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

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

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Discussion

Steffan

10,362 posts

227 months

Monday 6th July 2015
quotequote all
rovermorris999 said:
Dear Socialists,

This is what happens when you take belief in the magic money tree to its logical conclusion. Please learn from this and stop bleating when Osborne starts seriously chipping away at the deficit.

Yours sincerely

The Real World
Nice to see someone is up bright and early? You are right on the button with your socialism comments. The fantasy inherent in the spend, spend, spend nonsense in modern socialism destroys economies. The no one ever needs to pay for anything philiosophy and running hopelessly unsustainable budgets with massive unaffordable pensions and a grossly overblown public sector is typified by socialist governments generally, (eg France) and the problems of Greece currently. Maintaining a stable economy is one of the primary functions of government and all governments need to be aware of this requirement and ought to run balanced budgets.

Greece being the current classic example of the inevitable consequences. The ability to blane everyone else for the mistakes of government, as currently typified by Greece, is deeply disturbing and results in exactly what is happening to the economy of Greece. I am waiting to see just what the EU can actually suggest as a panacea to this nonsense. Inevitably, it seems to me,Greece will default.

Hollande and his socialist cohorts will maintain Greece can be saved because they are all following exactly the same economic madness currently. But reality time is coming to this nonsense with the recognition from the IMF that Greece requires massive further and immediate, debt write offs and decades of forebearance on both interest and debt repayments from the Creditrs of Greece. No other actions will reduce the debt to manageable proportions?

We must not forget that there are a significant number of economically, very weak failing states, currently stiil struggling within the EU. Contagion is going to become the real bugbear, for the EU, if Greece is specially favoured with more and more subsidy and no reality checks. If this fantasy land philiosophy is allowed to continued by the EU there will be major ructions in the other failing states, who will all require equal treatment.

For that reason I cannot see how the EU can hope to continue with this mess. It's going to be a very interesting period in watching the consequences of decades of overspending and self serving and ineffective government within Europe, arriving at the inevitable unsolvable economic probems this has pathetic nonsense has created. I do not believe that the the EU can meet those challenges.



Edited by Steffan on Monday 6th July 07:51

AJS-

15,366 posts

235 months

Monday 6th July 2015
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CrutyRammers said:
anonymous said:
[redacted]
In fairness though, with the modern interpretation of "democracy" as it is, ordinary people are so far removed from the reality of what is going on I'm not sure you can blame them. Even if they could all read up on economics and understand the implications, it's not like they have a lot of choices on offer. It's the same here, "we" voted for a decade of labour and how many people could see what was going on under the bonnet? Almost nobody, certainly not the man on the clapham omnibus.
I don't think it's right blaming the greek people - we've only avoided the same situation through luck, really, not because "we" have made better choices.
The real "luck" was not joining the Euro, which was based entirley on our irrational patriotic attachment to the pound, and seriously jeopardising our economic future, so we were told.

Stig

11,817 posts

283 months

Monday 6th July 2015
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Mermaid said:
Euro weaker by about 0.8% against the GBP. 1.414.

Had weakened to 1.43 on announcement of the referendum a week ago.
Back to 1.407 this morning. Markets have this all factored in methinks?

Stig

11,817 posts

283 months

Monday 6th July 2015
quotequote all
thainy77 said:
Varoufakis resigned? it was on the BBC website as breaking news but has disappeared now.

Perhaps don't label Euro ministers as terrorists?
Indeed - and here's the reason for the resignation:

Yanis Varoufakis said he had been "made aware" some members of the eurozone did not want him at the meetings of finance ministers.

He quit as the leaders of France and Germany prepared to hold emergency talks, adding: "I shall wear the creditors' loathing with pride."


- So any further negotiations will be with a 'new' minister, whoever that might be? Euro placed Technocrat perchance? wink

Leithen

10,798 posts

266 months

Monday 6th July 2015
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fblm said:
tumble dryer said:
Leithen said:
...
I've never understood the reluctance to countenance exit from the Euro. How else can the currency protect itself from being fundamentally undermined by situations like this?
Good point.
Because a successful exit will pave the way for others, which will be the end of ever closer union of the EU. Don't forget it was envisaged from the very beginning that monetary union was only the beginning and that crisis would drive fiscal union. The reluctance is political not economic.
It seems obvious that for closer EU union to work, those countries that are unsuitable for such union are encouraged to step outside the tent. This is where the Euro experiment has gone so wrong. The cart has gone before the horse - the core countries who want such Union ought to take it to the logical conclusion or extreme, prove it works and then carefully admit further members stage by stage.

Which of course will never happen.

If the Euro is to stand a chance of surviving, Greece has to be cut free now. The risks of others following ought to be seen as a positive test of commitment rather than disaster.

Gargamel

14,957 posts

260 months

Monday 6th July 2015
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jogon said:
Dave only managed to waste £375 billion protecting our precious financial institutions..

http://youtu.be/4l06RhFoLE4
Sorry what ? Is this the first revisionist history from the left wing in this country for what happened to RBS and Northern Rock, you know the two financial institutions that were bailed out by GORDON BROWN.

This kind of moronic commentary about QE totally fails to explain what happens to currency markets during QE, and why that was important in context with what was happening to the $

The money wasn't wasted, it has lead directly to an economy that has put on more than a million jobs, grown at broadly 2% per annum since 2010, has more people employed than ever before and generally given how bad things could have been has maintained its position as the world fifth largest economy.

We might all have preferred tax cuts to personal allowances (though we got some of those anyway) but the fact it is was the recapitalisation of the banks that needed to happen, especially as the Government were asking them to repair their balance sheets and improve capital cover ratios.

Just a film with all kinds of wrong in it.

QuantumTokoloshi

4,161 posts

216 months

Monday 6th July 2015
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The autocratic EU nature is now being exposed, due to the Greek temerity of actually having a referendum. I bet they are looking at a way of having another referendum, to ensure the correct vote is returned this time, worked in Ireland and the Netherlands.

Schulz told German daily Handelsblatt that the elected Syriza government should be replaced by “technocrat” government until stability is restored.

"We should appoint governments of technocrats,” Martin Schulz told Handelsblatt.

I did not know "technocrat" actually meant EU stooge.

Edited by QuantumTokoloshi on Monday 6th July 08:54

Quarterly

650 posts

117 months

Monday 6th July 2015
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Won't the EU (Germany biggrin ) just have to wait a couple of weeks until the food has run out in Greece and then offer another referendum?

andy-xr

13,204 posts

203 months

Monday 6th July 2015
quotequote all
Leithen said:
It seems obvious that for closer EU union to work, those countries that are unsuitable for such union are encouraged to step outside the tent. This is where the Euro experiment has gone so wrong. The cart has gone before the horse - the core countries who want such Union ought to take it to the logical conclusion or extreme, prove it works and then carefully admit further members stage by stage.

Which of course will never happen.

If the Euro is to stand a chance of surviving, Greece has to be cut free now. The risks of others following ought to be seen as a positive test of commitment rather than disaster.
I'm getting more and more round to the thinking that Greece has to stay. What the referendum and the result has done is taken this from a numbers and finance position into a very personal 'people' thing. The Greeks have really really played this one well, and who doesnt like an underdog. The problem is, they're in the st

None of the finance ministers or heads of countries want to be the one who gives the thumbs down sign when the others are looking at them for what to do. They cant afford it politically, they'll get murdered in their elections. If for example Spain's PM says 'fk 'em, let them rot' they'll open themselves up to their local opposition completely taking them apart.

I get that if it's purely a numbers conversation, the numbers dont stack up. What Greece have done is really good gamesmanship, and it's taken the conversation away from just numbers and moved it on.

I think they'll get bailed out, or they'll run a parallel currency that's pegged to the Euro for 3-5 years that has some massive EU investment, then they come back in again. I dont think they'll be out for good, cut free, set loose, yer-on-yer-own, as no-one politically could chance it and the way Greece have baited it seems to be that it's going to be the EC/IMF's choice of whether they stay or go

Blib

43,789 posts

196 months

Monday 6th July 2015
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Then, fiscal recklessness would have won out.

Leithen

10,798 posts

266 months

Monday 6th July 2015
quotequote all
andy-xr said:
I'm getting more and more round to the thinking that Greece has to stay. What the referendum and the result has done is taken this from a numbers and finance position into a very personal 'people' thing. The Greeks have really really played this one well, and who doesnt like an underdog. The problem is, they're in the st

None of the finance ministers or heads of countries want to be the one who gives the thumbs down sign when the others are looking at them for what to do. They cant afford it politically, they'll get murdered in their elections. If for example Spain's PM says 'fk 'em, let them rot' they'll open themselves up to their local opposition completely taking them apart.

I get that if it's purely a numbers conversation, the numbers dont stack up. What Greece have done is really good gamesmanship, and it's taken the conversation away from just numbers and moved it on.

I think they'll get bailed out, or they'll run a parallel currency that's pegged to the Euro for 3-5 years that has some massive EU investment, then they come back in again. I dont think they'll be out for good, cut free, set loose, yer-on-yer-own, as no-one politically could chance it and the way Greece have baited it seems to be that it's going to be the EC/IMF's choice of whether they stay or go
You are most probably right.

I still believe however that both Greece and the EU would be far stronger in the medium to long term if they separated. The only way Greece can rebuild a solid economy IMO is with it's own currency. Yes there would be a lot of pain, but the EU countries could commit to support a new currency by buying debt in the medium term. A fudge will just perpetuate everything that is wrong at the moment.

The EU needs to grow up and accept that it's members have every right to walk away from the experiment if it's better for their country.

steveatesh

4,893 posts

163 months

Monday 6th July 2015
quotequote all
andy-xr said:
I'm getting more and more round to the thinking that Greece has to stay. What the referendum and the result has done is taken this from a numbers and finance position into a very personal 'people' thing. The Greeks have really really played this one well, and who doesnt like an underdog. The problem is, they're in the st

None of the finance ministers or heads of countries want to be the one who gives the thumbs down sign when the others are looking at them for what to do. They cant afford it politically, they'll get murdered in their elections. If for example Spain's PM says 'fk 'em, let them rot' they'll open themselves up to their local opposition completely taking them apart.

I get that if it's purely a numbers conversation, the numbers dont stack up. What Greece have done is really good gamesmanship, and it's taken the conversation away from just numbers and moved it on.

I think they'll get bailed out, or they'll run a parallel currency that's pegged to the Euro for 3-5 years that has some massive EU investment, then they come back in again. I dont think they'll be out for good, cut free, set loose, yer-on-yer-own, as no-one politically could chance it and the way Greece have baited it seems to be that it's going to be the EC/IMF's choice of whether they stay or go
Plus 1. The Politics will keep going in my opinion and the EU will find a way of keeping Greece in the Euro.
I also believe the resignation of the Greek Finance Minister was planned all along - isn't he a proponent of Game Theory and his resignation gives their PM a stronger negotiating hand?

Steffan

10,362 posts

227 months

Monday 6th July 2015
quotequote all
anonymous said:
[redacted]
Absolutely spot on and an excellent synopsis of the reality of the results of the last two uk elections. the UK electorate have seen the consequences or Labour governments first hand. Hence improvements in the wealth of the UK. Hopefully the current burial of Labour will continue.

On the Greek Ex financial leader Vourfakis resignation matter I do not think his outbursts of venom against the supposed beasts of the EU have any place within modern politics. Exceptionally clever economist but very much a loose cannon. What will be interesting to see is who replaces him in Greece? But very much a noisy loose cannon.

If a EU technocrat is parachuted in then I could understand the disquiet that such a change woukd bring about. But riding motorcycles and sporting a lovely woman on your arm in public in expensive restaurants in a country where huge queues are forming at banks is not clever.

cayman-black

12,624 posts

215 months

Monday 6th July 2015
quotequote all
All this will do ,is prove, Is the end nigh for the Euro? No chance its here to stay.

maffski

1,866 posts

158 months

Monday 6th July 2015
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Steffan said:
AreOut said:
Plan B - revert to forgery
I do realise you are making the point in dry humour. But I have thought for some time that if the wheel does come off on Greece remaining within the Euro there must be real possibility that the Greek presses will roll without authorisation from the ECB. I do hope this does not come to be. But I am very doubtful that any new solution will be found for Greece . Difficult times ahead for both the EU and Greece. I am at a loss to understand how Greece can seriously expect this to go on. But they clearly do and therefore is up to the EU to disavow Greece of that notion.
The paper for Euro notes all comes through the ECB - so in theory they could print some notes (with invalid serial numbers as they are allocated by the ECB), but they would run out of stock before it made any difference. I doubt any supplier would then be willing to sell to them against the ECB's wishes.

911Gary

4,162 posts

200 months

Monday 6th July 2015
quotequote all
Gargamel said:
Sorry what ? Is this the first revisionist history from the left wing in this country for what happened to RBS and Northern Rock, you know the two financial institutions that were bailed out by GORDON BROWN.

This kind of moronic commentary about QE totally fails to explain what happens to currency markets during QE, and why that was important in context with what was happening to the $

The money wasn't wasted, it has lead directly to an economy that has put on more than a million jobs, grown at broadly 2% per annum since 2010, has more people employed than ever before and generally given how bad things could have been has maintained its position as the world fifth largest economy.

We might all have preferred tax cuts to personal allowances (though we got some of those anyway) but the fact it is was the recapitalisation of the banks that needed to happen, especially as the Government were asking them to repair their balance sheets and improve capital cover ratios.

Just a film with all kinds of wrong in it.
Labour whose deregulation of banking practices effectively turned them into casinos,these blinkered forgetful lefties do make my P**s boil,left to them wed be (are) worse than Greece.Putting the children in charge of the sweetshop is never a good idea IMHO.

Cobnapint

8,596 posts

150 months

Monday 6th July 2015
quotequote all
Steffan said:
On the Greek Ex financial leader Vourfakis resignation matter I do not think his outbursts of venom against the supposed beasts of the EU have any place within modern politics. Exceptionally clever economist but very much a loose cannon. What will be interesting to see is who replaces him in Greece? But very much a noisy loose cannon.
A loose cannon of the highest order. And one that's just help throw Greece under a bus.

It's sad that a nation that once had such high standing in the world of mathematics, can't get it's head around the fact that there's no such thing as a free lunch.

Successive Greek governments have avoided collecting tax, and the people have been avoiding paying tax for years, and now it's finally caught up with them. But they still don't want to play ball.

I remember holiday in Crete many years ago when the holiday rep pointed out all the steel reinforcement rods deliberately being left sticking out the top of buildings so they could be classed as 'unfinished' and therefore not liable for tax - and that was back in 1982!

Old habits die hard.

911Gary

4,162 posts

200 months

Monday 6th July 2015
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Bit of perspective for the "Holier than thou brigade"

warp9

1,583 posts

196 months

Monday 6th July 2015
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Stig said:
Back to 1.407 this morning. Markets have this all factored in methinks?
I see this comment about 'markets have this factored in' mentioned quite often. Can someone explain what this actually means? Is it a psychological thing in that everyone can see the event coming so don't get too worried by it or are there actual monetary mechanisms in place?

Steffan

10,362 posts

227 months

Monday 6th July 2015
quotequote all
cayman-black said:
All this will do ,is prove, Is the end nigh for the Euro? No chance its here to stay.
Not in it's current state it won't. Major changes are coming to the EU. Publicly writing off the huge (in terms if the Greek economy) debts of Greece will be the first time the EU have had to do this. That in itself will cause fundamental changes in the accepting attitude of the EU electorate. Then there is the serious contagion effect on the other failing states currently within the EU.

Once one state drops out the carefully constructed appearance of a united centrally controlled economic union will be very seriously damaged. If another follows then the EU, in it's current form, will not continue. The UK referendum in 2016/2017 will bring about just that decision, I regret to say. I am highly doubtful that with significant Tory right wing support for exit and 4,000,000 voters from UKIP set agsinst membership, Cameron can actually deliver continuance within the EU. I personally support continuing membership. But this will be seen in the future as the start of truly fundamental changes in the EU.