Is the end nigh for the Euro? [vol. 2]
Discussion
The Germans like the idea of the EU. They like feeling they belong to this bigger ideal. Its a stability and security blanket to them. Germany is massively, inherently conservative. It doesnt like change, it doesnt like instability, it doesnt like insecurity and a stable, peaceful Europe where the Germans can get on with making money and building stuff in normality is their ideal. The EU in theory was meant to deliver that. The situation with Greece and the wider European wide media coverage of suddenly finding themselves accused of invading and dictating to Europe again has absolutely *horrified* them. The image of The Frau in jackboots from last autumn damn near gave Germany a collective heart-attack. As soon as this public sentiment was revealed Angie's future and in many ways the future of Greece and the Euro was sealed, the German people would not stand for the situation and they havent. The German bankers are now openly talking of Greece quitting the Euro, Angie has been told her dream of keeping it all together is dead. The Germans have called it.
http://www.bbc.co.uk/news/world-europe-18046280
http://www.bbc.co.uk/news/world-europe-18046280
Latest from the BBC on the HBAT's:
http://www.bbc.co.uk/news/world-europe-18046280
Suggests clear and vocal concern expressed within the EU central Bankers that the Greeks cannot continue within the Euro.
Quote from the article says:
"Without financial aid, there is the possibility that Greece will default."
Later in the body of the article we get:
"We're a breath away from the drachma and disaster," liberal Greek daily Kathimerini warned on Saturday, referring to the country's old currency.
Per Jansson, deputy head of Sweden's central bank, was quoted by Bloomberg as saying on Friday that central bankers across Europe had begun discussing the possibility of a Greek exit from the eurozone and how to handle the consequences.
"I would be very careful in speculating that it would be a painless process without complications," he said in Stockholm."
I find this interesting and very probably the start of the process that the EU is entering to allow the Greeks a reasonably stable default. The Greek elections have resulted in a heavy swing to the non continuance of Austerity measures political parties in Greece and have created a situation where Greece is becoming ungovernable within the Euro.
No party has yet been able to form a government following the recent election, and the consensus is that the Greeks will have a second election which will further the anti Austerity vote and return of anti Austerity candidates. The EU cannot force Greece to continue within the Euro if the Greek Government is returned with an anti Austerity vote.
I think we are right on the point of the Greek default. I sincerely hope that the EU devises a structured default with as much political emollient applied to the security of the people of Greece and the security of Greece itself as can be applied.
We do NOT want real violence and disorder breaking out and destroying people, homes and property in Greece. The EU is big enough to prevent this if they could postpone Grand Standing and swanning about at the EU taxpayers expense for a while.
Unless a really calm clear egress process is organised for Greece, to default, in a structured and organised way, demonstrating a steady approach to the new position, there could be a real horror story.
And by any reasonable assessment that is what must be avoided. Sadly the lives of the people of Greece are in the balance here. This requires real statesmanship. Not something the EU has in any substance. I do hope that the EU politicians can get their snouts out of the trough, long enough, to deal with this properly.
http://www.bbc.co.uk/news/world-europe-18046280
Suggests clear and vocal concern expressed within the EU central Bankers that the Greeks cannot continue within the Euro.
Quote from the article says:
"Without financial aid, there is the possibility that Greece will default."
Later in the body of the article we get:
"We're a breath away from the drachma and disaster," liberal Greek daily Kathimerini warned on Saturday, referring to the country's old currency.
Per Jansson, deputy head of Sweden's central bank, was quoted by Bloomberg as saying on Friday that central bankers across Europe had begun discussing the possibility of a Greek exit from the eurozone and how to handle the consequences.
"I would be very careful in speculating that it would be a painless process without complications," he said in Stockholm."
I find this interesting and very probably the start of the process that the EU is entering to allow the Greeks a reasonably stable default. The Greek elections have resulted in a heavy swing to the non continuance of Austerity measures political parties in Greece and have created a situation where Greece is becoming ungovernable within the Euro.
No party has yet been able to form a government following the recent election, and the consensus is that the Greeks will have a second election which will further the anti Austerity vote and return of anti Austerity candidates. The EU cannot force Greece to continue within the Euro if the Greek Government is returned with an anti Austerity vote.
I think we are right on the point of the Greek default. I sincerely hope that the EU devises a structured default with as much political emollient applied to the security of the people of Greece and the security of Greece itself as can be applied.
We do NOT want real violence and disorder breaking out and destroying people, homes and property in Greece. The EU is big enough to prevent this if they could postpone Grand Standing and swanning about at the EU taxpayers expense for a while.
Unless a really calm clear egress process is organised for Greece, to default, in a structured and organised way, demonstrating a steady approach to the new position, there could be a real horror story.
And by any reasonable assessment that is what must be avoided. Sadly the lives of the people of Greece are in the balance here. This requires real statesmanship. Not something the EU has in any substance. I do hope that the EU politicians can get their snouts out of the trough, long enough, to deal with this properly.
Apologies to DJRC for posting the same link.
His points are well made. I do hope the EU and the push from Germany can save the Greeks from serious self harm with riotous assembly. That would solve nothing and harm a great many people.
The Greeks will be the first of many to default. I cannot see Spain or Portugal lasting given the depth of the cuts needed in an already dire economic situation. These debts are dead money and have been deal money for some time. Once Greece goes, which she clearly will, given the election results and the feeling if the Greek peoples, then the pressure will slide onto Portugal and Spain in that order.
Again I cannot see how either of these countries can sustain their economies within the Euro. I do think default is the answer.
The real humdinger will be Italy. I have spent years living in Tuscany until recently and I have found that Italy is a lovely country full of warm, genuine, delightful people.
But it is obvious to any observer that the country plays a game with taxation and paying anything to the government. The black economy is in an entirely different scale to anywhere else in industrialised Europe. I cannot see the Italians putting up with the level of Austerity needed to sustain Italy within the Euro.
But the consequences to the EU would be absolutely huge if Italy defaults. France and the French Banks would be literally brought to their knees. Every other EU country would have major problems including the UK because our Banks are major lenders to France and Italy.
Yet I cannot see how Italy can continue. Once the Greeks go I think all bets are off on the rest and we wait whist the financial world collapses about us and then regroups. It is going to be deeply traumatic and the biggest change in EU structure in 50 years.
His points are well made. I do hope the EU and the push from Germany can save the Greeks from serious self harm with riotous assembly. That would solve nothing and harm a great many people.
The Greeks will be the first of many to default. I cannot see Spain or Portugal lasting given the depth of the cuts needed in an already dire economic situation. These debts are dead money and have been deal money for some time. Once Greece goes, which she clearly will, given the election results and the feeling if the Greek peoples, then the pressure will slide onto Portugal and Spain in that order.
Again I cannot see how either of these countries can sustain their economies within the Euro. I do think default is the answer.
The real humdinger will be Italy. I have spent years living in Tuscany until recently and I have found that Italy is a lovely country full of warm, genuine, delightful people.
But it is obvious to any observer that the country plays a game with taxation and paying anything to the government. The black economy is in an entirely different scale to anywhere else in industrialised Europe. I cannot see the Italians putting up with the level of Austerity needed to sustain Italy within the Euro.
But the consequences to the EU would be absolutely huge if Italy defaults. France and the French Banks would be literally brought to their knees. Every other EU country would have major problems including the UK because our Banks are major lenders to France and Italy.
Yet I cannot see how Italy can continue. Once the Greeks go I think all bets are off on the rest and we wait whist the financial world collapses about us and then regroups. It is going to be deeply traumatic and the biggest change in EU structure in 50 years.
Steffan said:
..
The real humdinger will be Italy. I have spent years living in Tuscany until recently and I have found that Italy is a lovely country full of warm, genuine, delightful people.
But it is obvious to any observer that the country plays a game with taxation and paying anything to the government. The black economy is in an entirely different scale to anywhere else in industrialised Europe. I cannot see the Italians putting up with the level of Austerity needed to sustain Italy within the Euro.
.
No wonder the population is not so indebted, and it seems they do not have these mega house building projects.The real humdinger will be Italy. I have spent years living in Tuscany until recently and I have found that Italy is a lovely country full of warm, genuine, delightful people.
But it is obvious to any observer that the country plays a game with taxation and paying anything to the government. The black economy is in an entirely different scale to anywhere else in industrialised Europe. I cannot see the Italians putting up with the level of Austerity needed to sustain Italy within the Euro.
.
Italians - warm, genuine, delightful people - just like the Portuguese, the Irish, the Greeks, the Spanish. It is those pesty northerners who are cold, insincere & miserable.
& what about the French - they have one foot in the milk and one in the yogurt.
Mermaid said:
Steffan said:
..
The real humdinger will be Italy. I have spent years living in Tuscany until recently and I have found that Italy is a lovely country full of warm, genuine, delightful people.
But it is obvious to any observer that the country plays a game with taxation and paying anything to the government. The black economy is in an entirely different scale to anywhere else in industrialised Europe. I cannot see the Italians putting up with the level of Austerity needed to sustain Italy within the Euro.
.
No wonder the population is not so indebted, and it seems they do not have these mega house building projects.The real humdinger will be Italy. I have spent years living in Tuscany until recently and I have found that Italy is a lovely country full of warm, genuine, delightful people.
But it is obvious to any observer that the country plays a game with taxation and paying anything to the government. The black economy is in an entirely different scale to anywhere else in industrialised Europe. I cannot see the Italians putting up with the level of Austerity needed to sustain Italy within the Euro.
.
Italians - warm, genuine, delightful people - just like the Portuguese, the Irish, the Greeks, the Spanish. It is those pesty northerners who are cold, insincere & miserable.
& what about the French - they have one foot in the milk and one in the yogurt.
coyft said:
Steffan said:
The real humdinger will be Italy. I have spent years living in Tuscany until recently and I have found that Italy is a lovely country full of warm, genuine, delightful people.
But it is obvious to any observer that the country plays a game with taxation and paying anything to the government. The black economy is in an entirely different scale to anywhere else in industrialised Europe. I cannot see the Italians putting up with the level of Austerity needed to sustain Italy within the Euro.
You want to be in the club you have to play by the rules, that includes paying your tax. On the one hand people don't want austerity, on the other, they want to stay in the Euro. We'll see how the Italians feel, if and when Greece leaves the Euro. My bet is once they see what happens to the Greek economy they'll cling to the Euro for all they're worth. But it is obvious to any observer that the country plays a game with taxation and paying anything to the government. The black economy is in an entirely different scale to anywhere else in industrialised Europe. I cannot see the Italians putting up with the level of Austerity needed to sustain Italy within the Euro.
There will be huge consequences to Europe in this failure. Politically it is a complete disaster for the EU and the Euro. Instead if being able to strut about the worlds stage Grandstanding before millions, the incompetent EU politicians will be clearly seen for what they really are. Self serving idiots. And crap business managers: they have got it wrong totally and that will br apparent to all.
I think we will need to review our understanding of the operation of the EU in the future. This is a seismic change in direction, the EU treaty will not have been the strong solid foundation it was sold to EU electorate as being and there will be seismic consequences to the EU politically.
WE must remember that this complete mess, is purely the result of very bad economic management by the EU and HBAT's. There has been no tragic cataclysmic event, no horrifying tidal wave, or dreadful explosion wiping out whole countries.
Simply dreadful weak and ineffective control of the Banks and Finance throughout the EU and the HBAT's. All the regulators and politicians in all the countries have cheerfully taken the money and ignored the growing problems. This is entirely the fault of the EU and HBAT's. No natural disaster, no cosmic event. Just very very bad management and self serving decisions by self serving toads.
I am certain this fact will gradually dawn on the electorate and taxpayers across the EU. Major changes are bound to follow as the reality of the dishonesty and incompetence becomes vividly portrayed.
In the beginning it all seemed so sensible, no more European wars, let's start to integrate our economies.
Let's have common technical standards so that trade will be easier.
Let's have a common recognition of citizens' rights.
Let's integrate our monetary system.
Fundamentally it is an attempt at a "multicultural" society, mandated by those who do not have to deal with the "at street level" consequences.
Let's have common technical standards so that trade will be easier.
Let's have a common recognition of citizens' rights.
Let's integrate our monetary system.
Fundamentally it is an attempt at a "multicultural" society, mandated by those who do not have to deal with the "at street level" consequences.
I think the only reason the Greek default is taking so long is that the Eurocrats are afraid that it's going to go too well.
If Argentina is any yardstick (economy was tied to the dollar leading to a very similar situation) then the Greek economy will recover very strongly and quickly once it's able to float an exchange rate and become cheap in comparison to the rest of Europe.
The problem you then have is that exiting the Euro looks like a very good idea for Spain, Portugal and Ireland, possibly the Netherlands too, and that causes some big problems for Germany.
If Argentina is any yardstick (economy was tied to the dollar leading to a very similar situation) then the Greek economy will recover very strongly and quickly once it's able to float an exchange rate and become cheap in comparison to the rest of Europe.
The problem you then have is that exiting the Euro looks like a very good idea for Spain, Portugal and Ireland, possibly the Netherlands too, and that causes some big problems for Germany.
davepoth said:
The problem you then have is that exiting the Euro looks like a very good idea for Spain, Portugal and Ireland, possibly the Netherlands too, and that causes some big problems for Germany.
These though fly in the face of conventional political wisdom across Europe. The theory being a united Europe is more able to face competition from the emerging economies.
Theory and practice, are not always bedfellows.
I agree entirely, but that is the problem for the EU. Once the Greeks default the EU is hit by a double whammy. Firstly the strong, safe, EU is no longer strong and safe. Secondly there is a massive loss in the EU because in reality the EU stands to lose vastly more than the HBAT's.
The HBAT's see their all of their debt written off totally. Debt free they can rebuild. The EU loses Trillions of Euro's and had to bail out the ECB/ESF with Trillions more.
Not good is it? Especially for the EU. The defaulters will gain from default. Considerably
The HBAT's see their all of their debt written off totally. Debt free they can rebuild. The EU loses Trillions of Euro's and had to bail out the ECB/ESF with Trillions more.
Not good is it? Especially for the EU. The defaulters will gain from default. Considerably
Steffan said:
I agree entirely, but that is the problem for the EU. Once the Greeks default the EU is hit by a double whammy. Firstly the strong, safe, EU is no longer strong and safe. Secondly there is a massive loss in the EU because in reality the EU stands to lose vastly more than the HBAT's.
The HBAT's see their all of their debt written off totally. Debt free they can rebuild. The EU loses Trillions of Euro's and had to bail out the ECB/ESF with Trillions more.
Not good is it? Especially for the EU. The defaulters will gain from default. Considerably
Another consideration is the position of the Brussels Eurocrats and the EU Parliament, at which point of how many countries exit, will one, or both, be dissolved?The HBAT's see their all of their debt written off totally. Debt free they can rebuild. The EU loses Trillions of Euro's and had to bail out the ECB/ESF with Trillions more.
Not good is it? Especially for the EU. The defaulters will gain from default. Considerably
WhoseGeneration said:
Steffan said:
I agree entirely, but that is the problem for the EU. Once the Greeks default the EU is hit by a double whammy. Firstly the strong, safe, EU is no longer strong and safe. Secondly there is a massive loss in the EU because in reality the EU stands to lose vastly more than the HBAT's.
The HBAT's see their all of their debt written off totally. Debt free they can rebuild. The EU loses Trillions of Euro's and had to bail out the ECB/ESF with Trillions more.
Not good is it? Especially for the EU. The defaulters will gain from default. Considerably
Another consideration is the position of the Brussels Eurocrats and the EU Parliament, at which point of how many countries exit, will one, or both, be dissolved?The HBAT's see their all of their debt written off totally. Debt free they can rebuild. The EU loses Trillions of Euro's and had to bail out the ECB/ESF with Trillions more.
Not good is it? Especially for the EU. The defaulters will gain from default. Considerably
I still don't see how Greece can make an organised Euro exit.
It's likely any new currency will face rapid inflation through QE and adjusts to make labour levels competitive. How will they stop people using Euro day-to-day and setting up foreign currency accounts or accounts abroad that are denominated in Euro to preserve their spending power and savings? How will they stop people being paid in Euro and keeping it under the table? Currency transitions usually take years and countries usually move towards more stable currencies. How can Greece make this work?
It's likely any new currency will face rapid inflation through QE and adjusts to make labour levels competitive. How will they stop people using Euro day-to-day and setting up foreign currency accounts or accounts abroad that are denominated in Euro to preserve their spending power and savings? How will they stop people being paid in Euro and keeping it under the table? Currency transitions usually take years and countries usually move towards more stable currencies. How can Greece make this work?
speedy_thrills said:
I still don't see how Greece can make an organised Euro exit.
It's likely any new currency will face rapid inflation through QE and adjusts to make labour levels competitive. How will they stop people using Euro day-to-day and setting up foreign currency accounts or accounts abroad that are denominated in Euro to preserve their spending power and savings? How will they stop people being paid in Euro and keeping it under the table? Currency transitions usually take years and countries usually move towards more stable currencies. How can Greece make this work?
Most of the Greeks with any serious money have already moved it out of Greece, something like E200Bn in the last half of last year. Greece is a monumental mess & part of the cause and a large part of the reason its going to be so hard to fix is the endemic corruption of absolutely everybody evading taxes (even small ones!) at every possible opportunity. Its going to require an entire population to reverse its thinking about the necessary evil that is taxation.It's likely any new currency will face rapid inflation through QE and adjusts to make labour levels competitive. How will they stop people using Euro day-to-day and setting up foreign currency accounts or accounts abroad that are denominated in Euro to preserve their spending power and savings? How will they stop people being paid in Euro and keeping it under the table? Currency transitions usually take years and countries usually move towards more stable currencies. How can Greece make this work?
Wombat3 said:
speedy_thrills said:
I still don't see how Greece can make an organised Euro exit.
It's likely any new currency will face rapid inflation through QE and adjusts to make labour levels competitive. How will they stop people using Euro day-to-day and setting up foreign currency accounts or accounts abroad that are denominated in Euro to preserve their spending power and savings? How will they stop people being paid in Euro and keeping it under the table? Currency transitions usually take years and countries usually move towards more stable currencies. How can Greece make this work?
Most of the Greeks with any serious money have already moved it out of Greece, something like E200Bn in the last half of last year. Greece is a monumental mess & part of the cause and a large part of the reason its going to be so hard to fix is the endemic corruption of absolutely everybody evading taxes (even small ones!) at every possible opportunity. Its going to require an entire population to reverse its thinking about the necessary evil that is taxation.It's likely any new currency will face rapid inflation through QE and adjusts to make labour levels competitive. How will they stop people using Euro day-to-day and setting up foreign currency accounts or accounts abroad that are denominated in Euro to preserve their spending power and savings? How will they stop people being paid in Euro and keeping it under the table? Currency transitions usually take years and countries usually move towards more stable currencies. How can Greece make this work?
What I think we would see to start with is a deposit freeze, and all funds in banks would be redenominated to Drachma. From that day until the Drachma starts hitting the street, the banks will exchange your electronic Drachma for real Euros at whatever the current exchange rate is. For a couple of weeks that will be a disaster as the exchange rate goes mad, but it will quickly find a level.
davepoth said:
If someone was in a real rush to do it, and had already pre-prepared the printing plates and watermark moulds for the banknotes, you could have the first notes (high denomination first since you can get a lot of value out quickly) in a few weeks. With all the big banknote houses in Europe on the case (Greece has its own national press, but as you might imagine, it's a bit crap) you could probably get the whole lot done inside three months. It's possible they've already got some paper ready to start the presses on.
What I think we would see to start with is a deposit freeze, and all funds in banks would be redenominated to Drachma. From that day until the Drachma starts hitting the street, the banks will exchange your electronic Drachma for real Euros at whatever the current exchange rate is. For a couple of weeks that will be a disaster as the exchange rate goes mad, but it will quickly find a level.
As above, much of the serious money has gone - lots of new Greek property owners in London & New York etcWhat I think we would see to start with is a deposit freeze, and all funds in banks would be redenominated to Drachma. From that day until the Drachma starts hitting the street, the banks will exchange your electronic Drachma for real Euros at whatever the current exchange rate is. For a couple of weeks that will be a disaster as the exchange rate goes mad, but it will quickly find a level.
Wombat3 said:
As above, much of the serious money has gone - lots of new Greek property owners in London & New York etc
And I'd think most of the "normal" Greeks have got as much money as they can stuffed under the mattress. This default is going to be the worst sovereign default the world has seen because they've drawn it out so long,that everything that's not bolted down has been taken out of the country. Gassing Station | News, Politics & Economics | Top of Page | What's New | My Stuff