Is the end nigh for the Euro? [vol. 3]
Discussion
Claudia Skies said:
By the way, those who compare Greece with Iceland clearly don't have the first idea what is going on. Iceland had a bombed-out banking sector. Greece is a bombed-out country.
And it could be said that those who don't know what was being said haven't got a clue 
while stating the bleedin' obvious wins no prizes.The point was that to an economically illiterate left wing government, and they all are to various degrees, the experience of Iceland recovering in a spritely manner without austerity could be seductive. If you didn't get it, even after the explanation second time around, I'll type slower for you next time.
As to collective giants surviving and doing well (and to help you out, what follows is imagery) herds of big fat dinosaurs still became extinct along with the small solo tiddlers. Every empire has its day and then has had its day.
Well the new Finance Minister seems to understand exactly the problem, I like the guts of his 'solution' but don't hold out much hope
Varoufakis a“We are not prepared to carry on pretending and extending, trying to enforce an unenforceable programme which for five years now has steadfastly refused to produce any tangible benefits,” he told the BBC’s Newsnight.
“The disease that we’re facing in Greece at the moment is that a problem of insolvency for five years has been dealt with as a problem of liquidity.”
Varoufakis a“We are not prepared to carry on pretending and extending, trying to enforce an unenforceable programme which for five years now has steadfastly refused to produce any tangible benefits,” he told the BBC’s Newsnight.
“The disease that we’re facing in Greece at the moment is that a problem of insolvency for five years has been dealt with as a problem of liquidity.”
NicD said:
“The disease that we’re facing in Greece at the moment is that a problem of insolvency for five years has been dealt with as a problem of liquidity.”
Neither of those symptoms are the actual problem, the root problem is that they don't, and never have, make enough money to support the lifestyle they've become accustomed to. You can't just wish away poverty, unfortunately.It is perfectly true though that lending more money to a person, company, or country who's already deeply in debt will never solve their problem, but (as I've said before) I don't think that the original bailout was intended to help Greece, and it achieved the main objective of shifting debt from the lending institutions (who arguably couldn't afford the loss) to the EU taxpayer (who can).
NicD said:
Well the new Finance Minister seems to understand exactly the problem...
So did Labour's Liam Byrne.Byrne said:
There's no money left
Understanding what could and should have been done to prevent it, and how to fix it, are different matters. Ideology gets in the way sooner or later or all the time.NicD said:
Isn't that the definition of insolvency?
Insolvency is the result of spending more money than you have, the problem is not having enough money in the first place.It's like someone wanting nice things that they can't afford, so they max out their credit card then can't afford the repayments. Even if you write off the credit card debt it only puts them back to stage one, where they couldn't afford nice things, the only difference is that they now have a pile of rapidly depreciating shiny tat that they haven't had to pay for.
NicD said:
RYH64E said:
Neither of those symptoms are the actual problem, the root problem is that they don't, and never have, make enough money to support the lifestyle they've become accustomed to.
Isn't that the definition of insolvency?Greece will probably sue the EU for being sucked into the EU club.
no win no feeIf the long term EU dream of a federal Europe (wherever the boundaries may be) is to happen they may want to consider merging countries into regions as steps along that road.
For example on might put Italy, Spain and Portugal together and call that South Western European Region.
Put the UK and Eire together and make that the North Western region.
Germany could combine with Austria and become the German region and annex Belgium and Netherlands since they don't really seem to fit anywhere else.
Denmark, Sweden, Finland and the former Soviet countries around the Baltic could be the Northern Region.
Poland, Czech Republic, Slovakia and Hungary become the Eastern Region, possibly with Romania.
Slovenia, Croatia and the other candidate states in the East Adriatic area might make up an East Central region. We might call it a Yugo region.
Greece and Cyprus coul become the Eastern region joined by Turkey whose membership could, no doubt, be quickly approved to accommodate the idea.
That would leave Italy and France.
It's tempting to suggest Italy should be part of the Yugo area (along with Malta of course) but in some ways it makes more sense to connect it with France to form a Central Region. However if Italy did take on a leadership role in a South Central region the logical thing thereafter would be to partition France, shave off Alsace back to Germany and run a north/south split to allow Northern France to become part of the North Western region under the UK/Eire banner and the southern section to join with Spain/Portugal.
As time then passed the political combinations could be extended to combine the groupings further on the pasth to completing "One Europe".
It's a simple plan in concept. What could possibly go wrong?
For example on might put Italy, Spain and Portugal together and call that South Western European Region.
Put the UK and Eire together and make that the North Western region.
Germany could combine with Austria and become the German region and annex Belgium and Netherlands since they don't really seem to fit anywhere else.
Denmark, Sweden, Finland and the former Soviet countries around the Baltic could be the Northern Region.
Poland, Czech Republic, Slovakia and Hungary become the Eastern Region, possibly with Romania.
Slovenia, Croatia and the other candidate states in the East Adriatic area might make up an East Central region. We might call it a Yugo region.
Greece and Cyprus coul become the Eastern region joined by Turkey whose membership could, no doubt, be quickly approved to accommodate the idea.
That would leave Italy and France.
It's tempting to suggest Italy should be part of the Yugo area (along with Malta of course) but in some ways it makes more sense to connect it with France to form a Central Region. However if Italy did take on a leadership role in a South Central region the logical thing thereafter would be to partition France, shave off Alsace back to Germany and run a north/south split to allow Northern France to become part of the North Western region under the UK/Eire banner and the southern section to join with Spain/Portugal.
As time then passed the political combinations could be extended to combine the groupings further on the pasth to completing "One Europe".
It's a simple plan in concept. What could possibly go wrong?
I think there’s another issue rearing its head here; the outcome of the recent Greek elections. People power and democracy (well, votes).
What if http://www.bbc.co.uk/news/world-europe-31072139 Spain votes similarly?
Care to venture which massively indebted nation’s voters might be next?
The collective weight of dissatisfied voters (rightly or wrongly) would appear to me to have reached a potential tipping point whereby the fallout consequences could have massive global economic repercussions.
Or is it just me?
What if http://www.bbc.co.uk/news/world-europe-31072139 Spain votes similarly?
Care to venture which massively indebted nation’s voters might be next?
The collective weight of dissatisfied voters (rightly or wrongly) would appear to me to have reached a potential tipping point whereby the fallout consequences could have massive global economic repercussions.
Or is it just me?
QuantumTokoloshi said:
The look on the chaps face from the European Commission as he shook hands with Yanis, shirt untucked and the other hand in his pocket, priceless.RYH64E said:
NicD said:
Isn't that the definition of insolvency?
Insolvency is the result of spending more money than you have, the problem is not having enough money in the first place.It's like someone wanting nice things that they can't afford, so they max out their credit card then can't afford the repayments. Even if you write off the credit card debt it only puts them back to stage one, where they couldn't afford nice things, the only difference is that they now have a pile of rapidly depreciating shiny tat that they haven't had to pay for.
Surely insolvency is the result of spending more money than you have coming in/earn
So I will say it again, the new FM nailed it exactly.
jogon said:
QuantumTokoloshi said:
The look on the chaps face from the European Commission as he shook hands with Yanis, shirt untucked and the other hand in his pocket, priceless.NicD said:
sorry don't understand this reply at all.
Surely insolvency is the result of spending more money than you have coming in/earn
So I will say it again, the new FM nailed it exactly.
They've rejected austerity, they don't want to live within their means, they want to continue spending more money than they have coming in. The problem isn't that they're insolvent now, the problem is that they want to continue the spending that got them there in the first place. The only sustainable solution to their problem is a substantial increase in income, not more debt and not a debt write off. Or less spending, which they've rejected.Surely insolvency is the result of spending more money than you have coming in/earn
So I will say it again, the new FM nailed it exactly.
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