Is the end nigh for the Euro? [vol. 3]

[anonymous-user]

Mermaid said:

Christine Lagarde...would "probably not" mean the end of the euro...

Yep, very surprised by her choice of words. I suppose it's encouraging that they are not so deluded as to not be considering it.

[Steffan]

fblm said:

Mermaid said:

Christine Lagarde...would "probably not" mean the end of the euro...

Yep, very surprised by her choice of words. I suppose it's encouraging that they are not so deluded as to not be considering it.

Indeed.

To my mind, the EU is in a real quandary in this nonsense now, with most of the blame being the responsibility of  the EU alone. Draghi and Co and the supposedly experienced leaders of the EU should have seen the inevitability of this, with Greece visibly failing to make the necessary changes to stand even  a slight chance of any sort of recovery.  That fact that they did not and have not done so, speaks  volumes for the lack of  integrity and expertise that there clearly is in this supposed group of experts.

I regret to say that  I think the EU leaders may just try to push this on once again with yet more subsidy being thrown to Greece and yet more Billions wasted by the EU because the EU leaders cannot actually admit to or face the consequences of their own ineptitude. 

That might buy a little more time and the EU can easily afford this since the EU leaders control the printing presses. However the consequences and perception within the financial markets, of such an obviously ridiculous economic nonsense will cause seriously troubled times for both the Euro and the EU itself.

The comments on this thread have all begun to recognise the complete economic nonsense that this matter has now become and the reality that Greece simply cannot afford to remain within the Euro. It seems to me that the EU are going to have to face the consequences of their own utterly ludicrous attempts to sustain an economically unsustainable position. 

Even if the EU do dream up yet another way to hold this position temporarily the continuing visible economic failure of Greece is absolutely visible to see. Not long now I think

[Mermaid]

Steffan said:

...Even if the EU do dream up yet another way to hold this position temporarily the continuing visible economic failure of Greece is absolutely visible to see. Not long now I think

The ECB under Draghi or FIFA under Blatter?

[Walford]

Blatter to run ECB

[Steffan]

Mermaid said:

Steffan said:

...Even if the EU do dream up yet another way to hold this position temporarily the continuing visible economic failure of Greece is absolutely visible to see. Not long now I think

The ECB under Draghi or FIFA under Blatter?

Perhaps the real tragedy in this is the similarity of approach of the self serving Blatter and the self serving Eurocrats. I would hope that in consequence the time of both in power are limited. Time will tell. I cannot see how Greece can possibly continue within the Euro given the effect of socialist economic policies and obvious economic inadequacies in the Syriza government of Greece. I think change is coming to the EU because of the obvious weakness created by trying to maintain such a visibly ridiculous nonsense.

[slow_poke]

The end of Greece as a Euro country is not going to mean the end of the Euro - and yet this thread is seeming to concentrate sole and exclusively now on Greece's pickle.

Whatever happened to the rest of the PIIGS? They still falling apart of are they going to prove you wrong?

[Driller]

slow_poke said:

The end of Greece as a Euro country is not going to mean the end of the Euro - and yet this thread is seeming to concentrate sole and exclusively now on Greece's pickle.

Whatever happened to the rest of the PIIGS? They still falling apart of are they going to prove you wrong?

Indeed. Your analysis is spot on.

Steffan said:

Not long now I think

Keep going Steffan, you're bound to get it right one day

"Same time tomorrow lads?"

[Welshbeef]

slow_poke said:

The end of Greece as a Euro country is not going to mean the end of the Euro - and yet this thread is seeming to concentrate sole and exclusively now on Greece's pickle.

Whatever happened to the rest of the PIIGS? They still falling apart of are they going to prove you wrong?

Republic of Ireland now seem to be "ok" out of the fire so to speak but a very long way to go & they are considering joking the £ zone

[turbobloke]

Just had the first call ever received from a polling company regarding any EU matters of any kind - compared to several on domestic politics and domestic issues - and as a "shy Tory" I trust they know how to process my carefully considered responses within their model. It would be a shame if they got the wrong idea due to typical Tory shyness in surveys and the inevitable impact it has on responses. Can't wait for the next one

[Gargamel]

slow_poke said:

The end of Greece as a Euro country is not going to mean the end of the Euro - and yet this thread is seeming to concentrate sole and exclusively now on Greece's pickle.

Whatever happened to the rest of the PIIGS? They still falling apart of are they going to prove you wrong?

Even the Head of the IMF thinks that Grexit will have a significant impact on the Euro.

I agree the thread has become more focussed on the Greek situation, However Austria has also had a banking crisis (though more to do with CHF exchange rate)

Spain, Italy, Portugal, Ireland sill have significant debts and an economic cycle which is at odds with the Germans.
Germany is running a euro 6bn balance of trade surplus. Effectively taking money from the rest of the Euro zone into Germany, increasing its economic dominance. This is fine, provided the Germans are releasing that money back into the Eurozone Countries.

We have all seen the incredible lengths the Eurozone countries have had to go to to make the damm thing work, it shouldn't be like this. It was designed to make Countries and economies converge. It has not had that effect.
The failing of the Euro are many, Unemployment being a prime issue especially in the Southern area.

Presently the Euro is injecting around 1trn Euros to try to achieve economic growth, or at least a bit of inflation.

I don't anticipate the end of the Euro anytime soon, but watching sticking plasters being applied to the cracks in the Euro is depressing, it is all so inefficient.

[LongQ]

Gargamel said:

It was designed to make Countries and economies converge. It has not had that effect.

Designed?

That word has certain some connotation with ideas of careful consideration of all round effects and, potentially, some thought given to maintenance over time.

I think "intended" would be a suitable replacement word.

If we accept "designed" then it would seem that the design was flawed and (or) the implementation was botched. In fact one would have to wonder if the design, being for a concept, hinged mostly on operational rules that were not marked out and communicated clearly during implementation. Thus the concept design was flawed in just the same way that weak concrete or substandard steel can affect engineering projects well within the expected lifetime of a structure.

[Gargamel]

In as much as there were criteria spelt out as a condition of joining, and i theory there is an Economic growth and stability pact, though of course with France, Germany and UK all in breach of that, there really is not much hope for convergence of economic cycles

[Andy Zarse]

Driller said:

slow_poke said:

The end of Greece as a Euro country is not going to mean the end of the Euro - and yet this thread is seeming to concentrate sole and exclusively now on Greece's pickle.

Whatever happened to the rest of the PIIGS? They still falling apart of are they going to prove you wrong?

Indeed. Your analysis is spot on.

Err... I suppose so if you ignore all the many thousands of posts over the last four years regarding the other distressed countries (let us call them the PIIS), the machinations of the ECB, EU corruption, figures being fiddled etc. Some of the PIIS have had a mild economic recovery, such as Spain and Ireland, although their national balance sheets remain trashed. Others, such as Italy and Portugal have had little or no recovery. Indeed their economies are both smaller than when they joined the wretched single currency and one has to ask (and indeed the question is often posited here) what was the bloody point in joining in the first place?

[anonymous-user]

Andy Zarse said:

Err... I suppose so if you ignore all the many thousands of posts over the last four years regarding the other distressed countries (let us call them the PIIS), the machinations of the ECB, EU corruption, figures being fiddled etc. Some of the PIIS have had a mild economic recovery, such as Spain and Ireland, although their national balance sheets remain trashed. Others, such as Italy and Portugal have had little or no recovery. Indeed their economies are both smaller than when they joined the wretched single currency and one has to ask (and indeed the question is often posited here) what was the bloody point in joining in the first place?

Andy is right, unsurprisingly, given the number of posters and their varying areas of expertise and interest, there is scarcely a country, opinion or prediction that hasn't been raised at least once!

[Quarterly]

This might be a good moment for me to ask a question.

Would it be possible to save the Euro by letting Greece default on its loans, but stay in the Euro? They could continue to use the euro, but obviously no one would lend them anything. Could that happen?

[Gargamel]

Quarterly said:

This might be a good moment for me to ask a question.

Would it be possible to save the Euro by letting Greece default on its loans, but stay in the Euro? They could continue to use the euro, but obviously no one would lend them anything. Could that happen?

It could happen in theory yes.

a few problems though

What would make Italy or Portugal want to carry on paying back there bailouts (or Ireland for that matter)

Secondly, with a Socialist government in power, and no economic reform on the horizon, then Greece is still unable to pay its way even without the debt. So it would need further funding simply to meet its future state obligations.

Third - The IMF won't I think even consider writing off loans, Europe is one thing, but owing around 90bn to the IMF is a whole other thing. The IMF is the lender of last resort, and they will want there money out. Since they lend to far riskier places than Greece.

I agree though they can remain in the Euro, but what they really need is an almost complete recapitalisation. But they aslo need very significant economic reform. (Sack some Cleaners !)

[Mrr T]

Gargamel said:

Quarterly said:

This might be a good moment for me to ask a question.

Would it be possible to save the Euro by letting Greece default on its loans, but stay in the Euro? They could continue to use the euro, but obviously no one would lend them anything. Could that happen?

It could happen in theory yes.

a few problems though

What would make Italy or Portugal want to carry on paying back there bailouts (or Ireland for that matter)

Secondly, with a Socialist government in power, and no economic reform on the horizon, then Greece is still unable to pay its way even without the debt. So it would need further funding simply to meet its future state obligations.

Third - The IMF won't I think even consider writing off loans, Europe is one thing, but owing around 90bn to the IMF is a whole other thing. The IMF is the lender of last resort, and they will want there money out. Since they lend to far riskier places than Greece.

I agree though they can remain in the Euro, but what they really need is an almost complete recapitalisation. But they aslo need very significant economic reform. (Sack some Cleaners !)

I would disagree that the IMF lend to higher risk credits. In terms of size, lack of commitment to reform, inability to devalue, I think the Greek loans are the highest risk the IMF have ever undertaken.

[gruffalo]

And so in this week that is seen by many as a crunch week Greece decides that attack is the best for of defense by attacking the IMF and EU by their PM saying in an article in the Le Monde paper "a new European power is being constructed", a "technocratic monstrosity" with Greece as its first victim, based on "harsh punishment and mandatory austerity".

[Steffan]

gruffalo said:

And so in this week that is seen by many as a crunch week Greece decides that attack is the best for of defense by attacking the IMF and EU by their PM saying in an article in the Le Monde paper "a new European power is being constructed", a "technocratic monstrosity" with Greece as its first victim, based on "harsh punishment and mandatory austerity".

It has surely been apparent for some time that the Syriza government have been looking for someone to blame for this mess, as tyeir orimary purpose, whilst whilst cheerfully avoiding undertaking any sensible economic reforms, preferring to play silly games with their country and blame the EU for the failure of Greece. Socialism at its least attractive worst.

I cannot see how the EU can continue to subsidise Greece time after time when Greece has made to improvements economically over the last five years and Syriza are clearly committed to sening more and more money that the have not actually got to spend.

The EU lost control of this nonsense solution some years ago. Ramping up more and more lending (or throwing away more like) to such a visibly insolvent nation and pretending all is well, simply cannot continue, I would suggest. Even if the EU does knuckle under, once again, and continue to throw good money after bad into Greece this will only buy a few weeks of respite for Greece, because the reality is that Greece simply cannot achieve a sufficiently strong economy to remain within the EU. Yet more billions of Euros will be needed by Greece as each month comes along . Not a credible approach given the five years aready wasted proving that Greece is a hopess case. Unpleasant, yes. But politics must involve difficult decisions.

As many other contributors on here have commented there really is no sense in these continued extended nonsense solutions. Greece has not recovered, economically and Greece will not recover, economically. The EU will reduce their overall political standing, steadily, if the EU continue to bail out Greece, because there is absolutey no longer any realistic prospect of any recovery by Greece. But the EU have been playing this wrong for some time and the EU overriding policy with difficulties seems to be keep pushing difficult decisions onto someone elses shift. On balance I think that the EU will cease bailing out Greece. If they continue then it will only push the problem away for literally weeks at best. Greece cannot afford to remain within the EU. Reality time is coming, to EU politics, I sincerely hope.

[TA14]

Steffan said:

only push the problem away for literally weeks at best.

This is the bit that I struggle with. Greece recently had to effectively borrow from the IMF to make a payment to the IMF. Even if they agree a deal with the EU to release the remaining E7bn, they still need to pay E17bn in the next twelve weeks but they don't appear to have any money http://www.bbc.co.uk/news/business-32970661