Is the end nigh for the Euro? [vol. 2]
Discussion
Mikeyboy said:
The problem with Spain has been that even before the Euro the labour market was stuck in the 50's, maybe the 70s at best. You had to know people to even get a job and you had to know the right people in that company to get a job that was half decent and had any prospects.
Portugal is just the same, remembering a story a mate told me years ago. He is Portuguese, and been living/working in the UK for 15 years or so, working in IT at a high technical level (ie. not a helpdesk gimp, responsible for the designing internal network for EMEA) for a big (blue) player in the IT world. He applied for a job in the same organisation, in Portugal, wanting to move his family/be closer to his ageing mum.They knocked him back as he didn't have a degree, and more importantly, he didn't know the right people (any infact) in the local office. His skills, experience, being able to speak 3 languages didn't rate to them. Even that he was Portuguese at birth, they viewed him as an outsider, and as such shut the door to him.
He moved back to Portugal in 2008, when he had a role that he could work from home, with his English wife and kids. He ended up getting so pissed off with his contryman, it only lasted 6 months, the key factor being problems with the kids and schools, and the attitude of people (racism) to his non Portuguse family. Before he had rose tinted glasses of his country, after living back there, his view was, screw them, let them rot. Although a proud Portuguese, he defiantly now considers UK is his home.
Mermaid said:
Merkel says "allowing" Greek default would have uncontrollable consequences.
Global events are non-linear.Had Gavrilo Princip not wanted a sandwich from Moritz Schiller's cafe, the 20th century could have unfolded very differently.
Angie only knows she is playing economic Jenga, no-one knows which block will be the tipping point.
She also implies control,wrongly.
Euro crisis averted? Don’t believe a word of it
Greece may be clinging on, but the eurozone’s real problems remain resolutely unaddressed.
Telegraph Blog
Greece may be clinging on, but the eurozone’s real problems remain resolutely unaddressed.
Telegraph Blog
Jeremy Warner in Telegraph said:
There’s nothing like the long Christmas break for calming things down. Back in early December, it looked as if the euro was on its last legs. Then everyone went on holiday, and by the time they got back, seemed quite to have forgotten what they were originally panicking about.
No one honestly believes the eurozone crisis has been vanquished, but since early January there has been a lull in the storm and even a sense of beginning to get on top of things. The European Central Bank’s promise of unlimited liquidity for the stricken banking system seems to be turning things around. Successful resolution of the Greek debt talks yesterday has added to the impression of a crisis in retreat. (UPDATE: I spoke too soon in describing the Greek debt talks as successfully resolved. The Greeks agreed, then after going to press, eurozone leaders demanded fresh conditions. I'll be blogging on this later)
Regrettably, it’s a view which is almost certainly wrong, both in political and economic terms. The ECB’s actions have bought time, but haven’t addressed the causes of the crisis. The problem of widely divergent competitiveness uncorrected by free-floating exchange rates remains exactly the same as before.
Berlin’s answer is to attempt to impose its own economic model on the rest of Europe, in the hope that once others are made as virtuous and competitive as Germany, the problem will go away. Even Germany privately acknowledges that there will always be imbalances within the eurozone, but if they can just be made less extreme, then Germans could perhaps be persuaded to sign up to some form of debt collectivisation, or transfer union, that might resolve matters. For the moment, markets seem to be buying this message.
Fiscal discipline and structural reform have therefore become the order of the day. Even Greece is being dragged into the 21st century. Restrictive labour laws are being dismantled, and the corrupt cronyism of the political and business class is being challenged as never before. Barriers to entry are being torn down.
All this should obviously have happened long before the euro came into being; Europe has been attempting to run before it has learnt to walk. Under the cosh of market stricture, necessary, modernising change is now brutally being forced on the eurozone’s deficit nations. Yet the fact remains that European economies remain a million miles away from the sort of convergence necessary for effective monetary union. What’s more, the breakneck speed with which Europe is now taking its medicine is proving economically disastrous. The latest data out of Greece show an economy in a state of almost total collapse, a death spiral of plunging output, multiplying bankruptcy and calamitous capital flight. For how much longer can Greece’s always tenuous grip on democracy survive such an onslaught? Support for established political parties is plummeting, and extreme forms of populism are on the rise.
Greece is often portrayed as a special case by the policy elite, some of whom now talk openly about the possibility of a Greek exit. The ECB’s actions, it is argued, have removed the “tail risk” of Greek default to the rest of the eurozone, so why not just let the Greeks go altogether? The patient has now been sufficiently anaesthetised to take the operation, so surgical removal should be comparatively simple, yes? Actually, no. However it is spun, any euro exit, even one as small as Greece, sets a potentially fatal precedent. Once Greece has gone, the markets will move remorselessly on to the next weakest link. And even if Greece does manage to cling on by its fingernails, default within the eurozone will surely soon have others clamouring for similar debt forgiveness.
In less extreme form, the same destructive dynamic of self-defeating austerity, collapsing growth and rising public indebtedness as has engulfed Greece is fast establishing itself in other parts of the eurozone periphery. For some countries, the euro has become a recipe for seemingly perpetual depression.
Remarkably, however, there is still quite limited recognition of these dangers within the eurozone itself. Most mainstream political opinion in the periphery has enthusiastically embraced the hair shirt as both necessary and, ultimately, the only viable way back to sustainable growth. In Italy and Spain, there’s not the same concern about loss of fiscal and democratic sovereignty as would be observed in Britain and other eurosceptic nations. For them, Europe offers escape from a troubled past.
The same may not be true of the eurozone core of France and Germany, where the struggle for the soul of Europe continues. The old question of whether it will be a European Germany or a German Europe remains unanswered. One thing that can safely be said is that it is not going to be a Gaullist one. France’s vision of what Europe should be is irredeemably lost. Few outside that country believe there’s a future for the French economic model. High levels of labour market protection and centralised control align France more with the troubled southern periphery than the disciplines of Berlin.
That’s why we are seeing the bizarre phenomenon of Angela Merkel’s CDU campaigning in a foreign country for Nicolas Sarkozy’s re-election. Mr Sarkozy is the only thing that stands between the rampant anti-Europeanism of Marine Le Pen on the one hand and the turn-back-the-clock socialism of François Hollande on the other. It would be a disaster for the fragile consensus around Mrs Merkel’s fiscal compact if President Sarkozy is ousted. Nobody believes Mr Hollande would stick to the reform agenda prescribed by Berlin. The eurozone crisis in retreat? Not a chance of it.
No one honestly believes the eurozone crisis has been vanquished, but since early January there has been a lull in the storm and even a sense of beginning to get on top of things. The European Central Bank’s promise of unlimited liquidity for the stricken banking system seems to be turning things around. Successful resolution of the Greek debt talks yesterday has added to the impression of a crisis in retreat. (UPDATE: I spoke too soon in describing the Greek debt talks as successfully resolved. The Greeks agreed, then after going to press, eurozone leaders demanded fresh conditions. I'll be blogging on this later)
Regrettably, it’s a view which is almost certainly wrong, both in political and economic terms. The ECB’s actions have bought time, but haven’t addressed the causes of the crisis. The problem of widely divergent competitiveness uncorrected by free-floating exchange rates remains exactly the same as before.
Berlin’s answer is to attempt to impose its own economic model on the rest of Europe, in the hope that once others are made as virtuous and competitive as Germany, the problem will go away. Even Germany privately acknowledges that there will always be imbalances within the eurozone, but if they can just be made less extreme, then Germans could perhaps be persuaded to sign up to some form of debt collectivisation, or transfer union, that might resolve matters. For the moment, markets seem to be buying this message.
Fiscal discipline and structural reform have therefore become the order of the day. Even Greece is being dragged into the 21st century. Restrictive labour laws are being dismantled, and the corrupt cronyism of the political and business class is being challenged as never before. Barriers to entry are being torn down.
All this should obviously have happened long before the euro came into being; Europe has been attempting to run before it has learnt to walk. Under the cosh of market stricture, necessary, modernising change is now brutally being forced on the eurozone’s deficit nations. Yet the fact remains that European economies remain a million miles away from the sort of convergence necessary for effective monetary union. What’s more, the breakneck speed with which Europe is now taking its medicine is proving economically disastrous. The latest data out of Greece show an economy in a state of almost total collapse, a death spiral of plunging output, multiplying bankruptcy and calamitous capital flight. For how much longer can Greece’s always tenuous grip on democracy survive such an onslaught? Support for established political parties is plummeting, and extreme forms of populism are on the rise.
Greece is often portrayed as a special case by the policy elite, some of whom now talk openly about the possibility of a Greek exit. The ECB’s actions, it is argued, have removed the “tail risk” of Greek default to the rest of the eurozone, so why not just let the Greeks go altogether? The patient has now been sufficiently anaesthetised to take the operation, so surgical removal should be comparatively simple, yes? Actually, no. However it is spun, any euro exit, even one as small as Greece, sets a potentially fatal precedent. Once Greece has gone, the markets will move remorselessly on to the next weakest link. And even if Greece does manage to cling on by its fingernails, default within the eurozone will surely soon have others clamouring for similar debt forgiveness.
In less extreme form, the same destructive dynamic of self-defeating austerity, collapsing growth and rising public indebtedness as has engulfed Greece is fast establishing itself in other parts of the eurozone periphery. For some countries, the euro has become a recipe for seemingly perpetual depression.
Remarkably, however, there is still quite limited recognition of these dangers within the eurozone itself. Most mainstream political opinion in the periphery has enthusiastically embraced the hair shirt as both necessary and, ultimately, the only viable way back to sustainable growth. In Italy and Spain, there’s not the same concern about loss of fiscal and democratic sovereignty as would be observed in Britain and other eurosceptic nations. For them, Europe offers escape from a troubled past.
The same may not be true of the eurozone core of France and Germany, where the struggle for the soul of Europe continues. The old question of whether it will be a European Germany or a German Europe remains unanswered. One thing that can safely be said is that it is not going to be a Gaullist one. France’s vision of what Europe should be is irredeemably lost. Few outside that country believe there’s a future for the French economic model. High levels of labour market protection and centralised control align France more with the troubled southern periphery than the disciplines of Berlin.
That’s why we are seeing the bizarre phenomenon of Angela Merkel’s CDU campaigning in a foreign country for Nicolas Sarkozy’s re-election. Mr Sarkozy is the only thing that stands between the rampant anti-Europeanism of Marine Le Pen on the one hand and the turn-back-the-clock socialism of François Hollande on the other. It would be a disaster for the fragile consensus around Mrs Merkel’s fiscal compact if President Sarkozy is ousted. Nobody believes Mr Hollande would stick to the reform agenda prescribed by Berlin. The eurozone crisis in retreat? Not a chance of it.
1point7bar said:
Global events are non-linear.
Had Gavrilo Princip not wanted a sandwich from Moritz Schiller's cafe, the 20th century could have unfolded very differently.
Angie only knows she is playing economic Jenga, no-one knows which block will be the tipping point.
She also implies control,wrongly.
Come on explain please! "Had Gavrilo Princip not wanted a sandwich from Moritz Schiller's cafe, the 20th century could have unfolded very differently."Had Gavrilo Princip not wanted a sandwich from Moritz Schiller's cafe, the 20th century could have unfolded very differently.
Angie only knows she is playing economic Jenga, no-one knows which block will be the tipping point.
She also implies control,wrongly.
I know I know Im stupid.
Archduke Ferdinand's chauffeur took a wrong turn and had to reverse slowly back,
stalling the engine next to the cafe. Gavrilo had taken part in a failed assassination attempt earlier that morning. By pure chance he was delivered a golden opportunity to match his means and motive.
Gavrilo was Serbian and his fanaticism snowballed to Austria-Hungary (allied to Germany) declaring war on Serbia (allied to GB,France,etc), otherwise named WW1.
stalling the engine next to the cafe. Gavrilo had taken part in a failed assassination attempt earlier that morning. By pure chance he was delivered a golden opportunity to match his means and motive.
Gavrilo was Serbian and his fanaticism snowballed to Austria-Hungary (allied to Germany) declaring war on Serbia (allied to GB,France,etc), otherwise named WW1.
zerohedge said:
Agreed Upon Greek Bailout "Unagreed" 24 Hours Later As LAOS Leader Changes Mind
http://www.zerohedge.com/news/agreed-upon-greek-ba...lol, germany hope that they will ask to leave the euro by giving them enough of a push?
and another http://blogs.telegraph.co.uk/finance/jeremywarner/...
Anyone waiting to collect on Greece out of the euro before 20th March?
Anyone waiting to collect on Greece out of the euro before 20th March?
1point7bar said:
Archduke Ferdinand's chauffeur took a wrong turn and had to reverse slowly back,
stalling the engine next to the cafe. Gavrilo had taken part in a failed assassination attempt earlier that morning. By pure chance he was delivered a golden opportunity to match his means and motive.
Gavrilo was Serbian and his fanaticism snowballed to Austria-Hungary (allied to Germany) declaring war on Serbia (allied to GB,France,etc), otherwise named WW1.
So it all started because someone shot a hungry ostrich for ordering the wrong sandwich?stalling the engine next to the cafe. Gavrilo had taken part in a failed assassination attempt earlier that morning. By pure chance he was delivered a golden opportunity to match his means and motive.
Gavrilo was Serbian and his fanaticism snowballed to Austria-Hungary (allied to Germany) declaring war on Serbia (allied to GB,France,etc), otherwise named WW1.
i can't see this working - even if greece and europe did agree on the new measures then the strikes/public anger would soon start and the agreement wouldn't get off the ground.
interestingly though, think about this.
They are arguing over cuts of around 300 million to get a loan of around 130 BILLION. Now, surely you can make cuts of a tiny amount to get the 130 BILLION. isn't it a bit like me saying to you "cut your expenditure next year by £100 and I will give you £10,000?"
interestingly though, think about this.
They are arguing over cuts of around 300 million to get a loan of around 130 BILLION. Now, surely you can make cuts of a tiny amount to get the 130 BILLION. isn't it a bit like me saying to you "cut your expenditure next year by £100 and I will give you £10,000?"
Andy Zarse said:
So it all started because someone shot a hungry ostrich for ordering the wrong sandwich?
How funny I just read that!!Sorry o/t
“I heard that it started when a bloke called Archie Duke shot an ostrich 'coz he was hungry.”
“I think you mean it started when the Archduke of Austria-Hungary got shot. But the real reason for the whole thing was that it was just too much effort not to have a war. You see, Baldrick, in order to prevent war in Europe two superblocs developed: us, the French and the Russians on one side, and the Germans and Austria-Hungary on the other. The idea was to have two vast opposing armies, each acting as the other's deterrent. That way there could never be a war."
"But ... this is a sort of a war ...?"
"Yes ... well, there was a tiny flaw in the plan. It was b
ks."Gary11 said:
Andy Zarse said:
So it all started because someone shot a hungry ostrich for ordering the wrong sandwich?
How funny I just read that!!Sorry o/t
“I heard that it started when a bloke called Archie Duke shot an ostrich 'coz he was hungry.”
“I think you mean it started when the Archduke of Austria-Hungary got shot. But the real reason for the whole thing was that it was just too much effort not to have a war. You see, Baldrick, in order to prevent war in Europe two superblocs developed: us, the French and the Russians on one side, and the Germans and Austria-Hungary on the other. The idea was to have two vast opposing armies, each acting as the other's deterrent. That way there could never be a war."
"But ... this is a sort of a war ...?"
"Yes ... well, there was a tiny flaw in the plan. It was b
ks."
"Security isn't a dirty word, Blackadder. Crevice is a dirty word....Leak is a positively disgusting word"
smack said:
Mikeyboy said:
The problem with Spain has been that even before the Euro the labour market was stuck in the 50's, maybe the 70s at best. You had to know people to even get a job and you had to know the right people in that company to get a job that was half decent and had any prospects.
Portugal is just the same, remembering a story a mate told me years ago. He is Portuguese, and been living/working in the UK for 15 years or so, working in IT at a high technical level (ie. not a helpdesk gimp, responsible for the designing internal network for EMEA) for a big (blue) player in the IT world. He applied for a job in the same organisation, in Portugal, wanting to move his family/be closer to his ageing mum.They knocked him back as he didn't have a degree, and more importantly, he didn't know the right people (any infact) in the local office. His skills, experience, being able to speak 3 languages didn't rate to them. Even that he was Portuguese at birth, they viewed him as an outsider, and as such shut the door to him.
He moved back to Portugal in 2008, when he had a role that he could work from home, with his English wife and kids. He ended up getting so pissed off with his contryman, it only lasted 6 months, the key factor being problems with the kids and schools, and the attitude of people (racism) to his non Portuguse family. Before he had rose tinted glasses of his country, after living back there, his view was, screw them, let them rot. Although a proud Portuguese, he defiantly now considers UK is his home.
the worm that turned, police want to arrest the IMF head man in greece lol
reuters said:
In a letter obtained by Reuters Friday, the Federation of Greek Police accused the officials of "...blackmail, covertly abolishing or eroding democracy and national sovereignty" and said one target of its warrants would be the IMF's top official for Greece, Poul Thomsen
Gassing Station | News, Politics & Economics | Top of Page | What's New | My Stuff