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

[Gargamel]

Interesting article on Italy, nothing new of course, and seasoned Euro watchers will know most of this.

http://www.telegraph.co.uk/business/2016/06/12/ita...

However

Total economic growth in Italy since 1999 = 3% thats TOTAL not annual average.

UK for contrast has grown 35% in that time, even including the 2008/9 corrections.

35% youth unemployment
130% debt to GDP
Bank sector holding near 20% of their debt portfolio on which they will never recover any money.

You could easily see an economic shock event (Brexit perhaps) tipping them over.

[Sam All]

Gargamel said:

Interesting article on Italy, nothing new of course, and seasoned Euro watchers will know most of this.

http://www.telegraph.co.uk/business/2016/06/12/ita...

Thanks for posting that.

[Digga]

I do think Brexit could trigger some very serious consequences - for both sterling and the euro. However, that is not anywhere near sufficient reason IMHO to avoid it, if you feel the medium to longer term fundamental issues for the UK are not better served by Brexit.

[Murph7355]

Gargamel said:

Interesting article on Italy, nothing new of course, and seasoned Euro watchers will know most of this.

http://www.telegraph.co.uk/business/2016/06/12/ita...

However

Total economic growth in Italy since 1999 = 3% thats TOTAL not annual average.

UK for contrast has grown 35% in that time, even including the 2008/9 corrections.

35% youth unemployment
130% debt to GDP
Bank sector holding near 20% of their debt portfolio on which they will never recover any money.

You could easily see an economic shock event (Brexit perhaps) tipping them over.

And yet they are typically in the top 5 net contributors to the EU.

Being a member is obviously very advantageous.

[Driller]

Gargamel said:

You could easily see an economic shock event (Brexit perhaps) tipping them over.

Your phrase above got me thinking, not about your phrase specifically, just in general.

We've talked about this kind of thing er several times now with Steffan surely being the winner for the multitude of versions of the above comment he manages to come out with and I think I've finally got the analogy (which will instantly have fault found with it of course!).

Consider one of the less fortunate/savoury sort in society. Someone who never works, spends their life and what little cash they have down the pub etc etc

Now in a "normal" world you could have a commentator saying "you could easily see an economic shock event tipping them over" or whatever. And every time they collapse into bed after another bender or refuse another job offer or interview you could say it. And in this world, eventually this person would starve to death.

But as we all know this is not how it works. These rules which could be considered obvious and reasonable cannot be applied and are indeed not relevant.

Because whatever happens the state is there to clean up the mess to give this person another chance another get out of jail free card.

Because somebody or some group somewhere has/have decided that this is the way it must be. And the system will always be changed and adapted so that this will always be the way.

I believe there is no more chance of these poorer EU countries being allowed to fail than there is of Dave on the estate and on the dole somewhere being allowed to starve to death.

[Mothersruin]

IMF?

[Digga]

Driller said:

I believe there is no more chance of these poorer EU countries being allowed to fail than there is of Dave on the estate and on the dole somewhere being allowed to starve to death.

For now, you're right, but for every nation that dodges the bullet, there are others - current examples being Argentina, Brazil, Zimbabwe - which do not and suffer the consequences of economic and political dysfunctionality.

[Driller]

Digga said:

Driller said:

I believe there is no more chance of these poorer EU countries being allowed to fail than there is of Dave on the estate and on the dole somewhere being allowed to starve to death.

For now, you're right

"I'm scared the sun is going to supernova and we'll all burn to death!"

"Look, the sun isn't going to supernova, ok?"

"For now!"

Digga said:

for every nation that dodges the bullet, there are others - current examples being Argentina, Brazil, Zimbabwe - which do not and suffer the consequences of economic and political dysfunctionality.

That's the "Is the end nigh for the world" thread you want...;)

Edited by Driller on Tuesday 14th June 12:21

[Digga]

I think there are very genuine concerns about Italian and French economies which are only now beginning to receive the scrutiny they deserve in the mainstream media. Irrespective of the UK vote this month, those could be the issues that trigger a major correction and potentially also a major change within the EU.

[Steffan]

Digga said:

I think there are very genuine concerns about Italian and French economies which are only now beginning to receive the scrutiny they deserve in the mainstream media. Irrespective of the UK vote this month, those could be the issues that trigger a major correction and potentially also a major change within the EU.

In my view that is an excellent summary of the reality of the gradual realisation that is beginning to dawn all over Europe of the inherent economic failings within the EU, that are not controlled and cannot be controlled, Digga! The really serious failings within the French, Italian, Spanish Portugese and the Greek economies, that the EU simply cannot either address or resolve in any way whatsoever, are going to become the real stumbling block which will trip up the QE gloss that the EU is relying upon as a temporary fudge, currently.

In direct consequence there is going to be a major change forced upon the EU, because trying to utilise QE money on that scale, to hde fundamental unrecverable losses, just will not wash! These problems are going to sink those countries and the EU cannot, prevent the falls.

Interestingly it seems to me that the Brexit camp are becoming considerable more hopeful of success and Remain under Cameron is having kittens. I believe that the Sun is now supporting Brexit? Still very tight IMO but the Remain impetus does seem to be seriously lowered? Continuing my entirely unscientific assessement of roadside and vehicle banners there definitely have been significantly more Brexit than Remain posters noted, in my survey.

All there to play for, only 10 days to go, what does everyone else think??

[Digga]

Steffan said:

All there to play for, only 10 days to go, what does everyone else think??

I don't know but the pro-Eu establishment, both in the UK and continental Europe are clearly rattled. I found the timing of this judgement intriguing: http://www.bbc.co.uk/news/uk-36526158

[Axionknight]

Steffan said:

I believe that the Sun is now supporting Brexit?

Quote snipped.

Yep.

https://www.thesun.co.uk/news/1277920/we-urge-our-...

[Steffan]

All building up just as it should!!

On the polls question useful summary from the Beeb:

http://www.bbc.co.uk/news/uk-politics-eu-referendu...

Certainly does suggest Brexit is gaining currently?

All there to play for!!

Definitely looks tighter but whatdoes everyone else think??

[Axionknight]

I will be voting to leave but I think remain will clinch it 54-46.

Predictions for later in the year:

Cameron gone as Tory leader and PM

A general election called after a vote of no confidence

Theresa May as the next Tory leader in an effort to try and unite the party as Gove and Johnson will be seen as being far too divisive.

[Gargamel]

Driller said:

I believe there is no more chance of these poorer EU countries being allowed to fail than there is of Dave on the estate and on the dole somewhere being allowed to starve to death.

See the problem I have with this approach is that it totally underplays who actually suffers in macro economic policy, and who pays the price, and what is the cost.

Italy won't stop being Italy, nor will it (to your point) totally collapse. I agree. But being tipped over the edge is figurative, there are degrees.

Look at Greece

Public sector workers unpaid
Medicine hard to source, and new life saving drugs not affordable
Not training new Doctors or Nurses
Pensions cut
Youth unemployment - therefore at some point a less skilled workforce
low innovation, so econmy remains uncompetitive, and employs less people
Less employment - so low wages

It is families, people and children that suffer, we can toss around GDP, Debt ratio's, interest rates, resuce funds and suchlike.

But it is ALWAYS the pooredt that suffer, low mortality, increased disease, more suicide, more mental health issues, more fundamental societal changes.

That is the real price of these economic decision.

Driller - I get you back the Euro, and feel it will survive, but should it, what is the price of that "success" it may suit the Burghers of Dusseldorf, but how is it working in Pisa, Naples or Athens ?

[Steffan]

Once again I entirely agree with the comments of Gargamel. . Allowing Sovereign states to live way beyond the level of earnings that their economy can possibly maintain is both thoroughly dishonest and thoroughly improper. Inevitably the States will be totally unable to afford the level of debt they acquire in 'Borrwing' billions to subsidise their economies which can never ever repay these debts. This must result in the debt being denied and years of misery and penury for the all states concerned.

There is this fundamental economic problem right at the heart of the EU. Inevitably in the end, it will be brought to the attention of the whole world financial system and there will be hell to pay. Since none of the Solvent EU states are prepared absorb any of these losses because of the political fall out this would cause, there is no way that the EU can address the problem. Unlike the USA where California and the other wealthy United States state contributors, subsidises many the poorer American states. Federal taxation enables that process. The EU does not have that process. In consequence disaster for the EU is straight ahead.

Matter of time. The EU has created an unmanageable system and then ably demonstrated how unmanageable it has become. This is a thoroughly bad business which will inevitably damage Europe.

[paulrockliffe]

Axionknight said:

Theresa May as the next Tory leader in an effort to try and unite the party as Gove and Johnson will be seen as being far too divisive.

I'm not sure about this. Where is she? What's her position on the EU? She's vanished and it may well be that those electing the new leader see that for what it is. She's put ambition above her principles and kept out of the debate entirely.

If I had to guess I would say that she'll vote out, but she won't piss Dave off publically because of her ambition. She's weak and lacks principles. And that's before you consider what a massive massive bellend she is.

[mikees]

Or stayng silent as a minister should and letting people choose like CMD should of.

I like TM, local MP and is alright (sorry to cause offence) ;-)

[LongQ]

Steffan said:

Since none of the Solvent EU states are prepared absorb any of these losses because of the political fall out this would cause, there is no way that the EU can address the problem. Unlike the USA where California and the other wealthy United States state contributors, subsidises many the poorer American states. Federal taxation enables that process. The EU does not have that process. In consequence disaster for the EU is straight ahead.

Just a thought.

Any area, village, town, city, county, country and continent has relatively wealthy and relatively poor areas. In more or less unforced developments of social restructuring these imbalances can be resolved to some extent. The larger the area the larger the problem but the more flexibility is available. Where rapid change becomes the norm things are more difficult BUT if, like the Industrial Revolution, the net result in the relatively short term is generally positive in one way or another (one might debate that about the industrial revolution but it was an extreme period of change compared to what had gone before) and driving "wealth" then the chances are that such change will turn out to be beneficial. The wealth will usually end up on more concentrated pocket of social advancement or slave like tenements but there are opportunities to be taken and less fortunate areas (rural, perhaps, in the views of some) can be supported through the change using the "wealth engine".

Part of the effect means that people migrate to larger conurbations and, by implication, areas of greater relative wealth.

No doubt this was part of the concept of free movement within Europe. Avoid giving too much money to the poorer areas endlessly and give the population the opportunity to move to where the wealth is generated and, in general, conditions for wealth generation are simply better realisable. Simplistically - if you want manufacturing use the north of Europe, if you want leisure use the south. To get the best balance, move the people - or at least encourage them to move.

Of course all of that may take some time but, ultimately would seem to be a response that likely to be better than shovelling the results of Wealth generation straight into the Med or trying to make sows ear out of a silk purse. (not a typo).

Obviously they can't admit that so they have to go through the charade of pretending to modernise and industrialise the south first.

The disruptive effects of unforeseen events can skew the plan. The migrant movement was supposed to be self contained within a generally cohesive European culture. It was not meant to result in an open invitation for mass migration form parts of the world with very different cultural experiences - at least not until a lot more social development had established something much more like the "Europe" the project had always been intended to deliver.

I read the other day that a 14 year (supposedly) boy, having reached the UK and being entitled to a family life, can now demand that the the rest of his family is allowed to join him here. I wonder how many people some "children" might claim as family?

This "child", if he is indeed a child and has indeed made his way from an unsafe place without having his iphone stolen in France, is clearly extremely resourceful - especially for a child.

Is there a lesson to be learned here?

Perhaps he could skip the rest of a European child's education plan, which leaves them only ready to face the world alone at age 21 when they leave University (and even then not all of them), and could be appointed as a senior adviser to the "authorities" to give advice about self reliance, resilience, survival and the skill the indigenous young will require to survive in the very near future.

That would also allow him to support his family - either in the UK or perhaps "back home" where the place will become less crowded and his earnings will go further.

By such means is wealth re-distributed to the benefit of most parties involved and in ways tend to replicate developments that have always been part of the churn of change nearly all creatures have been part of in the recent history of the planet.

It only gets really messy when something or someone forces the pace.

There seem to be several influences doing that at the moment with none of them considering the others.

I'm still of the opinion that there is a good chance that next week's "vote" will become irrelevant of its own accord. But if it does not the bet that it will become irrelevant simply because there will be nothing of real, long term substance to choose to stay with or to choose to leave has to be on offer at short odds.

Meanwhile they should just move the people and not the money. It would make more sense all around. Thus it will never happen.

[Mr GrimNasty]

Steffan said:

Since none of the Solvent EU states are prepared absorb any of these losses because of the political fall out this would cause, there is no way that the EU can address the problem. Unlike the USA where California and the other wealthy United States state contributors, subsidises many the poorer American states. Federal taxation enables that process. The EU does not have that process. In consequence disaster for the EU is straight ahead.

That probably explains why California is a near basket case and ranked 44 out of 51 for fiscal soundness! Sucked dry by leeches. (And an obsession with green crap.)