Is the end nigh for the Euro? [vol. 3]
Discussion
Steffan said:
Welshbeef said:
Did Greece take out the €280 billion debt with the ECB or did the ECB take it out directly ie they are liable as such Greece could choose to walk away with no legal liability
Worth doing it? What the worst that could happens?
Greece are responsible for the the whole of the €280 Billion Greece borrowed. The EU could in theory take legal action to recover their money. Greece cannot walk away with no liability. However the EU cannot in reality sue for the debts in Greece. IMO. This is a complex matter and I cannot think of any European country who have become actually insolvent. Court of Hague possibly? Worth doing it? What the worst that could happens?
Even if the EU actually obtained a judgement the reality would be that actually collecting any of the debts would be virtually impossible. There coud possibly be action against the Foreign investments that Greece may own which could possibly be siezed with appropriate court action. Embassies and the like if there are any owned by Greece outside Greece itself. In reality I think the dire straits that Greece would have sunk to by then would be so dire that serious concern over the plight of the population of Greece would take precedent over the importance of attempting recovery of debt.
But in theory Greece woud be legally liable for the debt. In reality it would not be worth the candle. The EU taxpayers woud pick up this bill as well: (just for a change)!
confused_buyer said:
RYH64E said:
Depends upon your definition of 'well'? The PH solution to Greece's problems is to exit the euro, revert to the Drachma, and let it devalue to restore competiveness. Isn't that what the eurozone as a whole are doing?
Yes, but it isn't the same effect. The Euro can do what it likes against the $, Yen, £ whatever but that has no effect on intra-euro trade. It doesn't make Greece more competetive against Germany or a cheaper place to holiday for a Dutch person than Spain.The problem with the euro has always been the differences between the economies of its members - not between the eurozone and the rest of the world.
Andy Zarse said:
confused_buyer said:
RYH64E said:
Depends upon your definition of 'well'? The PH solution to Greece's problems is to exit the euro, revert to the Drachma, and let it devalue to restore competiveness. Isn't that what the eurozone as a whole are doing?
Yes, but it isn't the same effect. The Euro can do what it likes against the $, Yen, £ whatever but that has no effect on intra-euro trade. It doesn't make Greece more competetive against Germany or a cheaper place to holiday for a Dutch person than Spain.The problem with the euro has always been the differences between the economies of its members - not between the eurozone and the rest of the world.
turbobloke said:
Andy Zarse said:
confused_buyer said:
RYH64E said:
Depends upon your definition of 'well'? The PH solution to Greece's problems is to exit the euro, revert to the Drachma, and let it devalue to restore competiveness. Isn't that what the eurozone as a whole are doing?
Yes, but it isn't the same effect. The Euro can do what it likes against the $, Yen, £ whatever but that has no effect on intra-euro trade. It doesn't make Greece more competetive against Germany or a cheaper place to holiday for a Dutch person than Spain.The problem with the euro has always been the differences between the economies of its members - not between the eurozone and the rest of the world.
Andy Zarse said:
I honestly believe you are completely wrong on this point, and I think this is because you mistakenly believe the Euro is a true currency, when it clearly is little more than a fixed exchange mechanism with a common bank note.
ERMlike lisbon treaty, same sh/t different name, they love that scam
.
confused_buyer said:
RYH64E said:
Depends upon your definition of 'well'? The PH solution to Greece's problems is to exit the euro, revert to the Drachma, and let it devalue to restore competiveness. Isn't that what the eurozone as a whole are doing?
Yes, but it isn't the same effect. The Euro can do what it likes against the $, Yen, £ whatever but that has no effect on intra-euro trade. It doesn't make Greece more competetive against Germany or a cheaper place to holiday for a Dutch person than Spain.The problem with the euro has always been the differences between the economies of its members - not between the eurozone and the rest of the world.
Andy Zarse said:
No. It's a very clear demonstration of why the Eurozone doesn't work. Some economies with strong productivity, such as Germany, Holland and surprisingly enough Spain, clearly need a stronger currency.
Why does Germany 'need' a stronger currency? Again using the example of Greece, many on here have argued that Germany has hugely benefitted from a euro that is weaker than it should be because countries like Greece are part of the eurozone, enabling them to have a booming economy without growth being stifled by a strong currency. I can see no downsides at all of a weak euro for Germany, except maybe that their factories might not be able to keep up with demand. Win win for an exporting country like Germany I'd have thought.RYH64E said:
Greece is now a more attractive holiday destination than Turkey even for those in the Eurozone...
You haven't been following the recent fortunes of the Turkish lira recently have you! Incidentally, I recently saw an interesting statistic about the Irish (via David McWilliams IIRC, Artoir will probably remember?). Apparently, 30,000 people flew from Dublin to Greece in 2014. However, 90,000 flew to Turkey. I think that stat tells its own story about relative competitiveness, and probably everything we need to know about Greece's prospects if remaining within the EZ.
Andy Zarse said:
You haven't been following the recent fortunes of the Turkish lira recently have you!
Incidentally, I recently saw an interesting statistic about the Irish (via David McWilliams IIRC, Artoir will probably remember?). Apparently, 30,000 people flew from Dublin to Greece in 2014. However, 90,000 flew to Turkey. I think that stat tells its own story about relative competitiveness, and probably everything we need to know about Greece's prospects if remaining within the EZ.
A straw poll of friends and acquaintances going on quick 'n' cheap holidays would lead me to believe the split would be similar throughout the UK. There are (even) still those blissfully ignorant as to how close some Turkish resorts are to ISIS territory.Incidentally, I recently saw an interesting statistic about the Irish (via David McWilliams IIRC, Artoir will probably remember?). Apparently, 30,000 people flew from Dublin to Greece in 2014. However, 90,000 flew to Turkey. I think that stat tells its own story about relative competitiveness, and probably everything we need to know about Greece's prospects if remaining within the EZ.
RYH64E said:
Why does Germany 'need' a stronger currency?
Do you understand the difference between needs and wants? They need a stronger currency for the good of greater Europe. But do they want one? I'd agree that's a big fat nein! (Except Herr "Hair Shirt" Schaubel, who's Calvinist soul, I would imagine, loves a strong currency)
Andy Zarse said:
RYH64E said:
Why does Germany 'need' a stronger currency?
Do you understand the difference between needs and wants? They need a stronger currency for the good of greater Europe. But do they want one? I'd agree that's a big fat nein! (Except Herr "Hair Shirt" Schaubel, who's Calvinist soul, I would imagine, loves a strong currency)
RYH64E said:
confused_buyer said:
RYH64E said:
Depends upon your definition of 'well'? The PH solution to Greece's problems is to exit the euro, revert to the Drachma, and let it devalue to restore competiveness. Isn't that what the eurozone as a whole are doing?
Yes, but it isn't the same effect. The Euro can do what it likes against the $, Yen, £ whatever but that has no effect on intra-euro trade. It doesn't make Greece more competetive against Germany or a cheaper place to holiday for a Dutch person than Spain.The problem with the euro has always been the differences between the economies of its members - not between the eurozone and the rest of the world.
And from what I hear, Greece isn't any less expensive than it was a few years ago, and isn't much of a place for a holiday right now. Other than its sunny of course.
Walford said:
But 10 years after leaving the Euro, it could be worth having a go at getting some cash back
I don't think 7 years after the Icelandic bank crash, the UK or The Netherlands are any closer to getting the billions spent bailing out their customers back. If Greece goes pop they are NEVER going to pay Any of their debts.Andy Zarse said:
You haven't been following the recent fortunes of the Turkish lira recently have you!
Incidentally, I recently saw an interesting statistic about the Irish (via David McWilliams IIRC, Artoir will probably remember?). Apparently, 30,000 people flew from Dublin to Greece in 2014. However, 90,000 flew to Turkey. I think that stat tells its own story about relative competitiveness, and probably everything we need to know about Greece's prospects if remaining within the EZ.
Incidentally, I recently saw an interesting statistic about the Irish (via David McWilliams IIRC, Artoir will probably remember?). Apparently, 30,000 people flew from Dublin to Greece in 2014. However, 90,000 flew to Turkey. I think that stat tells its own story about relative competitiveness, and probably everything we need to know about Greece's prospects if remaining within the EZ.
I had written a lengthy post yesterday but my browser crashed and I lost it. I'll attempt a brief summary;
On Saturday I was listening to Irish radio while out for a drive and they were reporting from the Sinn Fein annual conference. In attendance was Euclid Tsakalotos, Syriza's chief economist. I'll preface this by saying I find Syriza's/Sinn Fein's/Podemos' economic ideas questionable, but nonetheless like most Syriza higher ups, he talked a lot of sense.
He spoke of how the new government had gone into talks with the EU with high hopes of a solution to the crisis and to move things forward on a supranational level, economically and politically.
He told the crowd it was clear to see the current solution was no solution at all. Everyone knows it. There isn't a single indicator that even suggests it may be working. So he had arrived at the EU expecting to work on a new plan but instead was told "No. This is the way we are doing things and this is the way you will do things. End of discussion."
Sinn Fein are currently doing incredibly well in polls in the Republic. There's whispers of a SF government in 2016. The centenary of the Easter Rising. They are campaigning on an anti-austerity platform and after years of ineffective servitude (to the Troika, not the Irish people) on behalf of the main parties, they are doing very well. A parliamentary inquiry into the banking crisis has begun and it's only going to further damage the main opposition (who held power when it hit).
In the North, they are playing an incredibly shrewd game too. Adams has already said he wants Sinn Fein to be the biggest party, both North and South of the border. They continue to outmanoeuvre the Unionists at almost every turn (in fairness, they just set them up and watch them tear themselves apart - a gay couple is normally enough to do it).
Podemos and the 5 Star Movement got a mention at the conference too, by both SF people and Mr. Tsakalotos.
There seems to be a pretty fascinating shift happening here. While the fate of the recently inflated Right in Northern Europe remains to be seen, the Left seems to be on course to sweep across the Southern areas over the next few years.
Art0ir said:
There seems to be a pretty fascinating shift happening here. While the fate of the recently inflated Right in Northern Europe remains to be seen, the Left seems to be on course to sweep across the Southern areas over the next few years.
The problem with all the "anti-austerity" parties in small eurozone countries is that if you are using someone else's currency you have very limited room for manouver and can, and probably will, run out of it.Any of them which are running on a pro-euro but also wishing to spend more than they can raise ticket are either kidding themselves, the electorate or both.
As Greece have found out, it doesn't matter who you elect, they don't have the power to make the important decisions.
confused_buyer said:
The problem with all the "anti-austerity" parties in small eurozone countries is that if you are using someone else's currency you have very limited room for manouver and can, and probably will, run out of it.
Any of them which are running on a pro-euro but also wishing to spend more than they can raise ticket are either kidding themselves, the electorate or both.
As Greece have found out, it doesn't matter who you elect, they don't have the power to make the important decisions.
Agreed - For the small countries it is a kind of marginal protest vote, but you can see why the message of these parties is appealing. Essentially Free money, debts written off, everything back to pre crash and no consequences. I think this is why Syriza are getting such a shooing from the Eurocrats. Any of them which are running on a pro-euro but also wishing to spend more than they can raise ticket are either kidding themselves, the electorate or both.
As Greece have found out, it doesn't matter who you elect, they don't have the power to make the important decisions.
However - the game changer could be France. An anti EU party there or perhaps even in Spain could really kick of some internal carnage.
I am not confident that it will be politics that spell the end for the Euro, I still think it will be an unexpected turn of events, a real game changer.
No one really knows how much money Greece has left, they begged a further E500m on Friday, the state payroll needs to be paid on the 20th March, but it is absolutely clear they are down to looking for change behind the cushions.
RYH64E said:
Andy Zarse said:
RYH64E said:
Why does Germany 'need' a stronger currency?
Do you understand the difference between needs and wants? They need a stronger currency for the good of greater Europe. But do they want one? I'd agree that's a big fat nein! (Except Herr "Hair Shirt" Schaubel, who's Calvinist soul, I would imagine, loves a strong currency)
No. How is this so flippin' difficult?
From a global perspective, Germany very much does need a stronger currency. (Ask yourself where would the DM be now compared to the Italain Lira if they still existed).
From a selfishly Teutonic perspective, German industry does not by and large want a stronger currency.
From a Eurozone perspective, it is completely irrelevant since the matter was fixed in 1999, ignoring of course the inconvenient truth that the fixed exchange rate within trade block has destroyed the natural checks and balances of trading economies, wrecked peripheral EZ industry, brought untold poverty, a prolonged recession, and wreaked human misery and a humanitarian crisis in Greece. Other than that it has been marvellous.
Steffan said:
Greece are responsible for the the whole of the €280 Billion Greece borrowed. The EU could in theory take legal action to recover their money. Greece cannot walk away with no liability. However the EU cannot in reality sue for the debts in Greece. IMO. This is a complex matter and I cannot think of any European country who have become actually insolvent. Court of Hague possibly?
Even if the EU actually obtained a judgement the reality would be that actually collecting any of the debts would be virtually impossible. There coud possibly be action against the Foreign investments that Greece may own which could possibly be siezed with appropriate court action. Embassies and the like if there are any owned by Greece outside Greece itself. In reality I think the dire straits that Greece would have sunk to by then would be so dire that serious concern over the plight of the population of Greece would take precedent over the importance of attempting recovery of debt.
But in theory Greece woud be legally liable for the debt. In reality it would not be worth the candle. The EU taxpayers woud pick up this bill as well: (just for a change)!
You would not be able to make any claim against Greece because a country has sovereign immunity.Even if the EU actually obtained a judgement the reality would be that actually collecting any of the debts would be virtually impossible. There coud possibly be action against the Foreign investments that Greece may own which could possibly be siezed with appropriate court action. Embassies and the like if there are any owned by Greece outside Greece itself. In reality I think the dire straits that Greece would have sunk to by then would be so dire that serious concern over the plight of the population of Greece would take precedent over the importance of attempting recovery of debt.
But in theory Greece woud be legally liable for the debt. In reality it would not be worth the candle. The EU taxpayers woud pick up this bill as well: (just for a change)!
However, a complete refusal to repay anything is unusual since then Greece would never be able to re-enter the international bond market.
Normally at some time later Greece would offer some form of restructuring of the debt with I assume substantial write offs.
Its all very complex look up Argentina 2002 default hold out bonds.
confused_buyer said:
Art0ir said:
There seems to be a pretty fascinating shift happening here. While the fate of the recently inflated Right in Northern Europe remains to be seen, the Left seems to be on course to sweep across the Southern areas over the next few years.
The problem with all the "anti-austerity" parties in small eurozone countries is that if you are using someone else's currency you have very limited room for manouver and can, and probably will, run out of it.Any of them which are running on a pro-euro but also wishing to spend more than they can raise ticket are either kidding themselves, the electorate or both.
As Greece have found out, it doesn't matter who you elect, they don't have the power to make the important decisions.
Imagine what will happen when that changes.
Gassing Station | News, Politics & Economics | Top of Page | What's New | My Stuff