or not, I really don;t think external observers can hope to understand the logic that prevails within.
Digga said:
Interestingly, over the last 2 to 5 years, there's been a noticeable increase in Russian tourists to Greece. And they both use the same Cyrilic alphabet...
No, sorry, different alphabets. Greeks do not use Cyrillic. Their alphabet is different and older. Cyrillic was invented by a monk called Cyril (and his mate, Methodius, who doesn't get star billing), and uses characters from the Greek and Latin alphabets, along with some unique, bespoke characters created to suit Slavic sounds.SilverSixer said:
Digga said:
Interestingly, over the last 2 to 5 years, there's been a noticeable increase in Russian tourists to Greece. And they both use the same Cyrilic alphabet...
No, sorry, different alphabets. Greeks do not use Cyrillic. Their alphabet is different and older. Cyrillic was invented by a monk called Cyril (and his mate, Methodius, who doesn't get star billing), and uses characters from the Greek and Latin alphabets, along with some unique, bespoke characters created to suit Slavic sounds.
SilverSixer said:
No, sorry, different alphabets. Greeks do not use Cyrillic.
Ah - that explains something. I thought my BIL was being obtuse when he said he couldn't read any Russian words. He did not explain it that way - there are similar characters though.I can't read Russian, although I recognise a few words. (But I know not to get on an Aeroflot plane.)
Well the Telegraph (Torygraph?) seems to have decided that Germany has a problem see
http://www.telegraph.co.uk/news/worldnews/europe/g...
Yet in the same issue the Telegraph also suggest the goose of Greece is well and truly cooked see:
http://www.telegraph.co.uk/finance/economics/11378...
I guess that covers most options!
Socialists have become very adept and speaking warm words whilst operating policies that are ice cold. Spending other people's money ad nauseam being perhaps their greatest vice. I have grave doubts about the Euro and the EU no one will be surprised to know on here! I cannot see how a country with the paupers economy that Greece has become can possibly remain within a a wholly unaffordable currency dominated by a superstate, Germany. Both the EU and Greece say they can remain within the EU. However no one has yet managed to produce a realistic method of actually achieving that. And a fair number have tried.
I actually think that the new Greek government was entirely right to state clearly that no sensible economist would support the proposal that an economy the size of Greece can actually afford to repay debts the size of the Greek debts. I think that is a self evident truth but nonetheless needs restating. But Greece voluntarily took all these debts on to support an unaffordable lifestyle. It does seem to me that all the huffing and puffing by both Greece and the EU is going to come to nothing. If the EU do not allow Greece manoevering space Greece will pull out of the EU I think. I cannot see how the EU can do that and maintain faith with the other failing states within the EU all of whom are very seriously in debt.
Negotiations, suggestions and proposed solutions may be discussed at length and every avenue carefully investigated to save Greece and be fully explored by both Greece and the EU in an attempt to find a solution and to be seen to be an attempt to find a solution. Which may take some weeks so presumably there will be an inter regnum arrangement holding the position over until full discussion has been effected. But it still seems to me that this matter is not going anywhere because there is simply nowhere for it to go.
Greece has quite rightly stated that it cannot afford to repay its massive debts to the EU. Therefore it seems to me Greece must leave the EU. But the EU has still got a huge amount of power and the printing presses needed to QE to their hearts content. But how do they justify special treatment for one failing state out of the eight or mor failing states? For those reasons I still think Greece must now default.
http://www.telegraph.co.uk/news/worldnews/europe/g...
Yet in the same issue the Telegraph also suggest the goose of Greece is well and truly cooked see:
http://www.telegraph.co.uk/finance/economics/11378...
I guess that covers most options!
Socialists have become very adept and speaking warm words whilst operating policies that are ice cold. Spending other people's money ad nauseam being perhaps their greatest vice. I have grave doubts about the Euro and the EU no one will be surprised to know on here! I cannot see how a country with the paupers economy that Greece has become can possibly remain within a a wholly unaffordable currency dominated by a superstate, Germany. Both the EU and Greece say they can remain within the EU. However no one has yet managed to produce a realistic method of actually achieving that. And a fair number have tried.
I actually think that the new Greek government was entirely right to state clearly that no sensible economist would support the proposal that an economy the size of Greece can actually afford to repay debts the size of the Greek debts. I think that is a self evident truth but nonetheless needs restating. But Greece voluntarily took all these debts on to support an unaffordable lifestyle. It does seem to me that all the huffing and puffing by both Greece and the EU is going to come to nothing. If the EU do not allow Greece manoevering space Greece will pull out of the EU I think. I cannot see how the EU can do that and maintain faith with the other failing states within the EU all of whom are very seriously in debt.
Negotiations, suggestions and proposed solutions may be discussed at length and every avenue carefully investigated to save Greece and be fully explored by both Greece and the EU in an attempt to find a solution and to be seen to be an attempt to find a solution. Which may take some weeks so presumably there will be an inter regnum arrangement holding the position over until full discussion has been effected. But it still seems to me that this matter is not going anywhere because there is simply nowhere for it to go.
Greece has quite rightly stated that it cannot afford to repay its massive debts to the EU. Therefore it seems to me Greece must leave the EU. But the EU has still got a huge amount of power and the printing presses needed to QE to their hearts content. But how do they justify special treatment for one failing state out of the eight or mor failing states? For those reasons I still think Greece must now default.
jogon said:
I suppose we have this all to look forward again when the Podemos win in Spain. Ding ding round 2 unless Portugal or Italy blink first and Ireland doesn't seem very happy with it's new water rates.
I was thinking exactly this myself yesterday.It's like that old joke about if you owe a bit of money to the bank, you're in trouble, but if you owe a hell of a lot of money to them, they're the ones with the problem.
hora said:
When Greece exits the Euro- how are the Greeks going to fund their wages/lifestyle/current economy?
Its not going to be through tax receipts is it, so how? I'd be interested to see how it pans out (or should we say 'implodes'?).
Probably via a huge boom in there suddenly very cheap tourism industry, and resurgent EU meddle free private banking system. Its not going to be through tax receipts is it, so how? I'd be interested to see how it pans out (or should we say 'implodes'?).
Digga said:
jogon said:
I suppose we have this all to look forward again when the Podemos win in Spain. Ding ding round 2 unless Portugal or Italy blink first and Ireland doesn't seem very happy with it's new water rates.
I was thinking exactly this myself yesterday.It's like that old joke about if you owe a bit of money to the bank, you're in trouble, but if you owe a hell of a lot of money to them, they're the ones with the problem.
That was beloved of the many Insolvency ractitioners I knew personally when practising. One case sticks in by memory where an Architect manging a big property company who had personal guarantees for several hundred million when hs empire folded. He stated his terms which were very expensive, to sort the mess out literally millions a year.
The Bank threatened bankruptcy he went on holiday and informed the bank they needed him much more than he needed them. He was absolutely right, within a fortnight he was back at the helm on his terms and he sorted the mess out and was paid handsomely to do it by the Bank. Fact of life in business the seriously over borrowed are safer than the banks who leant the money. I have seen this time after time with large personal guarantees. Only very rarely do the guarantors lose out.
What happens when country does this is another matter altogether. The way things are going I think we are going to find out in the EU failing states nonsense. I cannot see how all this debt will be repaid by all the failing states. As Syriza said it does defy economic logic. Not unlike the banks in the old joke above the risk becomes the lenders problem. I find the ability of the political main players not to have any responsibility for anything very challenging. Way modern politics has developed regrettably.
Timmy40 said:
Probably via a huge boom in there suddenly very cheap tourism industry, and resurgent EU meddle free private banking system.
How cheap are holidays actually going to be? The flight is usually the major part of the cost and that's not going to change as fuel etc is priced in USD (and the oil companies are unlikely to take payment in Drachma), imported food and drink will be expensive, it's just the hotel cost that might be cheaper. I'd be surprised if the price falls significantly.Andy Zarse said:
hora said:
When Greece exits the Euro- how are the Greeks going to fund their wages/lifestyle/current economy?
Easy. The Greeks don't currently have a lifestyle. Cveryfew go on holiday or have anything more than very basic healthcare. They'll print as many drachmas as they need, exchange rate with eu/$/£ will make tourism attractive and exports cheap.
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