Should the UK join the Eurozone?

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This topic contains 166 replies, has 17 voices, and was last updated by Profile photo of katy katy 4 years, 11 months ago.

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  • #56421
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    Anonymous
    Participant

    Personally, I’m undecided. But I’ve carefully listened to Lord Heseltine, Lord Ashdown and Wolfgang Schauble, the German finance minister, who put up a pretty formidable argument for joining.

    I’ve also listened to Nigel Farage, John Redwood and William Hague, who present a formidable argument against joining.

    To nail my colours to the mast, I’m pro-European, and I’ve lived in Spain for many happy years.

    Blair, Brown and Cameron have resisted a referendum on Europe for many years, and it’s easy to see why. A straight forward question of ‘Should we pull out of Europe?’ would meet with a resounding Yes; Rupert Murdoch still controls British public opinion through his newspaper empire.

    If the question was: ‘Do you want Britain to leave Europe and become bankrupt immediately?’ might get a different reply, even allowing for News International’s influence.

    If the question was: ‘Do you want Britain to join the Eurozone to secure your childrens’ future?’ might also get a different reply.

  • #106607
    Profile photo of katy
    katy
    Spectator

    They are the kind of questions asked during the Franco era, don’t think the British public would fall for something as devious. All this talk that the UK would suffer being outside Europe is a big con. Where is the proof that exports would suffer? Much of the UK exports are in technology, medicines that would still be needed and orders would not dry up. Don’t forget there are still world trade agreements! It may be difficult for some stuck in Spain to realise but there is a large part of the world outside Europe. If being in the EU is sooo good why are countries like Greece and Spain in such a mess ❓

    The figures that the UK exports 40% or 50% (depending on which newspapers you read) is absolute tosh!

  • #106608
    Profile photo of rt21
    rt21
    Participant

    Rocker

    I always have the greatest respect for your posts but I cannot believe that you are asking this question at this moment in time nor that you are undecided on the matter.

    After seeing all the fault lines and misery that the eurozone has imposed on various countries, I would have thought that even the most ardent of eurozone supporters would be lying low now.

    I am a big supporter of the European Union, but the creation of the eurozone is purely a political rather than an economic concept and that is why it is in a mess.

    When the political elite of member countries shy away from full consultation with their electorates over treaty changes and technocratic governments supplant democratic ones, you know that something has gone horribly wrong with the european dream.

    Richard

  • #106609
    Profile photo of ozmunky
    ozmunky
    Participant

    @katy wrote:

    They are the kind of questions asked during the Franco era, don’t think the British public would fall for something as devious. All this talk that the UK would suffer being outside Europe is a big con. Where is the proof that exports would suffer? Much of the UK exports are in technology, medicines that would still be needed and orders would not dry up. Don’t forget there are still world trade agreements! It may be difficult for some stuck in Spain to realise but there is a large part of the world outside Europe. If being in the EU is sooo good why are countries like Greece and Spain in such a mess ❓

    The figures that the UK exports 40% or 50% (depending on which newspapers you read) is absolute tosh!

    Spain, in the current sense as we know it is toast.

    Word on the bond desk is that the big players (ie China) have given up on Eurozone in the short term without the Germans doing something radical. Its certain now that they wont provide more support for the Euro than they already have.

    It doesn’t matter about the new Govt voted in on Sunday.

    Prepare for a major correction in the EU (incl house prices) over 2012 from the looming Spanish banking and Sovereign crisis thats about to begin.

    If you are holding for the short term and not renting or not holding for the long term, then I’m sorry you are in real trouble now and have missed all available exit points given to you.

    Prepare for a life changing experience if you’re a leveraged speculator.

    — Munky

  • #106611
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    peterhun
    Participant

    @rt21 wrote:

    Rocker

    I always have the greatest respect for your posts but I cannot believe that you are asking this question at this moment in time nor that you are undecided on the matter.

    I know its almost impossible to understand, but apparently, the Germans, for instance genuinely believe that the Euro is still a good idea. To the British and the rest of the world, I think, the idea of joining the Euro now or ever in its current form is ridiculous.

    Having just found out the Germans deliberately blew the UK out of the ERM I find the idea fundamentally impossible because they are obviously all stark raving mad.

    Word on the bond desk is that the big players (ie China) have given up on Eurozone in the short term without the Germans doing something radical. Its certain now that they wont provide more support for the Euro than they already have.

    It was reported in the Telegraph last week, Asia is dropping the Euro-zone completely.

  • #106612
    Profile photo of angie
    angie
    Spectator

    Again, I agree with katy on this, and the Pro campaigners are conning the British public. There are lots of other huge trading opportunities worldwide including NAFTA which is mainly English speaking as well so no confusion on dodgy contracts.

    Rocker, I would vote against the UK joining this Brussels run (with German Strings) Eurozone.

    Take one small example of how many of the UK’s roads are all potholed and broken, yet Spain and Portugal have some fabulous new roads in the middle of no-where and heavily funded by the UK taxpayer, it’s a b—-y farce and the UK would get milked more and more whilst the Eurocrats will get richer and richer. 😡

  • #106613
    Profile photo of Anonymous
    Anonymous
    Participant

    @rt21 wrote:

    Rocker

    I always have the greatest respect for your posts but I cannot believe that you are asking this question at this moment in time nor that you are undecided on the matter.

    After seeing all the fault lines and misery that the eurozone has imposed on various countries, I would have thought that even the most ardent of eurozone supporters would be lying low now.

    I am a big supporter of the European Union, but the creation of the eurozone is purely a political rather than an economic concept and that is why it is in a mess.

    When the political elite of member countries shy away from full consultation with their electorates over treaty changes and technocratic governments supplant democratic ones, you know that something has gone horribly wrong with the european dream.

    Richard

    Thank you for the compliment and I wholeheartedly agree with your post. The UK is between a rock and a hard place. We’re printing money as is the US, but it’s not helping, we’re sinking deeper into debt.

    The ECB is still refusing to join us in cranking up the Euro presses, probably bowing to pressure from Germany, the elephant in the room.

    Something has gone horribly wrong, as you pointed out with Italy’s crazy ‘government’, but if the UK joined the party it might spook the markets to behave.

    Britain, Germany and France, all on the same side, would be a formidable world force against the ‘enemy’ from the east.

  • #106614
    Profile photo of Anonymous
    Anonymous
    Participant

    @peterhun wrote:

    @rt21 wrote:
    Rocker

    I always have the greatest respect for your posts but I cannot believe that you are asking this question at this moment in time nor that you are undecided on the matter.

    I know its almost impossible to understand, but apparently, the Germans, for instance genuinely believe that the Euro is still a good idea. To the British and the rest of the world, I think, the idea of joining the Euro now or ever in its current form is ridiculous.

    Having just found out the Germans deliberately blew the UK out of the ERM I find the idea fundamentally impossible because they are obviously all stark raving mad.

    Word on the bond desk is that the big players (ie China) have given up on Eurozone in the short term without the Germans doing something radical. Its certain now that they wont provide more support for the Euro than they already have.

    It was reported in the Telegraph last week, Asia is dropping the Euro-zone completely.

    Talking about ‘stark raving mad’, Farage, Redwood and Hague are the best examples I can think of, in respect of this short discussion. They even look it, but that’s an unkind remark.

    Your post implies a hatred for Germany, replicated throughout UKIP and the like. Historically, it’s understandable, but the world has moved on from the events of a hundred years ago.

    They lynched the last black man in Georgia in 1956, but the most powerful country in the world now has a black president.

    Perhaps it’s time for the rest of us to move on too. The Poles and the Serbians are on side, and the Finns and Greeks, it’s time to step out of the trenches, son, and face the new world.

  • #106616
    Profile photo of Chopera
    Chopera
    Participant

    @Rocker wrote:

    Personally, I’m undecided. But I’ve carefully listened to Lord Heseltine, Lord Ashdown and Wolfgang Schauble, the German finance minister, who put up a pretty formidable argument for joining.

    I’ve also listened to Nigel Farage, John Redwood and William Hague, who present a formidable argument against joining.

    To nail my colours to the mast, I’m pro-European, and I’ve lived in Spain for many happy years.

    Blair, Brown and Cameron have resisted a referendum on Europe for many years, and it’s easy to see why. A straight forward question of ‘Should we pull out of Europe?’ would meet with a resounding Yes; Rupert Murdoch still controls British public opinion through his newspaper empire.

    If the question was: ‘Do you want Britain to leave Europe and become bankrupt immediately?’ might get a different reply, even allowing for News International’s influence.

    If the question was: ‘Do you want Britain to join the Eurozone to secure your childrens’ future?’ might also get a different reply.

    What do you mean by pro-European?

  • #106617
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    peterhun
    Participant

    @Rocker wrote:

    Your post implies a hatred for Germany, replicated throughout UKIP and the like. Historically, it’s understandable, but the world has moved on from the events of a hundred years ago.

    They lynched the last black man in Georgia in 1956, but the most powerful country in the world now has a black president.

    Perhaps it’s time for the rest of us to move on too.

    I’m a fan of the Euro and I want the UK and Poland join it. Poland has a very large part of its infrastructure embedded from Germany so I would be keen on fiscal union between Poland and Germany. I cannot stand the UKIP.

    But I stand by my comments about Germany, they are insane in that they have no connection with the reality that the Eurozone is on the point of collapse.

    Even the Germans believe that a large number of countries will be leaving the Eurozone, so any talk about new members is ridiculous.

    The Poles and the Serbians are on side, and the Finns and Greeks, it’s time to step out of the trenches, son, and face the new world.

    That new world has spectacularly failed. Six countries bailed out by the IMF; really impressive.

    The Poles will only join the Euro when the Eurozone qualifies as being suitable for Poland. As it stands the Euro will not be ready for Polands entry for five years at least, according to the Polish FM.

    The Finns and Greeks will probably leave the Euro and Serbia isn’t even going to be eligible for EU entry.

  • #106618
    Profile photo of Chopera
    Chopera
    Participant

    @peterhun wrote:


    The Finns and Greeks will probably leave the Euro and Serbia isn’t even going to be eligible for EU entry.

    I don’t know why the Finns, Norwegians, Swedes and Danes don’t just tell the EU to go shove it and build their own Scandinavian free trade zone instead. Together they would have enough economic power to knock the likes of Sarkozy down a peg or two.

  • #106623
    Profile photo of Anonymous
    Anonymous
    Participant

    I read informed comments today, one saying that the British housing market will never recover, and one saying something even worse about the Spanish one.

    The former surprised me and I had to check that the member of the BOE monetary committee who made the comment had indeed used the word Never.

    The Spanish commentator did not surprise me, not at all; when a few of us made predictions about the Spanish housing market for 2011 earlier this year, I said I expected a 30% fall in house prices this year. I believe that target has already been reached, and it makes me hellishly sad because I own a house here in Spain.

    What has it got to do with the Eurozone? Everything, in my opinion. Currently, the zone in unbalanced, the southern members are dragging it down, for a myriad of reasons.

    There is one simple solution. The large UK economy should join with Germany, France and the others to show European solidarity to the world. The markets would soon turn their attention elsewhere and allow the Med countries to catch up.

    Spain, especially, is trying hard, but it takes time. The adjustments are painful, as is shown by the falling property market.

    It’s not Merkel who holds the key to a world recovery, it’s Cameron (and Clegg, if you believe in fairies).

  • #106625
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    Chopera
    Participant

    Rocker – the UK economy is just about surviving because the Bank of England is buying all it’s debt (bonds) through Quantitive Easing, while the government is trying (and failing) to cut the deficit. If the UK joined the euro the ECB would refuse to buy UK debt, so quantitive easing would stop. UK gilt yields would go through the roof, and the UK would require a bailout and pull the rest of the eurozone economy down. As I’m tired of saying on here – what do you think would have happened to the UK economy had it adopted the euro in 2002? During the credit boom interest rates in the UK would have been half of what they were and the credit boom (and bust) twice as big.

    I find it incredible that people refuse to see what’s going on and adopt this “la la la I’m not listening … everything will be OK” attitude when all the evidence suggests otherwise. Don’t get me wrong – I’d love to hear a robust argument for why the euro will benefit countries that adopt it, but nobody has provided one. Even Heseltine’s pro-euro ally John Major recently admitted that he was wrong.

  • #106626
    Profile photo of rt21
    rt21
    Participant

    Rocker

    How can Britain join when the policies it is pursuing to protect the British Economy are completely different to the policies that the Eurozone is adopting.

    The problems facing individual European counties are dissimilar and require different solutions. That is why a policy that is appropriate for Germany would be quite inappropriate for the UK or for that matter Greece and Spain. And of course vice- versa.

    Richard

  • #106627
    Profile photo of peterhun
    peterhun
    Participant

    @Rocker wrote:

    There is one simple solution. The large UK economy should join with Germany, France and the others to show European solidarity to the world. The markets would soon turn their attention elsewhere and allow the Med countries to catch up.

    Nice idea and what the UK, USA, China and the rest of the world have been telling, demanding of Germany. Germany has refused point blank. There is no solidarity behind the Euro, there is no lender of last resort and there doesn’t look like there ever will be.

    @Rocker wrote:

    It’s not Merkel who holds the key to a world recovery, it’s Cameron (and Clegg, if you believe in fairies).

    Don’t know why you think the UK could help, the moment it joined the Euro its would go bust. Its level of debts are way beyond anything in the Eurozone.

  • #106635
    Profile photo of peterhun
    peterhun
    Participant

    @peterhun wrote:

    It was reported in the Telegraph last week, Asia is dropping the Euro-zone completely.

    Ok, now its a disaster German bonds fail to sell.

    German bond sale fails to attract buyers

    By David Oakley and Tracy Alloway

    Germany saw one of its poorest debt sales on Wednesday in what was seen as a failed auction by many market participants amid fears the eurozone’s debt crisis is spreading all the way to Berlin.

    Marc Ostwald, at Monument, said “I cannot recall a worse auction … If Germany can only manage this sort of participation, what hope for the rest. Yields are at completely the wrong level.”

    Mr Oswald said the bid-to-cover ratio was only 0.65 times as the German debt agency sold just €3.644bn of its new 10-year Bund of the €6bn targeted.

    The Bundesbank retained a massive €2.356bn, which it will plan to sell over the coming days in the hope market sentiment improves. If the Bundesbank retention is included, the bid-to-cover ratio was a modest 1.1 times.

    Many market participants consider this an auction failure although some say technically it is not, as by retaining its own bonds the Bundesbank has pushed the bid-to-cover ratio above 1.0 times.

    The average yield for the 10-year bonds was 1.98 per cent.

    The euro fell sharply against the dollar after the results of the auction were released. The single currency dropped 1 per cent to $1.3379 and lost 0.6 per cent to Y103.30 against the yen. Against the pound, it was down 0.5 per cent to £0.8595.

    Annalisa Piazza at Newedge Strategy said: “The auction was extremely poor. Despite the new paper looking attractive, the extreme richness of the German debt weighed on today’s demand.”

    The fear is spreading on the trading floors as Germany is starting to trade like a risk asset with Bund yields rising more or less in line with French, Italian, Spanish and Belguim yields.

    One trader said: “This poor auction reflects the worries about Germany and the fact that many clients are now asking: ‘Is my money safe even in Germany if the euro is going to collapse? What will happen to my euro-denominated debt?’.”

    The European Central Bank was seen intervening in the markets again, but it did little to ease tensions.

    The credit default swaps markets, which are used to insure bonds against default, also saw jumps in price amid the growing concern over the eurozone.

    Italian 10-year bond yields rose to 6.92 per cent, up 10 basis points, Spanish yields rose to 6.65 per cent, up 5bp, German yields were 2.03 per cent, up 8bp, France yields stood at 3.62 per cent, up 9bp and Belgium yields rose to 5.20 per cent, up 13 bp.

    Italian CDS prices jumped to 558bp, or the cost of $558,000 to insure $10m of debt annually over five years, up 7bp on the day, Spanish CDS stood at 448bp, French CDS at 245bp and Belgium CDS at 361bp.

    Significantly, the cost to insure German bonds against default has jumped to 107bp, above those of the UK.

    Elsewhere, stresses were seen in the currency swap markets with the cost to swap euros for dollars at the highest level since the end of 2008 amid a growing clamour to get out of euro-denonomited assets.

    One trader said: “The only reason the euro is holding up is because of some repatriation, but we are starting to see the sell-off of the currency. This could be the start of the end unless the policy-makers act swiftly.”

    http://www.ft.com/cms/s/0/78994200-15c2-11e1-8db8-00144feabdc0.html

  • #106638
    Profile photo of GarySFBCN
    GarySFBCN
    Participant

    (previously posted in the wrong forum)
    Doesn’t this chart indicate that the UK would bring more debt to the euro?

  • #106620
    Profile photo of Chopera
    Chopera
    Participant

    @garysfbcn wrote:

    (previously posted in the wrong forum)
    Doesn’t this chart indicate that the UK would bring more debt to the euro?

    Exactly

  • #106646
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    Anonymous
    Participant

    A lot of commentators (I’m not talking about this forum now) don’t understand ‘debt’, or the difference between good and bad debt.

    To pay back debt without growth is fatal, as several countries are finding out right now. The rating agencies measure a country’s creditworthiness on other factors, as well as debt, and the current jittery markets react to all sorts of things, often just silly rumours.

    What Europe needs is a show of solidarity, and the Eurozone even more so. A bickering giant on its shores is not helpful.

  • #106647
    Profile photo of kgpoc
    kgpoc
    Participant

    Rocker I completely agree with your first assessment (it is above my pay grade to decide)! I respect every ones opinions on this, here is some food for thought.

    -UK business has been structured and managed over the last 15 years with the idea they are part of the biggest economy in the world. Now how fast do you think a UK company could unwind itself (under current UK laws and or how long to learn and write new laws) to get over the new unknown hurdles to compete back in the EU in direct competition with the global companies, suspecting that the EU might just feel a little spurned?

    -The EU in its base form is a treaty written by men deciding that being part of a bigger pie brings greater value to more than a smaller pie. If there is inequality it is mainly due to a human negotiating error, but will be perceived as an ideology failure. A successful vote to pull out will in effect defunct the ideal of the UK. Separate Scotland, England, N Ireland and Wales.

    -With the separation in mind, go and see the type of quality leadership that believes in that cause. Are they visionaries? Are they capable leader?

  • #106651
    Profile photo of peterhun
    peterhun
    Participant

    @Rocker wrote:

    What Europe needs is a show of solidarity, and the Eurozone even more so. A bickering giant on its shores is not helpful.

    I presume you are referring to Germany here? The UK, USA and the rest of the World are pretty clear what Germany needs to do.

    Which may be a long time coming

    In other words, the time to sell bunds will be when Germany finally realises the game is up and reluctantly props up the Eurozone, probably via the printing presses of the ECB.

    Unfortunately, that won’t happen until Eurozone has a near death experience with countries threatening to leave the currency union and customers lining up outside banks demanding their money back.

    http://ftalphaville.ft.com/blog/2011/11/23/760601/germany-the-only-first-class-passenger-on-the-titanic/

  • #106655
    Profile photo of Anonymous
    Anonymous
    Participant

    @kgpoc wrote:

    Rocker I completely agree with your first assessment (it is above my pay grade to decide)! I respect every ones opinions on this, here is some food for thought.

    -UK business has been structured and managed over the last 15 years with the idea they are part of the biggest economy in the world. Now how fast do you think a UK company could unwind itself (under current UK laws and or how long to learn and write new laws) to get over the new unknown hurdles to compete back in the EU in direct competition with the global companies, suspecting that the EU might just feel a little spurned?

    -The EU in its base form is a treaty written by men deciding that being part of a bigger pie brings greater value to more than a smaller pie. If there is inequality it is mainly due to a human negotiating error, but will be perceived as an ideology failure. A successful vote to pull out will in effect defunct the ideal of the UK. Separate Scotland, England, N Ireland and Wales.

    -With the separation in mind, go and see the type of quality leadership that believes in that cause. Are they visionaries? Are they capable leader?

    To specifically reply about separation and Scotland in particular, Alex Salmond is the most (educationally) qualified leader of them all, with a joint honours MA in economics and history from St Andrews.

    He wants Scotland to join the Eurozone, after independence, which seems unstoppable.

    I’m not sure about UK business being somehow isolated from the rest of Europe, a lot of the bigger companies are already owned and run by ‘foreigners’, especially from Spain, and I’m not just talking about Santander.

    The small core of toothless eurosceptics are vocal in the Conservative party, but have little influence in the world of business which regards them as a nuisance holding back growth.

  • #106656
    Profile photo of peterhun
    peterhun
    Participant

    I’m not sure about UK business being somehow isolated from the rest of Europe, a lot of the bigger companies are already owned and run by ‘foreigners’, especially from Spain, and I’m not just talking about Santander.

    The UK is the biggest receiver of inward investment in Europe, Spain is the 9th biggest investing country. The USA is the biggest investor at about 10x Spain’s investments.

    He wants Scotland to join the Eurozone, after independence, which seems unstoppable.

    I’d love to see how he will handle the Scottish banks debt, they are either headquartered in Scotland and Scotland becomes insolvent or the jobs move South. Either way, its all good.

    And how would Scotland join the Eurozone without its own currency, the Pound doesn’t qualify for entry. Having a Scottish currency first will mean it gets wrecked by by size of its banks. Salmond is a bullshitter.

    The Germans will never allow a tiny debt ridden country with no economic reason, other than ego, to join the Euro. The old Euro is dead, the new Euro will require fiscal union. They going to be learning Germany in the ‘independent’ Scotland?

  • #106657
    Profile photo of logan
    logan
    Participant

    Alex Salmond is first and foremost a Scottish Nationalist. It’s not just his parties name, it’s their entire philosophy. He is a 100% separatist from the United Kingdom. His desire to join the European Union as a separate nation is very odd and transparently stupid.
    Why achieve national sovereignty for Scotland after a millennium of struggle simply to hand it back on a plate to Brussels?
    It’s completely daft, won’t happen and is simply a large spoon on which to stir up nationalist clap trap.

    After the failed Bund auction yesterday, Merkle, Sarkozy and Monti are having yet another meeting today. Barrosso has come out in support for Eurobonds. There seems to be an unstoppable momentum now towards pushing Germany into a corner and forcing them to agree to allow the ECB to fund sovereign debt in the Eurozone.

    This is how the EU conducts business, constant wrangling, meetings which never achieve anything and position posturing. There is little wonder the world has now lost patience with it all.

    The UK in the Euro is as likely in yours and my lifetime as pink elephants flying over Westminster bridge. 🙂

  • #106659
    Profile photo of katy
    katy
    Spectator

    @logan wrote:

    This is how the EU conducts business, constant wrangling, meetings which never achieve anything and position posturing. There is little wonder the world has now lost patience with it all.

    The UK in the Euro is as likely in yours and my lifetime as pink elephants flying over Westminster bridge. 🙂

    Absolutely!The majority of the UK would vote for Scotland to leave the UK too and would be delighted to see them go it alone.

  • #106661
    Profile photo of logan
    logan
    Participant

    Good summary from Jeremy Warner here;
    http://www.telegraph.co.uk/finance/comment/jeremy-warner/8910266/The-eurozone-crisis-an-opportunity-for-Britain-Dont-bet-on-it.html
    Far from seeking closer integration with Europe the UK is rowing it’s boat in the opposite direction.
    About time too. 🙂

    This is not a politically idealogical debate, it’s simply in my view a very strong belief that sovereign nations, in order to be successful must be able to run their own affairs. Whilst at the same time having strong economic trading ties with other nations as well as European states.

    All the evidence points to a catastrophic failure of the Euro project which was foisted for political reasons on nations which could not refuse it. The sooner it dies the better for all.

  • #106662
    Profile photo of peterhun
    peterhun
    Participant

    The sooner it dies the better for all.

    I disagree, for the core countries with shared borders and integrated infrastructure a currency and financial union makes a lot of sense – look at mainland Britain for instance. The mistake was letting shitty countries like Italy and Greece join and why did Ireland join when its trade is mainly with the UK/NI? one small island and two currencies – smart.

    Having one currency was good for business even if it was so fundamentally flawed in implementation

    Far from seeking closer integration with Europe the UK is rowing it’s boat in the opposite direction.

    Utterly bizarre that the Eurozone countries would talk about the UK joining. What are they smoking.

    But what can be said is that the single currency is proving a more profoundly destabilising force in Europe – economically, financially and politically – than anything that has occurred since the Second World War.

  • #106663
    Profile photo of logan
    logan
    Participant

    @peterhun wrote:

    Having one currency was good for business even if it was so fundamentally flawed in implementation

    I agree a single currency might be good for business but that’s just where it ends. The costs that comes with it is in my opinion too great.
    These consequences of a currency union for the peripheral states was not thought out properly and as a result has been catastrophic for their economies. Many economist pointed that out at the time and the UK, Sweden and Denmark were the only countries who could foresee that.
    Now the EU are proposing further measures to try and shore the up the disaster, such as fiscal union and a single European treasury with an unelected finance ministry, alongside an unelected foreign minister and president. Harmonised tax rates with a massive tax gathering machine.
    Being unelected by the people suits the EU. After all Italy and Greece now have unelected prime ministers.
    Where is this all heading? The consequences for a future democratic Europe are profound.
    I am not scaremongering here because the evidence is clear to anyone who bothers to look beyond the political rhetoric. Europe is moving ever closer to being an unaccountable, undemocratic, unrepresentative monster.

  • #106664
    Profile photo of Anonymous
    Anonymous
    Participant

    @logan wrote:

    Good summary from Jeremy Warner here;
    http://www.telegraph.co.uk/finance/comment/jeremy-warner/8910266/The-eurozone-crisis-an-opportunity-for-Britain-Dont-bet-on-it.html
    Far from seeking closer integration with Europe the UK is rowing it’s boat in the opposite direction.
    About time too. 🙂

    This is not a politically idealogical debate, it’s simply in my view a very strong belief that sovereign nations, in order to be successful must be able to run their own affairs. Whilst at the same time having strong economic trading ties with other nations as well as European states.

    All the evidence points to a catastrophic failure of the Euro project which was foisted for political reasons on nations which could not refuse it. The sooner it dies the better for all.

    ‘Sovereign nations – strong economic trading links with other European nations’. Therein lies the rub.

    It’s the Eurosceptics dream scenario – we don’t want to be in your club, but please let us tell you what to do and buy our goods.

    At the moment the UK is a halfway house, we’re in the EU, but not in the Eurozone. Last week we had the ridiculous situation where the EU president had to almost physically remove the British contingent when the zone members wanted to discuss Eurozone business.

    There is the real danger of a financial transaction tax within Europe which will effectively close down the City of London. At the moment we’re lucky that Germany still benignly accepts our ‘on the edge’ stirrings, God help us if they side with the French.

  • #106665
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    peterhun
    Participant

    @Rocker wrote:

    It’s the Eurosceptics dream scenario – we don’t want to be in your club, but please let us tell you what to do and buy our goods.

    At the moment the UK is a halfway house, we’re in the EU, but not in the Eurozone.
    There is the real danger of a financial transaction tax within Europe which will effectively close down the City of London.

    There won’t be much of a eurozone for much longer. There will be at most half the member countries in a new Euro, so they will very much in the minority. The Euro has proven to be a disaster for its members, yet people like you are unable to accept that.

    @Rocker wrote:

    There is the real danger of a financial transaction tax within Europe which will effectively close down the City of London.

    No danger of that, the UK will simply leave the EU, it will be the EU’s loss, and join Spain, Italy and the other countries who are kicked out due to Euro crash.

  • #106669
    Profile photo of logan
    logan
    Participant

    @Rocker wrote:

    There is the real danger of a financial transaction tax within Europe which will effectively close down the City of London. At the moment we’re lucky that Germany still benignly accepts our ‘on the edge’ stirrings, God help us if they side with the French.

    Rocker do you seriously believe Germany only tolerates the UK? The EU needs the UK far more that the UK needs the EU for a variety of reasons not least our high budget contributions, relationship with the USA and our military capability.
    The financial tax proposed by Sarkozy will be kicked into the long grass very soon. It ‘aint going to happen since it needs to be agreed globally and the USA and Britain very sensibly will have none of it.
    Sarkozy will soon be history in any case and the lead he has given France within Europe will be weaken considerably with the socialist Hollande, who has no government or parliamentary experience. One more grey technocrat to add to the bunch.

  • #106681
    Profile photo of Anonymous
    Anonymous
    Participant

    @logan wrote:

    Rocker do you seriously believe Germany only tolerates the UK? The EU needs the UK far more that the UK needs the EU for a variety of reasons not least our high budget contributions, relationship with the USA and our military capability.
    The financial tax proposed by Sarkozy will be kicked into the long grass very soon. It ‘aint going to happen since it needs to be agreed globally and the USA and Britain very sensibly will have none of it.
    Sarkozy will soon be history in any case and the lead he has given France within Europe will be weaken considerably with the socialist Hollande, who has no government or parliamentary experience. One more grey technocrat to add to the bunch.

    I’m sorry to have to make this point, but if you believe that our friendship with the USA and our military capabilities in any way influences the way the rest of Europe regard us, you are way off the mark. What are you suggesting, if they don’t agree with us, we should bomb Paris?

    As far as the transaction tax is concerned, if the Eurozone agrees to restrict dealings concerning the Eurozone to only take place within the zone, then they are quite entitled to do so, and if our City or Wall Street wish to trade with the zone, they will have to pay the tax.

    This decision can only be made within the zone, it has nothing to do with the UK, the US, the Russians, or anyone else in the world.

    I’m not suggesting it would be a wise move on their part.

  • #106682
    Profile photo of logan
    logan
    Participant

    @Rocker wrote:

    I’m sorry to have to make this point, but if you believe that our friendship with the USA and our military capabilities in any way influences the way the rest of Europe regard us, you are way off the mark. What are you suggesting, if they don’t agree with us, we should bomb Paris?

    Your being a little silly Rocker or simply playing devils advocate. 🙁
    What I meant was the UK still has some wide political influence in the world which contributes immensely to Europe’s strategic policies.

    A UK outside political Europe would only go into bat for itself. A Europe on that basis would be severely weakened and Germany and France know it and needs the UK on board.

    I have never suggested the UK leave the EU. I believe in a European trading block, countries cooperating in trade and wider world geopolitical issues and that’s where it should end.

    It has been publicly acknowledged by Sarkozy that the proposed financial transaction tax cannot be implemented unless everyone agrees, meaning the US and UK. It would be unworkable for the Eurozone to do it alone for obvious reasons.

  • #106684
    Profile photo of peterhun
    peterhun
    Participant

    @Rocker wrote:

    @logan wrote:

    As far as the transaction tax is concerned, if the Eurozone agrees to restrict dealings concerning the Eurozone to only take place within the zone, then they are quite entitled to do so, and if our City or Wall Street wish to trade with the zone, they will have to pay the tax.

    This decision can only be made within the zone, it has nothing to do with the UK, the US, the Russians, or anyone else in the world.

    The WTO would put a stop to any restrictive practices, besides the EFTA would have to right to trade freely in the EU just as it does now and free of EU taxes. If the Eurozone wants to close itself to world investment maybe it should also tear up all those free trade agreements which are the whole purpose of the EU.

    EU law demands free trade in the EU, blocking EU members from other EU markets is a violation of the fundamentals of the EU. US companies will trade in Euro assets in the US and the Eurozone cannot stop them, same for any other country.

    Bottom line, your argument is bollocks.

    @Rocker wrote:

    I’m sorry to have to make this point, but if you believe that our friendship with the USA and our military capabilities in any way influences the way the rest of Europe regard us, you are way off the mark. What are you suggesting, if they don’t agree with us, we should bomb Paris?

    Germany and the CE states have a genuine fear of the Russians. Poland is almost begging for military protection from the US. Germany is very careful too, and only France and the UK have much military capability in Europe

  • #106693
    Profile photo of Chris McCarthy
    Chris McCarthy
    Participant

    Put aside trade deals, economic blocs, weaker south, stronger North, the fact that yes had Britain joined in 2002 we might have been far worse off than now, is there…. and oh heaven help me for asking this…

    Is there not an argument here, that whilst in the Euro, Germany has taken on board 11 million East Germans, a once devastated communist state, they have built such a strong economy it is totally domninant, they are on the verge of FULL EMPLOYMENT they have the power, influence and leadership control over the rest of EU, and if they are so bloody successful…

    Why would we, who have massive unemployment, a grotesque benefits culture, a disappeared manufacturing base, an obscene and society threatening propensity to print money via QE because we are so broke. Why would we, not want to emulate Germany, partner with Germany, be as one with Germany who hold all of our own values and unlike us have managed to maintain and deliver upon them.

    Surely, Germany is our shining light to follow?

    They were in the Euro, and made a huge success of it since 2002, could we not have done the same?

  • #106694
    Profile photo of Anonymous
    Anonymous
    Participant

    @Chris McCarthy wrote:

    Surely, Germany is our shining light to follow?

    They were in the Euro, and made a huge success of it since 2002, could we not have done the same?

    Germany took advantage of EU since 2002.

    They will never accept to share the gains with UK.

  • #106696
    Profile photo of Chris McCarthy
    Chris McCarthy
    Participant

    @flosmichael wrote:

    Germany took advantage of EU since 2002.
    They will never accept to share the gains with UK.

    Quite possibly so, but with respect, that wasn’t my point.

    My question was were they not a shining light and example to follow?

    Or look at it another way…

    Who’s smarter really – them or us?

  • #106697
    Profile photo of Anonymous
    Anonymous
    Participant

    @Chris McCarthy wrote:

    @flosmichael wrote:
    Germany took advantage of EU since 2002.
    They will never accept to share the gains with UK.

    Quite possibly so, but with respect, that wasn’t my point.

    My question was were they not a shining light and example to follow?

    Or look at it another way…

    Who’s smarter really – them or us?

    There is no shining light.

    Germans offered cheap money (to themselves and all the EU) and Spain/Portugal/Greece used this cheap money to fuel stupid bubbles.
    Germans banks were making huge profits.

    So, no, Germany’s example is not to be followed.

    Nobody was smarter, all were fools looking for immediate gratification and gains. 10 years of extravagance and now the bills comes.
    the question is: should Spain/Portugal/Greece pay the bill or the bill should be halved between Spain/Portugal/Greece and Germany/Netherlands?

  • #106699
    Profile photo of peterhun
    peterhun
    Participant

    @Chris McCarthy wrote:

    Quite possibly so, but with respect, that wasn’t my point.

    My question was were they not a shining light and example to follow?

    Or look at it another way…

    Who’s smarter really – them or us?

    Neither, the Germans as as stupid as the rest of us.

    Their economy is dependant on cheap money in the rest of the EU and the lowering effect to the Euro that the bad economies provided.

    Germany is as a bad example of an imbalanced economy as Spain, when the EU crashes so will Germany. Remember in 2008 exports fell something like 20% in one quarter. Germany had a stagnant economy with high unemployment quite recently.

  • #106700
    Profile photo of zoro
    zoro
    Participant

    West Germany were an economic powerhouse even before the Euro and were referred to as an economic miracle even then. They have many traits to be admired when it comes to their work ethic and unlike in Britain, their trade unions always saw themselves as partners with the bosses in making their companies perform well rather than as adversaries, out to get as much of the pie for themselves as they could..

    Reunification slowed them down for many years but they were overcoming that and then came the Euro.

    As was said earlier in this thread, Germany took full advantage of the Euro and it’s relative cheapness to what the DMark would have been has been an enormous advantage for their exporters. Just look at the number of German cars you see in the PIIGS and Britain who really shouldn’t have been able to afford that many, but could due to cheap money and, in the case of the PIIGS, the fact they shared the Euro currency with Germany.

    It has been asked why Britain could not now join the Euro and emulate the German success story. I suggest the answer is that if we were capable of emulating them we would have done so years ago. Joining the Euro would not make one jot of difference to that.

    Personally, I always wanted Britain to be in the Euro for selfish reasons i.e. holidays, foreign purchases etc. but I now see how wrong I was. The Euro is fundamentally flawed, which wasn’t a problem in the boom years but is a waking nightmare now. The Euro can only work long term if fiscal and political union in Europe becomes a reality. I see no way of that happening at this time.

    This week there have been several articles which are reporting that it is widely accepted in financial circles (press and financial institutions) that 2012 will be the make or break year for the Euro.

    Here are three, all from the BBC:

    http://www.bbc.co.uk/news/business-15868210

    http://www.bbc.co.uk/news/business-15889136

    http://www.bbc.co.uk/news/business-15869945

    In summary something has got to give. Either Germany bites the bullet and bails out the rest of Europe by accepting the idea of Eurobonds and the ECB as lender of last resort in which case the Euro survives or they don’t and the Euro goes pop, either by Germany leaving it or the rest of Europe defaulting on their loans and making the Eurozone a no go area for the rest of the world.

  • #106703
    Profile photo of Anonymous
    Anonymous
    Participant

    @zoro wrote:

    West Germany were an economic powerhouse even before the Euro and were referred to as an economic miracle even then. They have many traits to be admired when it comes to their work ethic and unlike in Britain, their trade unions always saw themselves as partners with the bosses in making their companies perform well rather than as adversaries, out to get as much of the pie for themselves as they could..

    Reunification slowed them down for many years but they were overcoming that and then came the Euro.

    As was said earlier in this thread, Germany took full advantage of the Euro and it’s relative cheapness to what the DMark would have been has been an enormous advantage for their exporters. Just look at the number of German cars you see in the PIIGS and Britain who really shouldn’t have been able to afford that many, but could due to cheap money and, in the case of the PIIGS, the fact they shared the Euro currency with Germany.

    It has been asked why Britain could not now join the Euro and emulate the German success story. I suggest the answer is that if we were capable of emulating them we would have done so years ago. Joining the Euro would not make one jot of difference to that.

    Personally, I always wanted Britain to be in the Euro for selfish reasons i.e. holidays, foreign purchases etc. but I now see how wrong I was. The Euro is fundamentally flawed, which wasn’t a problem in the boom years but is a waking nightmare now. The Euro can only work long term if fiscal and political union in Europe becomes a reality. I see no way of that happening at this time.

    This week there have been several articles which are reporting that it is widely accepted in financial circles (press and financial institutions) that 2012 will be the make or break year for the Euro.

    Here are three, all from the BBC:

    http://www.bbc.co.uk/news/business-15868210

    http://www.bbc.co.uk/news/business-15889136

    http://www.bbc.co.uk/news/business-15869945

    In summary something has got to give. Either Germany bites the bullet and bails out the rest of Europe by accepting the idea of Eurobonds and the ECB as lender of last resort in which case the Euro survives or they don’t and the Euro goes pop, either by Germany leaving it or the rest of Europe defaulting on their loans and making the Eurozone a no go area for the rest of the world.

    An excellent post and three superb links to make you think. And it has cleared my mind of a US aircraft carrier parked off St Tropez to teach those pesky Frenchies to show a bit more respect.

    I also think that 2012 will be the big one for the Eurozone and have no idea what Germany or France will do next. They’re meeting with Italy as we speak, but we’ve not been invited.

    That’s the one thing I object to most of all, we are not invited to have our say, yet whatever is decided will affect us just as much as anyone else. Anyone rubbing their hands with glee at the prospect of the Euro failing plainly doesn’t understand even the simplest economics.

  • #106706
    Profile photo of GarySFBCN
    GarySFBCN
    Participant

    Banco de Valencia granted loans amounting to 100 million euros to its board of directors in 2010, according to the report on corporate governance of the entity operated on 21 November by the Bank of Spain because of solvency problems and viability.

    http://www.eleconomista.es/empresas-finanzas/noticias/3558581/11/11/Banco-de-Valencia-concedio-100-millones-en-creditos-a-su-consejo-en-2010.html

    All of this talk about the euro, the UK and speculation if the euro will survive appears the ignore the very real threat of the justified civil unrest that is going to occur. I understand the need for some austerity measures, but not until these and other criminal bankers and brokers are throw in jail and their assets are seized.

    Sadly, around the world, few who actually caused the global economic collapse are held accountable and yet those whose salaries are the lowest are asked to sacrifice. The last time I checked, the media salary in Spain is 1.000 euros a month, which hardly seems excessive.

  • #106708
    Profile photo of Anonymous
    Anonymous
    Participant

    I was innocently reading some of the expat news in Spain today. A lot of these newspapers are free and the quality of the ‘journalism’ is not high. I came across an article written by a financial commentator writing about the nationalisation of the Banco de Valencia, this week, and the same Bank of Spain takeover of the bigger CAM bank a few months ago.

    Both banks have large black holes in their accounts, due to their exposure to the Spanish property market and some shocking incompetence and corruption.

    But the commentators advice at the end of the article made me sit up. He seriously suggested that all expats should keep at least three months supply of ready cash at home, just in case.

    When I stopped laughing, I thought a bit more about it. Could it happen that you go to the bank and find that they are out of money?

    It happened in the thirties, didn’t it?

  • #106709
    Profile photo of katy
    katy
    Spectator

    Deposits of up to 100,000 are guaranteed in Spanish banks….of course we all know about Spanish bank guarantees don’t we 😉

  • #106711
    Profile photo of rt21
    rt21
    Participant

    @Rocker wrote:

    Could it happen that you go to the bank and find that they are out of money?

    Although doubtful, anything is possible in these dark days.

    It is possible, in circumstances say where Spain left the eurozone, that you could go to your bank and find that they have had to take an enforced holiday. And when they open you would find that the international value of your deposit is significantly less than what it was before.

    Richard

  • #106712
    Profile photo of peterhun
    peterhun
    Participant

    @rt21 wrote:

    @Rocker wrote:
    Could it happen that you go to the bank and find that they are out of money?

    Although doubtful, anything is possible in these dark days.

    It is possible, in circumstances say where Spain left the eurozone, that you could go to your bank and find that they have had to take an enforced holiday. And when they open you would find that the international value of your deposit is significantly less than what it was before.

    Richard

    The possibility of Euro breakup was put at 50:50 yesterday. What happened in Argentina and more recently Iceland is a a guide to devaluation/currency collapse.

    At first there will be EITHER a bank run as people attempt to get their money out or government announces a sudden closure of the banking system and capital controls. Transferring money in or out of the country is impossible (Greece has seen much of it wealth fly oversea already).

    Banks, ATM’s, credit card systems stop working. Cash is still accepted but foreign exchange is impossible to get or at a very high level. How long this period lasts is difficult to say and depends on the government’s organization skills and the state of the rest of the world ensuring a new currency is available. Printing new notes will take time, especially as there maybe a dozen other countries trying to print simultaneously.

    Having a foreign currency account in a local bank won’t help. In Argentina the USD accounts (many people had them) were converted to local currency and devalued by 75%. In Iceland they were frozen for months and then very restricted.

    As time goes on a preference for real hard currency such as USD and GBP and precious metals becomes to the fore. High value items such as Rolex watches became popular in Iceland as they were the best way of getting cash out of the country.

    Credit and debit cards will be rejected at home and abroad, eventually debit cards start working first then, slowly credit cards.

    Foreign travel is restricted as converting local currency into hard currency requires special permission, proof of taxes paid and be limited based on requirement and daily spending limits, say £50/$50 per day. Iceland still has these limits three years later and Argentina 10 years later has just re-imposed them.

    The lesson from these two collapses are;
    Short term
    Ensure that you have a ready supply of cash in local and foreign currency to tide you over when the banks are shut; try and encourage your family to keep enough cash too

    Long term –

      Spread your risk and have a source of foreign income (hence the boom in buying London property by the Greeks etc).
      Put your money into hard assets (property in Argentina is basically worth the same as before in USD, based, however its directly proportional to wages. Holiday homes are pretty useless)
      Ideally convert a part of your wealth to precious metals.Personally I’m not so sure about this, its too late now.

    Obviously, even if you think its extremely unlikely to happen, have a stash or hard cash that will allow you to function until banks start operating, if its in a foreign currency like the £,$ or Euro even better. This should be enough for a week or longer.

  • #106718
    Profile photo of Chris McCarthy
    Chris McCarthy
    Participant

    @zoro wrote:

    Personally, I always wanted Britain to be in the Euro for selfish reasons i.e. holidays, foreign purchases etc. but I now see how wrong I was. The Euro is fundamentally flawed, which wasn’t a problem in the boom years but is a waking nightmare now. The Euro can only work long term if fiscal and political union in Europe becomes a reality. I see no way of that happening at this time.

    Yep, it is obviously a waking nightmare right now.

    The BBC links were very helpful and interesting tat each of the blog posts had over 450 comments, so we are obviously not the only ones debating this, and you make some other excellent observations as usual.

    But it seems the conclusion is… it is all down to Germany now.

    I just feel that we missed the boat somehow, we could have been Germany’s best buddy really.

    I am sad is what it is that we are so isolationist, and even more so that as you pointed out about the trade unions as an example that, really… we are not a United Kingdom are we?

    We are obviously not going to join the Eurozone, but if we looked outward and forward, we might be better off doing so.

    Eeeeh… I am in Spain this weekend, you know what, am going to go play some golf, with an American, a German, and an Irishman, and forget all of this for awhile!

  • #106720
    Profile photo of angie
    angie
    Spectator

    Chris, there must be a joke somewhere in that last line of yours! 🙂

    Blue skies and sun on the Costa del Sol today, chill out Chris on the Golf Course followed by your favourite tipples, Sangria and Cuba Libre 8)

    Those naughty Germans, are they wanting to conquer Europe again? 🙄

  • #106721
    Profile photo of peterhun
    peterhun
    Participant

    @Chris McCarthy wrote:

    I just feel that we missed the boat somehow, we could have been Germany’s best buddy really.

    I am sad is what it is that we are so isolationist, and even more so that as you pointed out about the trade unions as an example that, really… we are not a United Kingdom are we?

    Its not the UK’s fault, the Germans coordinated with George Soros to kick the UK out of the ERM which finished the UK entry to the Eurozone. They didn’t want the UK to be part of of it.

  • #106725
    Profile photo of Anonymous
    Anonymous
    Participant

    [quote=”Chris McCarthy”

    Yep, it is obviously a waking nightmare right now.

    The BBC links were very helpful and interesting tat each of the blog posts had over 450 comments, so we are obviously not the only ones debating this, and you make some other excellent observations as usual.

    But it seems the conclusion is… it is all down to Germany now.

    I just feel that we missed the boat somehow, we could have been Germany’s best buddy really.

    I am sad is what it is that we are so isolationist, and even more so that as you pointed out about the trade unions as an example that, really… we are not a United Kingdom are we?

    We are obviously not going to join the Eurozone, but if we looked outward and forward, we might be better off doing so.

    Eeeeh… I am in Spain this weekend, you know what, am going to go play some golf, with an American, a German, and an Irishman, and forget all of this for awhile![/quote]

    Nice one, Chris. I’m almost ashamed to say that I have the golf course opportunity on a daily basis, but I can add a Scotsman to the equation, and a Spaniard who cheats, but he’s a nice guy.

    I was debating on whether to reply to the Hun’s post, which I mostly agree with, but decided that yours gave me the opportunity to feel more cheerful on a Saturday evening.

    I’m considering selling my Spanish property to move sideways, it’s too big for me and the garden overwhelms me. I would, of course, lose a fortune on the values of those optimistic times of around six years ago, but this very afternoon I spoke to a fellow Brit who wants to sell his place, of the ideal size for what I want, just round the corner, for a price that made my eyes water, nicely.

    I wouldn’t even need to sell my place. The property world is going crazy. But at least I can stop looking in the direction of Turkey, it took me years to learn Spanish and I don’t want top start all over again on the other side of the Bosporus, no matter what the Turkish Lira falls to.

  • #106732
    Profile photo of peterhun
    peterhun
    Participant

    @Chris McCarthy wrote:

    But it seems the conclusion is… it is all down to Germany now.

    Here is another viewpoint, the Germanys see the cost of money print as too high.

    While the eurozone endgame is impossible to know, I still think the most likely outcome is that several of the peripheral nations will leave, re-denominating their debts in pre-euro currencies, so allowing the core countries to stabilise. This, I believe, is what Germany really wants.

    Scaling-back monetary union would take us to a better place, with the big eurozone economies no longer seemingly on the hook for everyone else’s debts.

    A downsizing would also be far more implementable, logistically and from a banking point of view, than dismantling the entire edifice. Attempting to do that, I fear, would end in financial chaos. It would also sow the seeds of recrimination and potential conflict across Europe for decades to come.

    http://www.telegraph.co.uk/finance/financialcrisis/8917915/It-is-now-becoming-clear-Germany-has-had-enough-of-this-euro-mess.html

    Its an argument that has a precedent, Germany kicking the UK out of the ERM (the author claims Germany stood idly by when, actually, they orchestrated it). The euro still makes sense to some countries, kick out the weak and the euro rise will reduce the cores debts. The peripheral will have debts in the new currency will follow the rise/fall. German will only have to support its own banks.

    Its going to be a blood bath.

  • #106733
    Profile photo of Anonymous
    Anonymous
    Participant

    On a sunny Sunday morning I chanced upon this article:

    http://www.spiegel.de/international/europe/0,1518,799173,00.html

    Most of it impressed me, and I’m of the same view; irrespective of what happens to the Euro in the short term, our young people are going to finally sweep away the old brigade who don’t understand what is happening in the world.

    In three to four years time, not a political dateline, the question will finally be asked in the new UK, it will be a simple one: In or out.

    The Europe Easyjet generation will vote to stay in an institution that badly needs changing, and they will change it.

  • #106734
    Profile photo of peterhun
    peterhun
    Participant

    Professor Garton Ash seems to make several assumptions about what will happen, all of which look unlikely or impossible.

    Fiscal Union? almost impossible. They couldn’t organise it when things were going well.There would have to be referendums and a strong desire to do so in many countries.
    There will therefore be a very much smaller Eurozone.
    Joining a smaller eurozone will be the choice, not a EU with full political and financial union.
    Joining the new Euro will be of even less relevant than it is to today.

  • #106738
    Profile photo of logan
    logan
    Participant
  • #106748
    Profile photo of peterhun
    peterhun
    Participant

    A core Euro with those who join agreeing to fiscal union looks like the preferred option from Germany. Sign these terms, now, or **** off.

    Germany and a few other countries basically dump the peripheral. Spain is probably out.

    It has to be quick so I can see this as probably the only thing that will work.

    So, out of the Euro –
    Greece, Ireland and Portugal, Italy and Spain and some east European countries such as Slovakia,

    http://uk.reuters.com/article/2011/11/27/uk-eurozone-crisis-idUKTRE7AQ0CJ20111127

    Germany, France examine radical push for eurozone

    BRUSSELS | Sun Nov 27, 2011 8:07pm GMT

    (Reuters) – Germany and France are exploring radical methods of securing deeper and more rapid fiscal integration among euro zone countries, aware that getting broad backing for the necessary treaty changes may not be possible, officials say.

    Germany’s original plan was to try to secure agreement among all 27 EU countries for a limited treaty change by the end of 2012, making it possible to impose much tighter budget controls over the 17 euro zone countries — a way of shoring up the region’s defences against the debt crisis.

    But in meetings with EU leaders in recent weeks, it has become clear to both German Chancellor Angela Merkel and French President Nicolas Sarkozy that it may not be possible to get all 27 countries on board, EU sources say.

    Even if that were possible, it could take a year or more to secure the changes while market attacks on Italy, Spain and now France suggest bold measures are needed within weeks.

    As a result, senior French and German civil servants have been exploring other ways of achieving the goal, one being an agreement among just the euro zone countries.

    “The goal is for the member states of the common currency to create their own Stability Union and to concentrate on that,” German Finance Minister Wolfgang Schaeuble told ARD television on Sunday.

    Another option being explored is a separate agreement outside the EU treaty that could involve a core of around 8-10 euro zone countries, officials say.

    An even more pressing decision faces euro zone finance ministers when they meet on Tuesday.

    Detailed operational rules for the euro zone’s bailout fund, the European Financial Stability Facility (EFSF), are ready for approval, documents obtained by Reuters showed. [ID:nL5E7MR0UA]

    The approval of the rules will clear the way for the 440 billion euro facility to attract cash from private and public investors to its co-investment funds in coming weeks, which, depending on interest, could multiply the EFSF’s resources.

    With Germany rigidly opposed to the idea of the ECB providing liquidity to the EFSF or acting as a lender of last resort, the euro zone needs a way of quickly calming markets, where yields on Spanish, Italian and French government benchmark bonds have all been pushed to euro lifetime highs.

    Policymakers hope progress towards tougher fiscal rules will also assuage investors. Schaeuble said a Stability Union could be a decisive step to winning more confidence from the markets.

    “That means that every euro zone member has to do its homework on its budget discipline. We want to ensure that through treaty changes,” he said.

    RADICAL OVERHAUL

    Reuters exclusively reported on November 9 that French and German officials were discussing plans for a radical overhaul of the European Union to establish a more fiscally integrated and possibly smaller euro zone.

    “The Germans have made up their minds. They want treaty change and they are doing everything they can to push for it as rapidly as possible,” one senior EU official involved in the negotiations told Reuters. “Senior German officials are on the phone at all hours of the day to every European capital.”

    While Germany and France are convinced that moving towards fiscal union – which could pave the way for jointly issued euro zone bonds and may provide more leeway for the European Central Bank to act forcefully – is the only way to get on top of the debt crisis, some other euro zone countries are unable or unwilling to move so rapidly towards that goal.

    Not only Greece, Ireland and Portugal, which are receiving EU/IMF aid, but also Italy and Spain and some east European countries such as Slovakia, would either find it difficult under current economic conditions to meet the budget constraints Germany wants, or simply do not agree with the aim.

    Consequently, the French and German negotiators are exploring at least two models for more rapid integration among a limited number of euro zone countries, with the possibility of folding that agreement into the EU treaty at a later stage.

    TWO MODELS

    One is based on the Pruem Convention of 2005, also known as Schengen III, a treaty signed among 7 countries outside the EU treaty but which was open to any member state to join and was later acceded to by 5 more EU states plus Norway.

    Another option would be to have a purely Franco-German mini-agreement along the lines of the Elysee treaty of 1963 that other euro zone countries could also sign up to, officials say.

    “The options are being actively discussed as we speak and things are moving very, very quickly,” a European Commission official briefed on the discussions told Reuters.

    One source said the aim was to have the outline of an agreement set out before December 9, when EU leaders will meet for their final summit of the year in Brussels.

    Sarkozy, who has made two speeches in the past two weeks highlighting the need for more rapid fiscal integration in the euro zone, and has acknowledged that it may be inevitable that a ‘two-speed Europe’ emerges, is due to make another keynote address on December 1 which could provide a platform for laying out in more detail the ideas that he and Merkel are developing.

    A senior German government official denied there were any secret Franco-German negotiations, but emphasised that both countries saw the need for treaty change as pressing and were exploring how to achieve that in the best way possible.

    “Germany and France are continuing to focus on proposals for a limited treaty change that can be presented at the EU summit in December,” the official said, emphasising that there was a need to act quickly to get changes in place.

    The ECB has bought the bonds of euro zone strugglers in intermittent fashion when they have reached crisis point. Economists say it has to act much more radically to turn the market tide but the central bank, and Germany, has opposed any such move. Commitments to binding fiscal rules by euro zone governments may be the cover it needs to change tack.

    “If this bond run is not stopped it will really endanger the stability of the European and even the global financial system. Bold action by the ECB is definitely needed,” Peter Bofinger, one of the five “wise men” who formally advise the German government on the economy, told Irish state broadcaster RTE.

    Reuters reported a similar possibility on Friday, with euro zone officials saying that if much tighter fiscal integration could be achieved among euro zone states, it would give the ECB more room to manoeuvre and buy sovereign bonds.

    While EU officials are clear about the determination of France and Germany to push for more rapid euro zone integration, some caution that the idea of doing so with fewer than 17 countries via a sideline agreement may be more about applying pressure on the remainder to act.

    By threatening that some countries could be left behind if they don’t sign up to deeper integration, it may be impossible for a country to say no, fearing that doing so could leave it even more exposed to market pressures.

    “Some of this is just part of the posturing you hear — it’s pressure from Germany to go for treaty change as quickly as possible,” the official involved in the negotiations said.

    “To some extent you have to see these ideas as part of the bargaining chips that are being put on the table.”

  • #106749
    Profile photo of Anonymous
    Anonymous
    Participant

    I’m a natural optimist and find life more rewarding that way. Monday is always a time of seeking good news for the week ahead, but it’s getting to be a struggle.

    I was hoping to be cheered by the Euro weakening against the pound Sterling; according to most commentators on this thread, if it doesn’t blow up altogether, the least it can do is decline decently.

    I’ve just checked, the Euro is strengthening against the pound. Is nobody listening? Somebody must be getting it wrong? (Me included).

    I’m also confused about the predicted riots. Where? Surely not in the UK again, we’ve just got over the last lot.

  • #106750
    Profile photo of peterhun
    peterhun
    Participant

    @Rocker wrote:

    I’ve just checked, the Euro is strengthening against the pound. Is nobody listening? Somebody must be getting it wrong? (Me included).

    I’m also confused about the predicted riots. Where? Surely not in the UK again, we’ve just got over the last lot.

    (Reuters) – The euro was firmer on Monday, but its advance appeared to run out of steam after the International Monetary Fund quashed a media report that it was preparing an aid package for Italy.

    The ‘market’ is a headless chicken. There was never any chance of this happening.

    Riots will only happen if banks stay shut for more than a week and I don’t think its likely. Europe (well, excluding Greece) isn’t like South America, the people will be pretty calm in my opinion.

  • #106751
    Profile photo of logan
    logan
    Participant

    Have no fear Rocker no financial commentator I have read can explain why the Euro continues to remain strong in these present circumstances. Even against the US Dollar it’s holding up quite well.
    All I can think of is that the ForeX markets believe a solution will ultimately be found to the EU crisis. Perhaps they are all optimists like you. 🙂
    A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty. Winston Churchill …

  • #106754
    Profile photo of DBMarcos99
    DBMarcos99
    Participant

    I think the markets are expecting 1 or 2 (or even 4) of the perceived weaker countries may need to leave the Euro, which would in effect leave an even stronger currency.

  • #106755
    Profile photo of peterhun
    peterhun
    Participant

    @dbmarcos99 wrote:

    I think the markets are expecting 1 or 2 (or even 4) of the perceived weaker countries may need to leave the Euro, which would in effect leave an even stronger currency.

    There are 17 countries using the Euro and the Germans are planning to have 8-10 left in their union.

  • #106760
    Profile photo of Chopera
    Chopera
    Participant

    I’m guessing that the fall in demand for euros from foreign investors is being compensated by an increase in demand for euros by European banks, as their credit lines dry up. As long as the ECB doesn’t print and people still believe the euro won’t break up in the short term then various deflationary pressure should mean that it remains fairly strong. Now I’ve said that the euro will probably start to lose value!

  • #106761
    Profile photo of peterhun
    peterhun
    Participant

    Now looking like a six nation EZ. Wonder if they will ask the UK to join?

    The conservative daily cited “high European Union diplomats” involved in fighting the sovereign debt crisis saying the Berlin government was nevertheless considering issuing bonds jointly with France, Finland, Netherlands, Luxembourg and Austria.

    The joint bonds could be used not only to finance borrowing for those six countries but also could be used to raise funds under strict conditions for countries such as Italy and Spain, the newspaper reported.

    The goal would be to stabilize the situation in the AAA countries as well as “building a credible firewall to calm the financial markets,” Die Welt said. The interest rate for the bonds should be somewhere between 2 and 2.5 percent — or only slightly above the level for German government bonds.

    The newspaper said the euro zone countries without AAA ratings should not be included initially.

    http://www.reuters.com/article/2011/11/28/us-eurozone-germany-eurozone-bonds-idUSTRE7AR0AH20111128

    and people still believe the euro won’t break up in the short term then

    Nobody believe the Euro can survive

    Even a few months ago I regarded a complete euro crackup as highly implausible. Now I’m having trouble finding a plausible story about how the thing survives.

    http://krugman.blogs.nytimes.com/2011/11/26/mysterious-europe/

  • #106763
    Profile photo of GarySFBCN
    GarySFBCN
    Participant

    All this news is distressing. What I do not understand is that Spain’s debt is not as bad as euro zone countries. Debt is what is pulling down (or should be pulling down) the euro, no?

  • #106765
    Profile photo of katy
    katy
    Spectator

    It is not just about the amount of debt it is the ability to pay it back.

  • #106767
    Profile photo of Anonymous
    Anonymous
    Participant

    It’s difficult to quote the Hun’s post, there are too many references, but I’m replying after reading the New York Times blog. One American commentator, probably one of the 70% without a passport, wrote that Eurozone leaders were inactive because they were waiting for the UK to come to the rescue, I think he actually wrote ‘coming to bail out the Euro’.

    Daft as it sounds (the comment), I’m not making fun of it; perhaps our cousin from across the Atlantic had a deeper meaning in mind. I’ve said it before, the UK could hold the key to Europe’s current problems, we’re a big country with a workforce that could be turned around to its former glory.

    If we were to wholeheartedly join in, the EU, Eurozone or whatever you want to call it, we could make a big difference, and soon. Our daft Eurosceptic minority is fading, but not fast enough, and not probably not timely enough to stop the rot.

    If we forget the nonsense about tiny countries on the periphery, like the Greeks who don’t pay their taxes, the big countries are Germany, France, the UK, Poland, Italy and Spain, those six alone (united) would hold their own against the other big players in the world, the US, Russia and China.

    Of course they would need a fiscal union, and the much trumpeted sovereignty would disappear down a drain where it belongs.

    Of course it’s not going to happen – all of us can look forward to waving our precious national flags at our respective soup kitchens.

  • #106768
    Profile photo of katy
    katy
    Spectator

    The eurosceptics are getting stronger, perhaps you are out of touch. Why would UK want to join more closely with a clapped out system. The UK doesn’t need Europe, it’s a myth. All the UK needs to do is throw out all those Europeans who are milking the benfits system.

  • #106770
    Profile photo of DBMarcos99
    DBMarcos99
    Participant

    On another site they’re quoting the OECD as predicting the UK is to go into a double dip recession, and unemployment to rise considerably. Heaven knows what they’re predicting for the likes of Spain, France or Italy. Something is seriously amiss.

  • #106771
    Profile photo of peterhun
    peterhun
    Participant

    @Rocker wrote:

    Daft as it sounds (the comment), I’m not making fun of it; perhaps our cousin from across the Atlantic had a deeper meaning in mind. I’ve said it before, the UK could hold the key to Europe’s current problems, we’re a big country with a workforce that could be turned around to its former glory.

    My thinking exactly. GDP from wiki
    Germany $3.2tr
    France $2.5tr
    Rest of bond countries about 1.3tr
    Total 7tr
    + UK $2.3tr = $9.3tr
    Whole EU $16tr

    If the UK joined in the bond with sterling it would stabilise the Euro and probably fix the interest rate at its current low rate. In Euros, anyway. Cameron is scared as he should be, this could save the UK, if the SHTF.

    I don’t think this is about saving the peripheral. FTSE is up 2.9%, doubt they realise its about saving the EZ core not basket cases like Italy. Having this bond will protect some countries at Euro break up, not all.

  • #106781
    Profile photo of peterhun
    peterhun
    Participant

    Seems the fact that this common bond is not about saving the PIIGS but protecting the core, is sinking in.

    Perhaps the thinking is that the auction will focus minds at the very top level in Europe and they will deliver a credible policy response to the debt crisis.

    Then again, with the positions of Germany, ECB etc, becoming more entrenched by the day, perhaps it won’t.

    http://ftalphaville.ft.com/blog/2011/11/29/770271/the-decline-and-inversion-of-italian-bonds/

  • #106786
    Profile photo of Anonymous
    Anonymous
    Participant
  • #106789
    Profile photo of Anonymous
    Anonymous
    Participant

    I listened to Osborne today, there’s nothing new there, some irrelevant actions which will change nothing, anywhere.

    Maybe nothing needs changing? Joerg Assmuson is the new head of the ECB in January, and he will not start the printing presses. He worries about inflation, maybe more than he should, like all Germans.

    We’ve got a big strike tomorrow, public sector pay is static and inflation is at five percent. And the Conservatives are surprised?

  • #106792
    Profile photo of angie
    angie
    Spectator

    I’ve never felt quite so pessimistic about the future as I do now for Europe, the UK and World economies. It’s all got far too messy, confused, an air of inevitability about it, an end game perhaps!

    No-one seems able to lead or come up with coherent ideas and strategy.

    The UK’s outlook is now far worse than thought, Osborne has not instilled any confidence it seems, some of the new measures will further fuel unrest in the UK, and generally the majority are going to find it hard to make ends meet.

    Civil unrest is growing worldwide.

    I say all of us on here head off to our own tropical island, I’m happy to be Prime Minister, and we will fish every day, pick fruits, raise a few pigs and chickens, plant seeds and play reggae and salsa music all day whilst discussing how the not so civilised western world went bankrupt and started fighting with themselves:roll:

    Ok, maybe not! 😥

  • #106793
    Profile photo of peterhun
    peterhun
    Participant

    Doesn’t look likely now…

    The left-leaning Die Tageszeitung writes:

    “The fans of ‘elite bonds’ appear unaware of how disastrous the consequences would be. The euro would be immediately dead — and would disintegrate into many individual currencies. That’s because the elite bonds would signal that Italy, Spain or Belgium will be dropped. These states would immediately go bankrupt because all investors would flee. Germany would not be unaffected by this chain reaction. German banks would have to write off most of their loans to debtors in the euro zone — and would become insolvent themselves. German exports would collapse and unemployment would increase. Some German citizens might find it tempting to feel special by having elite bonds — but unfortunately Germany itself would go bankrupt.”

    http://www.spiegel.de/international/europe/0,1518,800618,00.html

  • #106794
    Profile photo of Anonymous
    Anonymous
    Participant

    @angie wrote:

    I’ve never felt quite so pessimistic about the future as I do now for Europe, the UK and World economies. It’s all got far too messy, confused, an air of inevitability about it, an end game perhaps!

    No-one seems able to lead or come up with coherent ideas and strategy.

    The UK’s outlook is now far worse than thought, Osborne has not instilled any confidence it seems, some of the new measures will further fuel unrest in the UK, and generally the majority are going to find it hard to make ends meet.

    Civil unrest is growing worldwide.

    I say all of us on here head off to our own tropical island, I’m happy to be Prime Minister, and we will fish every day, pick fruits, raise a few pigs and chickens, plant seeds and play reggae and salsa music all day whilst discussing how the not so civilised western world went bankrupt and started fighting with themselves:roll:

    Ok, maybe not! 😥

    The Ponzi scheme of the permanent growth during the Baby Boomers generation is just coming to an end. The Western economies are based on consumption and permanent asset inflation. There are only few buyers now for overpriced shares or houses. Most of the money has gone, we all need to learn to live with less money and to be happy with less luxuries.
    It might lead to a much better society for our children generation, with less depressed people…

  • #106801
    Profile photo of peterhun
    peterhun
    Participant

    @angie wrote:

    I say all of us on here head off to our own tropical island, I’m happy to be Prime Minister, and we will fish every day, pick fruits, raise a few pigs and chickens, plant seeds and play reggae and salsa music all day whilst discussing how the not so civilised western world went bankrupt and started fighting with themselves:roll:

    Ok, maybe not! 😥

    You are right.

    What will Britain feel like?

    Miserable. And for a long time. No government since demobilisation has planned such deep spending cuts and such a long period of sluggish growth.

    http://www.ft.com/cms/s/0/6dd8e136-1a9f-11e1-ae4e-00144feabdc0.html

    Its a good plan. I’m looking at buying a tractor, hiding out on the farm and growing Garlic.

  • #106804
    Profile photo of Anonymous
    Anonymous
    Participant

    I’m trying to find out how long you can survive on fresh oranges, I have plenty growing in my garden and all around me too.

    I mean, you’ve got ample liquid sustenance and some solid food, all year round.

    The leaves look just like some other leaves I’ve seen, but I’ve never tried rolling them. A Spanish neighbour in the next street grows some funny looking plants and he’s the happiest guy I’ve ever met, he’s always smiling. Mind you, his hand-rolled cigarettes smell a bit funny.

    He drives an S class Mercedes.

  • #106808
    Profile photo of peterhun
    peterhun
    Participant

    Rocker, sell the oranges, then you can live as long as you like on the money.

    Stock markets loved the intervention today. I don’t find it very comforting to know one of the big French banks was saved from doing a Lehman Brothers — crashing the world economy again.

    Its like those spining plate acts. How long can they keep it up?

    It appears that a big European bank got close to failure last night. European banks, especially French banks, rely heavily on funding in the wholesale money markets. It appears that a major bank was having difficulty funding its immediate liquidity needs.

    The cavalry was called in and has come to the successful rescue.

    The Federal Reserve, the Bank of England, European Central Bank, the Bank of Japan, the Swiss National Bank, and the Bank of Canada in a coordinated action moved to provide liquidity to the global financial system.

    http://ftalphaville.ft.com/blog/2011/11/30/773851/warning-financial-comet-spotted/

  • #106809
    Profile photo of peterhun
    peterhun
    Participant

    Britain has entered second credit crunch, confirms Downing Street

    Britain has entered a second credit crunch, Downing Street said on Wednesday night, as America was forced to intervene to stop the eurozone crisis leading to a global financial collapse.

    http://www.telegraph.co.uk/finance/financialcrisis/8927148/Britain-has-entered-second-credit-crunch-confirms-Downing-Street.html

    24hours later the mainstream media figure it out.

    FY says:

    The almost-useless DJ Industrial Average on Wednesday climbed nearly 500 points – its largest one day gain since March 2009 – returning it to positive territory for 2011

  • #106810
    Profile photo of Anonymous
    Anonymous
    Participant

    A major French bank nearly failed and the Yanks had to ride to the rescue, sending the DJ soaring. You couldn’t make it up, could you?

    My little heart was beating faster this morning and I momentarily forgot about picking my oranges. The Euro is bound to fail and even mighty Germany can’t borrow money. The pound Sterling is bound to be a safe haven, isn’t it?

    It was still dark when I gingerly went into my favourite exchange site. I couldn’t believe it, the pound is falling!

    I went into another site in case the nasty Chinese had hacked this one. That also showed the pound falling. Perhaps a cyber war has broken out and all the financial sites have been hacked.

    Now that would make sense to me, of course the Yanks haven’t saved the French, they wouldn’t, look what they did to that poor DSK, they stuck him in an orange jump suit and sent him to Rikers Island.

    Let’s hope Symantec can sort out these hackers soon and we can start to hear the truth again.

  • #106811
    Profile photo of Chopera
    Chopera
    Participant

    @Rocker wrote:

    A major French bank nearly failed and the Yanks had to ride to the rescue, sending the DJ soaring. You couldn’t make it up, could you?

    My little heart was beating faster this morning and I momentarily forgot about picking my oranges. The Euro is bound to fail and even mighty Germany can’t borrow money. The pound Sterling is bound to be a safe haven, isn’t it?

    It was still dark when I gingerly went into my favourite exchange site. I couldn’t believe it, the pound is falling!

    I went into another site in case the nasty Chinese had hacked this one. That also showed the pound falling. Perhaps a cyber war has broken out and all the financial sites have been hacked.

    Now that would make sense to me, of course the Yanks haven’t saved the French, they wouldn’t, look what they did to that poor DSK, they stuck him in an orange jump suit and sent him to Rikers Island.

    Let’s hope Symantec can sort out these hackers soon and we can start to hear the truth again.

    The pound as has been trading at between 1.10 and 1.20 to the euro for over 3 years now, and between 1.12 and 1.17 for the last 6 months. At the time of writing this it still contionues to do so.

  • #106812
    Profile photo of angie
    angie
    Spectator

    It’s all a bloody farce, it’s getting hysterical now, what on earth will the cretins do when we have a real World problem, start firing off nuclear rockets at banks and each other?? 😆 Meanwhile they will all collect their huge pay cheques for incompetence and negligence 👿

    Chris may eventually be proved right that the Euro will survive, but it will be ‘by hook or by crook’ there’s no natural order about it. It doesn’t deserve to though, and these a


    s should be all be banged up in jail, including the UK’s Forge Osborne, Rabid Ca-moron, Wince ‘cuts no’ Cable, Mervyn ‘Liar King’, Hector Pants (FSA), the Previous Muppets George Dirty Brown, Alastair not my Darling.

    Don’t get me started on the European Leader crooks too, my hackles are rising, steady steady, ah that’s better 😉

  • #106814
    Profile photo of logan
    logan
    Participant

    I have no doubt whatever the Euro will survive but it shouldn’t. It will survive because when Germany is faced with a choice of it’s total demise or printing money they will choose the latter. They will do that because for Germany the prerogative of an integrated political Europe must continue, whatever the cost in economic terms. Postwar French and German intellectual political thinking has all been directed to that one aim. There is for them simply no alternative, no plan B.
    Put quite simply if the Euro fails so does the entire European project and that for generations of European politicians is unthinkable.

  • #106816
    Profile photo of zoro
    zoro
    Participant

    The Euro in it’s current form might just about survive the current crisis if indeed Germany does give in and pay up but in the longer term I just can’t see how it can be successful.

    It’s hard to see how the likes of the PIIGS and others can compete with Germany in the long term unless they have the freedom to become a low cost economy by dint of exchange rate differentials. So long as Germany can keep benefiting from a cheaper than it should be currency whilst it is stll stronger than it should be for the PIIGS Germany’s advantage will be unassailable.

    I think that there should be at least two varieties of the Euro, both managed by the ECB, with a fixed exchange rate between them. Each country could be in the one that suits them. As and if their economies improve or weaken they can move between the two in a managed way i.e. effectively undergo a devaluation or revaluation.

    If fiscal and political union ever happens then the two Euros could become one again.

    OK I’m dreaming, but I think it would work; and go some way to fixing the underlying problems that are not currently being addressed.

  • #106817
    Profile photo of logan
    logan
    Participant

    No not dreaming Zoro. Your solution is one of three scenarios generally accepted in financial communities as possible and credible options.
    The other two are ECB prints money and moves to fiscal union, doubtless it would be given another name, like QE. Or complete break up of the Euro and return to national currencies.
    Since that is the nuclear option which I don’t think will happen, your scenario may just be more than a possibility.
    Sarkozy is due to announce his grand solution later today.
    New treaties to include fiscal union are on the cards. However that’s only a another half baked measure. It will not solve the crisis, only German capitulation can do that and ‘Mutti’ is not for turning. 🙁

  • #106819
    Profile photo of peterhun
    peterhun
    Participant

    @logan wrote:

    I have no doubt whatever the Euro will survive but it shouldn’t. It will survive because when Germany is faced with a choice of it’s total demise or printing money they will choose the latter. They will do that because for Germany the prerogative of an integrated political Europe must continue, whatever the cost in economic terms.

    I’m no longer convinced that Germany wants the Euro to continue with the insolvent members. I read in Speigel a discussion of the cost to Germany to be 250billion in the first year, rapidly decreasing to nil in the following three years.
    Alongside was an article saying Germany’s exports had hit 1Trillion.

    The general feeling among Germans was the collapse of the Euro won’t be too bad and better than a devaluation/inflation.

    I’m convinced they and a few other countries will leave the EU/Euro and rejoin the EU with a new currency based on fiscal union and strong rules. The bond system will be part of it.

    The failure of the German Bond issue was a sign of the fact than the PIIGS will sink Germany too if it tries to bail them out. Germany is just as self interested as the UK.

  • #106821
    Profile photo of kgpoc
    kgpoc
    Participant

    You are a sour group of grapes these days 😀 Sorry people, I don’t buy your reasoning!

    First, look at Germanys past posturing for 2 years now. They have said ‘NO’ to everything, then gone back and allowed it, and Merkel has survived every challenge, even in the courts. So far they look no stronger than a Gummy Bear (remember what mummy said – actions speak louder than words)

    Second, Germany needs a low currency. They will be worth very little to the EU and vice a verse if their economy, especially their GDP growth and exports slow. By themselves their currency is worth about 2X (or more) than the USD, can they survive 40% or 50% currency increase – NO

    Third, a weak country leaving (I am not talking Greece, that is a no brainer, their effects are assessed and in most valuation models) I am talking either Italy or Spain (like people are commenting here). What is the effect of loosing one of those? Well again, you will have to rescue the Banks 5 or 10 times more but there is another effect much greater! There are many subsidiaries of companies here and a sudden drop in those countries new currency’s will infect good Germany companies balance sheets. Case in point Mercedes own a huge plant here in Vitoria, write down the asset by 50%, (Just one little example), that changes their capital structure, you in effect will increase their cost of capital and they will get downgraded in a second.

    Germany is effectively choosing the lesser of numerous crap choices. I agree that things are flawed by the current set up, but these flaws can be ironed out. Germany will try and hold the EU together very much as is.
    Note: None of my discussion is about Greece, that is cooked and accounted for. Now for every bad example of a country getting into trouble, don’t forget Ireland took their medicine and is not faring too bad.

  • #106822
    Profile photo of Anonymous
    Anonymous
    Participant

    The simple fact is that Germany can’t do what the rest of the world is asking, it’s against its constitution. The highest court in their land at Karlsruhe forbids it.

    Mutti can appeal, but she is unlikely to win, and it will take years to finally come before those eleven judges in their funny robes.

  • #106823
    Profile photo of logan
    logan
    Participant

    [quote=”kgpoc”
    Germany is effectively choosing the lesser of numerous crap choices. I agree that things are flawed by the current set up, but these flaws can be ironed out. Germany will try and hold the EU together very much as is.
    [/quote]
    I realise politically that is the best case option for Germany and one of course they would much prefer.
    However it’s simply not doable in the short to medium term. The Euro crisis is a solvency issue. Italy, Spain, Ireland, Portugal and Greece are basically insolvent. They can only function through borrowing and can only do that and service their existing debts at ruinous rates. The ECB has only a limited capacity to buy up their bonds unless Germany relents.
    In 2012 most of these countries need a huge additional borrowing requirement for maturing debt. Italy alone is €300bn. This just to maintain their current position. That’s insolvency.
    Unless their GDP miraculously rises in the coming near term they are stuffed.
    Merkle has indicated she is not prepared to help and allow QE; so for the Euro area maintaining financial stability within the current status quo is impossible. You simply cannot tough this one out and they know it.
    Something drastic has to give and realistically the three options previously discussed here are all there really is.

  • #106824
    Profile photo of peterhun
    peterhun
    Participant

    Germany is looking at the 1-2Trillion billion to bail it out or 250billion to let it fail. Removing the unsuitable members, allowing them to devalue and enforcing must stricter rules for re-entry will make it much stronger for the future.

    Which do you think they will choose?

  • #106825
    Profile photo of logan
    logan
    Participant
  • #106827
    Profile photo of kgpoc
    kgpoc
    Participant

    Logan – This 10 day call is a lark and typical. All goal posts have been moved to date, so it will be done again. And markets punishments of bad EU policy moves seldom occur on the exact days when they are telegraphed, due to the over crowding of the trade.

    Logan – Solvency of everyone other than Greece, no one in that group is insolvent. Italy for example, if they have access to 3% capital and can stick to reforms, guess what they will lower their Debt to GDP (even without growth). They just need low rates and time; hence ‘kicking the can’ is not a completely dire outlook. There is a ton of liquidity in the world, with growth in the world of 3% not all the money can chase it, so there is money available to fund these countries, they just need a little confidence. The market showed that Italy is solvent when they floated a full auction at 7%. Insolvency demands 20%-30% or more, look at Greece.

    Rocker – As for the legal ramifications, everyone was certain that the German courts would win against the EU & ECB due to the move of buying bonds and guess what, the courts could not. The way the treaty is written, the ECB principle mandate is to stabilize prices (economic terminology). Courts are going to have a tough time proving the reverse side of any of the ECB moves, so I suspect the ECB will go much much further, before they are pulled up again. I agree and believe someone will be able to use the German courts to stop some of this but the time lag will be very long, giving the ECB time.

    Peterhun – you are quoting numbers on 2 sides of an equation, but the equation is not equal. On the Trillions (Roubini’s et al numbers) is a leveraged amount and does not mean lost, so can be pay back. On the other side, quoting of the 250 Billion, that is a guaranteed loss. Now I would also put that 250 billion as very light, that would be the loss just from say Deutsche not to mention all the other banks. So the government budget shows money going to ‘work’ as an investment or they write down losses in the billions now, we all know what a European government prefers to do in that case.

    I think I was just vindicated – Rick Santelli on CNBC (he is a tough capitalist thinker – I do not agree with his views in general, too cut and dried for Profit) just stated that Germany will do everything to hold the ECB together as is, not because they are nice, but because they need the currency low to keep it’s economy going. Also any current talk about about possible breakup helps them out further, by buying more time with the currency staying lower..

    I’m an optimist, not blind – just in case you were wondering! 🙂

  • #106828
    Profile photo of peterhun
    peterhun
    Participant

    “On the Trillions (Roubini’s et al numbers) is a leveraged amount and does not mean lost, so can be pay back.”
    Not as simple as that. Taking on Italy and Spains debt will mean Germans borrowing cost zoom up. Plus, with their economy it will NEVER be paid back. Germany could profit on the spread however.

    You can hope. But when you think about from the Germans view point its stupid; take on the debt of a couple of basket cases that the markets don’t even want to touch…

  • #106829
    Profile photo of logan
    logan
    Participant

    I respect your views kgpoc, and have agreed with many of your posts but in this I think you are wrong.
    Here is what an ECB report said about Italy’s position in early November 2011.
    The risks of a full-blown sovereign liquidity crisis can increase rapidly in the absence of a determined policy response … Persistently high interest rates increase the risk of a self-fulfilling ‘run’ from Italy’s sovereign debt. A liquidity crisis could then turn into a solvency crisis, whose repercussions for other large euro area countries would be very acute given their exposure to the Italian economy.”
    On Tuesday 29th November Italy raised €7.5bn on the bond markets, but at exorbitant rates above the 7% sustainability threshold. I do not understand why you think that level of debt interest is a vote of confidence. 😯
    My suggestion that Italy is insolvent is based upon the unsustainable debt mountain of 120% of GDP and the current market levels of interest demanded for new debt. By any standard that indicates insolvency.
    Monti may come up soon with an austerity plan that may convince the markets but unless the IMF also intervenes with substantial aid Italy is toast

  • #106830
    Profile photo of Anonymous
    Anonymous
    Participant

    I’m replying to kgpoc, quoting the post would limit me to a three word reply.

    I’m only reiterating an earlier post which hasn’t been understood. Mutti is a politician who is revelling in the current glory of being the most powerful politician in Europe, a far cry from her communist roots in East Germany.

    But united Germany has a constitution, the same as the US and other democracies not restricted by out-of-date monarchies like the UK.

    The German constitution lays down rules that cannot be changed unless there is a national referendum, at least.

    Mutti cannot authorise a German bail out of southern Europe, much as she would like to, as would make sense to, it’s against German law.

    All she can do is kick the can a bit further, like the rest of the Eurozone, and it’s not enough to solve the problems. The markets don’t like can kickers, and mayhem awaits.

  • #106832
    Profile photo of peterhun
    peterhun
    Participant

    @Rocker wrote:

    But united Germany has a constitution, the same as the US and other democracies not restricted by out-of-date monarchies like the UK.

    The German constitution lays down rules that cannot be changed unless there is a national referendum, at least.

    Thanks for immediately contradicting your…. comment. Constitutions are restrictive – the US one is two hundred years old, making their legal system and government unworkable.

    Germany’s constitution prevents them saving their economy, imposed by the USA. I’ll stick to a monarchy, the UK government can do what is necessary when it necessary instead of sticking to rules imposed hundreds of years ago.

  • #106833
    Profile photo of logan
    logan
    Participant

    Good report on Merkle’s speech this morning here. Fiscal union is coming.
    http://www.guardian.co.uk/business/blog/2011/dec/02/eurozone-crisis-cameron-sarkozy-merkel

    Quote:She adds the German constitution does not permit devolving budget control to a European institution and that any discussion about euro bonds is therefore pointless.

    Seems Rocker’s point is correct.

  • #106834
    Profile photo of angie
    angie
    Spectator

    Great news today, the Merkozy gang have saved the World again from financial diaster(2nd time in months), and Britains’ blue boy Cammy is visiting Sarky again to have his say, what a load of cobblers 😆

    This means that every Eurozone resident will receive a cheque for £250k in the post and Spanish property will double in price by the weekend 😆

  • #106835
    Profile photo of peterhun
    peterhun
    Participant

    They are not going to save the world. Merkel keeps saying it and it seems the Germans really mean it.

    Here’s a chart of probability of default in the next five years, from the Bank of England. Greece is 100% certainty

  • #106836
    Profile photo of angie
    angie
    Spectator

    Oh Peter I’m shocked, I really thought they had saved the World 😆

    There’s as much chance of that as me being the UK’s next Prime Minister 😆

  • #106847
    Profile photo of DBMarcos99
    DBMarcos99
    Participant

    Cameron’s in Paris today, to see what he can do to help. Believe it or not he’s terrified that the Euro doesn’t succeed – it will bring down the UK economy if things unravel. Nervous times for us all.

    http://www.bbc.co.uk/news/uk-politics-15997709

    I understand also Nick Glegg is in Madrid today talking to Sr Rajoy.

  • #106850
    Profile photo of kgpoc
    kgpoc
    Participant

    logan – thanks man, I agree with and respect yours and everyones posts on here too! This thread is definitely an interesting one, especially seeing as it is unfolding far faster than the house price decline/resolution most of us would like to see.. 🙂

    As for Merkles speech – the German ‘position’ is going to fold like a deck chair on a cruise ship. I have never seen politicians actually working and sweating for their pay, so this is entertaining! Just think about what you are seeing unfold in politics here in Europe. A unanimous decision in the Italian parliamentary, to hand over the government to neither of the majority parties – cart blanche. Spanish PP, Absolute Majority to the harsher more Republican group, not the ‘defenders’ of people rights. Over the last 30 – 40 years it has been very easy to call a European outcome, especially if one of them meant giving some thing up! Now I wouldn’t call that or bet against it!

    I take this more naive line on the EU because I was reminded of the interconnectivity of Europe last weekend on a visit to beautiful Seville. One of the most famous of Emperors of Britain (at least the bottom half) Hadrian, was Born there and he built a structure that stands 2000 years later.

  • #106853
    Profile photo of peterhun
    peterhun
    Participant

    @dbmarcos99 wrote:

    Cameron’s in Paris today, to see what he can do to help. Believe it or not he’s terrified that the Euro doesn’t succeed – it will bring down the UK economy if things unravel. Nervous times for us all.

    It will bring down the entire world, China included.

  • #106856
    Profile photo of GarySFBCN
    GarySFBCN
    Participant

    I’ll stick to a monarchy, the UK government can do what is necessary when it necessary instead of sticking to rules imposed hundreds of years ago.

    Yes, maybe they can marry-off another ‘royal’ to stimulate their economy though commemorative plate sales and other wedding-related trinkets. I didn’t know that any intelligent people who support monarchy existed. Thanks for the enlightenment.

  • #106860
    Profile photo of peterhun
    peterhun
    Participant

    @garysfbcn wrote:

    Yes, maybe they can marry-off another ‘royal’ to stimulate their economy though commemorative plate sales and other wedding-related trinkets. I didn’t know that any intelligent people who support monarchy existed. Thanks for the enlightenment.

    The monarchy is a profitable export business for the UK, nothing else, its not had any political power for hundreds of years. You Americans are told a whole load of crap about it to cover up for the fact that you wanted to go on a genocidal invasion of the continent.

    On Topic:

    Poland and Sweden have been invited to the Fiscal Union discussion. It would be nice to think the UK could join but its finances, like the PIIGS, are in such a mess that it will be years away. Like a end to the crisis, which is going to years away while the PIIGS try to sort themselves out with NO help from the Fiscal Union members (aka the New Euro)

    “Jacques Delors: Euro doomed from the start”

    http://www.telegraph.co.uk/finance/financialcrisis/8932647/Euro-doomed-from-start-says-Jacques-Delors.html

  • #106865
    Profile photo of logan
    logan
    Participant

    That’s rich coming from Delors. He’s the one along with Helmut Khol who were the architects of the Eurozone mess in the first place.
    Blaming others for his f**k up’s is just typical of the man. When he had the power to influence the course of events he did nothing.
    He’s a left wing French socialist with a daughter who is deputy to the socialist front runner Hollande. He’s simply playing politics for the forthcoming French elections and heaping as much blame on Sarkozy as they possibly can.

  • #106867
    Profile photo of Anonymous
    Anonymous
    Participant

    @peterhun wrote:

    @garysfbcn wrote:
    Yes, maybe they can marry-off another ‘royal’ to stimulate their economy though commemorative plate sales and other wedding-related trinkets. I didn’t know that any intelligent people who support monarchy existed. Thanks for the enlightenment.

    The monarchy is a profitable export business for the UK, nothing else, its not had any political power for hundreds of years. You Americans are told a whole load of crap about it to cover up for the fact that you wanted to go on a genocidal invasion of the continent.

    On Topic:

    Poland and Sweden have been invited to the Fiscal Union discussion. It would be nice to think the UK could join but its finances, like the PIIGS, are in such a mess that it will be years away. Like a end to the crisis, which is going to years away while the PIIGS try to sort themselves out with NO help from the Fiscal Union members (aka the New Euro)

    “Jacques Delors: Euro doomed from the start”

    http://www.telegraph.co.uk/finance/financialcrisis/8932647/Euro-doomed-from-start-says-Jacques-Delors.html

    Sweden will not join in a million years so I’m not sure what they are trying to get at. About 56% voted against the euro in 2003 when everything was running well. Today about 85% is against joining. Even a majority wants to leave the EU which and revert it back to a free trade org only with free corporation between the states.

  • #106879
    Profile photo of peterhun
    peterhun
    Participant

    This won’t be the Euro, it would be a new Fiscal Union, without shared debt..

    Exactly what it will be we don’t know but the objections against the old Euro should not apply. So I would keep an open mind.

  • #106880
    Profile photo of logan
    logan
    Participant

    @peterhun wrote:

    Exactly what it will be we don’t know but the objections against the old Euro should not apply. So I would keep an open mind.

    Fiscal union means the complete surrender of national sovereignty to German economic thinking and the rendering of national parliaments to that of a parish council.
    Germany or the new Euro Treasury will have power over national budgets and spending and will likely be based in Frankfurt and staffed by old Bundesbank functionaries. Member countries will be given a national budget to conform to or else.
    It means the total dominance of Europe by a new undemocratic entity with the power to control the politics of peripheral states and it’s peoples aspirations.
    If they all sign up for it on that basis and they will be told there is no other choice to save the Euro, they deserve all they will get.

  • #106882
    Profile photo of Anonymous
    Anonymous
    Participant

    With so much conflicting news about the Euro at the moment, I may have misheard a news item which stated that bookmakers were laying odds of only three to one on the Euro crashing before Christmas – this one.

    Apparently the odds were ten to one only a month ago.

    It could all happen next Friday.

    (I got a bank statement yesterday which showed the balance both in Euros and Pesetas).

  • #106884
    Profile photo of katy
    katy
    Spectator

    All our bills in Spain showed the rate in pesetas too, even the utility companies. Our Gardener used to calculate hours x pesetas per hour then convert to euros 😆 Would be a real shambles converting all the prices back!

  • #106885
    Profile photo of GarySFBCN
    GarySFBCN
    Participant

    With so much conflicting news about the Euro at the moment, I may have misheard a news item which stated that bookmakers were laying odds of only three to one on the Euro crashing before Christmas – this one.

    A lot of the news is politically motivated and has no rooting in reality. I’ve liquidated everything ‘European’ and am waiting for things to settle before I re-invest. I may lose a little, but that is better than losing everything. Of course, it leaves me vulnerable, less geographically diversified, with investments limited to the US, Brazil and Asia.

  • #106887
    Profile photo of logan
    logan
    Participant

    @garysfbcn wrote:

    with investments limited to the US, Brazil and Asia.

    Best place to be Gary, no worries. 😀

  • #106889
    Profile photo of peterhun
    peterhun
    Participant

    @logan wrote:

    @peterhun wrote:
    Exactly what it will be we don’t know but the objections against the old Euro should not apply. So I would keep an open mind.

    Fiscal union means the complete surrender of national sovereignty to German economic thinking and the rendering of national parliaments to that of a parish council.
    Germany or the new Euro Treasury will have power over national budgets and spending and will likely be based in Frankfurt and staffed by old Bundesbank functionaries. Member countries will be given a national budget to conform to or else.
    It means the total dominance of Europe by a new undemocratic entity with the power to control the politics of peripheral states and it’s peoples aspirations.
    If they all sign up for it on that basis and they will be told there is no other choice to save the Euro, they deserve all they will get.

    Maybe. However its could be simple targets, such as maximum rates of borrowing versus GDP. Germany has this I believe, as does Poland – it cannot go over 55% borrowing without automatic cuts and its enshrined in the constitution. This limit is self imposed. The UK has done something similar with an independent BoE and Office for Budget Responsibility. Standardizing and normalising this between nations is not undemocratic.

    I really thing you should wait to find out what is proposed before jumping to conclusions.

    A series of short articles illuminating why German will not be bailing out the PIIGS with EuroBonds

    http://www.spiegel.de/international/germany/0,1518,801388,00.html

  • #106892
    Profile photo of logan
    logan
    Participant

    There can be no compromises with fiscal union, we already know the consequences.
    Pimco states fiscal union or bust.
    http://www.telegraph.co.uk/finance/financialcrisis/8933250/Eurozone-debt-crisis-its-fiscal-union-or-bust-says-Pimco.html
    Quote:
    The German chancellor has vowed to create a “fiscal union” and signalled an uncompromising push for treaty changes at the summit. She made it clear that eurozone states would be called upon to relinquish economic sovereignty and be subjected to close central supervision, a prerequisite for the eurozone to secure vital extra financial help.

    So European sovereign states sign up, surrender their independence, do as they are told or else, what a choice. There is going to be blood on the carpet before this is over that’s for sure.

  • #106894
    Profile photo of DBMarcos99
    DBMarcos99
    Participant

    @logan wrote:

    There can be no compromises with fiscal union, we already know the consequences.
    Pimco states fiscal union or bust.
    http://www.telegraph.co.uk/finance/financialcrisis/8933250/Eurozone-debt-crisis-its-fiscal-union-or-bust-says-Pimco.html
    Quote:
    The German chancellor has vowed to create a “fiscal union” and signalled an uncompromising push for treaty changes at the summit. She made it clear that eurozone states would be called upon to relinquish economic sovereignty and be subjected to close central supervision, a prerequisite for the eurozone to secure vital extra financial help.

    So European sovereign states sign up, surrender their independence, do as they are told or else, what a choice. There is going to be blood on the carpet before this is over that’s for sure.

    Well, this is all very interesting stuff. Some thoughts

    i) I suspect the new Eurozone will still have a strong currency. We see now why the pound hasn’t made any recent advances, despite all the euro gloom
    ii) Some countries may prefer not to sign up, and leave the Euro currency. As yet we don’t know exactly how many. Greece is almost definitely out. but we are not 100% sure on the likes of Italy and Spain.
    iii) Those countries that do leave will have an initial bumpy 6 months, but then should have an economic mini-boom with a devalued currency.

    My hunch was that Spain would choose to leave, especially if both Greece and Italy take this route. But it’s by no means certain. I suspect we’ll know within weeks.

  • #106895
    Profile photo of logan
    logan
    Participant

    Yes, and when are the electorate of Europe going to have their say?
    A treaty change such as this which changes the structure of Europe must surely be ratified in a referendum by every nation.
    I just cannot see the Irish for example, who fought so long for an independent nation are going to sign up for this.

  • #106928
    Profile photo of peterhun
    peterhun
    Participant

    Confirmed: Not Just AAA Nations, but *All 17* Euro Nations to Be Put on Notice for Downgrade

    The earlier FT report suggesting AAA nations would be put on notice knocked the Dow from 150 to about 70. This one has knocked the market still lower — the Dow is now up just 40 points. The 10-year Treasury note still yields about 2.05%.

    Update: Nicole Lundeen reports:

    The 17 nations of the euro zone will be placed on credit watch negative by Standard & Poor’s Rating Services, according to a person familiar with the matter.

    The ratings firm is expected to make an announcement after the market closes in New York at 4 p.m. EST.

    S&P is expected to cite the difficulties of the euro region in containing its debt crisis. The decision to put the countries on negative credit watch– which signals a downgrade within 90 days has 50-50 odds–would hit six countries with the rating firm’s highest, triple-A rating: Germany, France, the Netherlands, Austria, Finland and Luxembourg.

    A spokesman for Standard & Poor’s declined to comment, saying, “We never comment about market rumors about our ratings.”

    http://blogs.wsj.com/marketbeat/2011/12/05/confirmed-not-just-the-aaa-but-all-17-euro-nations-to-be-put-on-notice/

    Maybe Germany will soon be approaching the UK for a bailout.

  • #106929
    Profile photo of katy
    katy
    Spectator

    http://www.diariosur.es/rc/20111205/espana/rajoy-mantiene-hermetismo-tras-201112051507.html#disqus_thread

    Rajoy has told merkel and Sarkozy they can count on Spain even though he doesn’t know the small print yet! Grovel, grovel, rent a vote 🙄

  • #106935
    Profile photo of logan
    logan
    Participant

    I agree, Spanish governments of whatever colour just lie on their back and have their tummy tickled by Germany and France. They will give up anything to part of what the Spanish wrongly perceive as ‘good for Spain’.
    Whatever happened to a proud independent nation? 🙁

  • #106937
    Profile photo of peterhun
    peterhun
    Participant

    @logan wrote:

    Whatever happened to a proud independent nation? 🙁

    It died when they joined the EU, not the Euro.

    No fiscal union, no Eurobonds, no ECB as lender of last resort – yet.

    Just the usual blather and a revamped Stability Pact (Fiskalunion).

    Yawn.

    Merkel seems to have backed off on demands that budget breaches will be justiciable before the European Court, so the Treaty chatter is mostly Quatsch, bêtises, and eyewash.

    This Merkel climb-down makes it less likely that she will give in on real rescue measures, so why the market exuberance in Italy? Beats me.

    Private investors will not have to face further haircuts after Greece (if you believe anything they say on this subject) but that was already the case.

    Nothing further to add at this stage.

    http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100013624/zilch-again-form-merkozy/

  • #106938
    Profile photo of logan
    logan
    Participant

    @peterhun wrote:

    It died when they joined the EU, not the Euro.

    I don’t agree Peter. The original European concept did not involve loss of sovereignty or control of the economic levers of power. It was originally just simply a trading block between sovereign nations and should have remained so.
    The gradual slide into the creation of a super state then began with more and more power being conceded to Brussels.
    Politicians made agreements and treaties with the excuse that the single market would or could not work without this particular concession or that particular agreement. Few questioned that thinking, nobody wanted to rock the boat.
    It has become a drip, drip effect that the European electorate has had no real participation in.
    Until finally the creation of the Eurozone and single currency where members surrendered any last bit of national independence they had left.

    Had they at the time of the Euro creation been able to force through full blown fiscal union they would.

    The truth is the ‘European Project’ as they so often like to call it is the slow creation of a super state with Germany dominating at the top and calling the shots. Even Sarkozy seems to have fallen into line now because of his impending election and the need to appear co-operative with Germany.

    This domination has been made even more transparent during this financial crisis. No consultation with any meaning between other nations, just Merkozy telling the other states what to do or else.
    Sarkozy even tried it with David Cameron recently, such was his frustration and inability to push Britain around.

    When the history of the European single super state comes to be written, historians will wonder how on earth sovereign nations with a proud independent history ever hoodwinked their people into joining and participating in it.

    That is if it does not impload before hand which seems very likely and as far as I am concerned it cannot come soon enough.

  • #106955
    Profile photo of Anonymous
    Anonymous
    Participant

    @logan wrote:

    @peterhun wrote:
    It died when they joined the EU, not the Euro.

    I don’t agree Peter. The original European concept did not involve loss of sovereignty or control of the economic levers of power. It was originally just simply a trading block between sovereign nations and should have remained so.
    The gradual slide into the creation of a super state then began with more and more power being conceded to Brussels.
    Politicians made agreements and treaties with the excuse that the single market would or could not work without this particular concession or that particular agreement. Few questioned that thinking, nobody wanted to rock the boat.
    It has become a drip, drip effect that the European electorate has had no real participation in.
    Until finally the creation of the Eurozone and single currency where members surrendered any last bit of national independence they had left.

    Had they at the time of the Euro creation been able to force through full blown fiscal union they would.

    The truth is the ‘European Project’ as they so often like to call it is the slow creation of a super state with Germany dominating at the top and calling the shots. Even Sarkozy seems to have fallen into line now because of his impending election and the need to appear co-operative with Germany.

    This domination has been made even more transparent during this financial crisis. No consultation with any meaning between other nations, just Merkozy telling the other states what to do or else.
    Sarkozy even tried it with David Cameron recently, such was his frustration and inability to push Britain around.

    When the history of the European single super state comes to be written, historians will wonder how on earth sovereign nations with a proud independent history ever hoodwinked their people into joining and participating in it.

    That is if it does not impload before hand which seems very likely and as far as I am concerned it cannot come soon enough.

    But come on now. Everyone knows this is a peace project. If you don’t you are just evil and eat babies.

    That has been their rhetoric sort of.

  • #106957
    Profile photo of Chopera
    Chopera
    Participant

    @logan wrote:

    @peterhun wrote:
    It died when they joined the EU, not the Euro.

    I don’t agree Peter. The original European concept did not involve loss of sovereignty or control of the economic levers of power. It was originally just simply a trading block between sovereign nations and should have remained so.
    The gradual slide into the creation of a super state then began with more and more power being conceded to Brussels.
    Politicians made agreements and treaties with the excuse that the single market would or could not work without this particular concession or that particular agreement. Few questioned that thinking, nobody wanted to rock the boat.
    It has become a drip, drip effect that the European electorate has had no real participation in.
    Until finally the creation of the Eurozone and single currency where members surrendered any last bit of national independence they had left.

    Had they at the time of the Euro creation been able to force through full blown fiscal union they would.

    The truth is the ‘European Project’ as they so often like to call it is the slow creation of a super state with Germany dominating at the top and calling the shots. Even Sarkozy seems to have fallen into line now because of his impending election and the need to appear co-operative with Germany.

    This domination has been made even more transparent during this financial crisis. No consultation with any meaning between other nations, just Merkozy telling the other states what to do or else.
    Sarkozy even tried it with David Cameron recently, such was his frustration and inability to push Britain around.

    When the history of the European single super state comes to be written, historians will wonder how on earth sovereign nations with a proud independent history ever hoodwinked their people into joining and participating in it.

    That is if it does not impload before hand which seems very likely and as far as I am concerned it cannot come soon enough.

    I think it was Gorbachev who said he couldn’t understand why western europe celebrated the break up the Soviet Union while at the same time was trying to create a version of their own

  • #107039
    Profile photo of Anonymous
    Anonymous
    Participant

    After this morning’s news it all seems academic. Cameron followed his instincts and the UK is pretty well out of Europe now. The 17 plus 7 countries will carry on without us. There is no longer a need for a referendum, we are technically out of Europe. We will not even be invited to their monthly meetings.

    Is it a time to rejoice? Time alone will tell.

  • #107040
    Profile photo of DBMarcos99
    DBMarcos99
    Participant

    @Rocker wrote:

    After this morning’s news it all seems academic. Cameron followed his instincts and the UK is pretty well out of Europe now. The 17 plus 7 countries will carry on without us. There is no longer a need for a referendum, we are technically out of Europe. We will not even be invited to their monthly meetings.

    Is it a time to rejoice? Time alone will tell.

    Depends on how the relative economies shape up?

  • #107046
    Profile photo of peterhun
    peterhun
    Participant

    @dbmarcos99 wrote:

    @Rocker wrote:
    After this morning’s news it all seems academic. Cameron followed his instincts and the UK is pretty well out of Europe now. The 17 plus 7 countries will carry on without us. There is no longer a need for a referendum, we are technically out of Europe. We will not even be invited to their monthly meetings.

    Is it a time to rejoice? Time alone will tell.

    Depends on how the relative economies shape up?

    The eurozone will suffer a long economic decline, it will be two speed, the falling EU and the rest of the world.

    If the Euro survives, and this latests plan will not ensure it, the crap economies will suffer long, increasing, austerity-induced unemployment and economic stagnation.

    What will actually happen is there will be referendums and elections to get out of the this deal. Germany wil NEVER bail out the weak ecomomies and those countries will default out of the EU/Euro.

  • #107047
    Profile photo of Chopera
    Chopera
    Participant

    @Rocker wrote:

    After this morning’s news it all seems academic. Cameron followed his instincts and the UK is pretty well out of Europe now. The 17 plus 7 countries will carry on without us. There is no longer a need for a referendum, we are technically out of Europe. We will not even be invited to their monthly meetings.

    Is it a time to rejoice? Time alone will tell.

    Nope last time I checked the UK was still part of Europe 🙄

    In fact the UK is still part of the European Union as well.

    There will probably be a group within the EU who will hold their own “meetings”, but since all these “meetings” are preceeded by a Franco-German get together where they establish a position that is mutually beneficial to them so they can then use their collective weight to force the rest to agree to their terms, they are not necessarily “meetings” that you’d want to be part of.

  • #107048
    Profile photo of peterhun
    peterhun
    Participant

    You have to remember that this pact will change nothing. Most of the troubled countries will not be able to abide my the lending to GDP ratio’s, now or in the distant future. Germany will not bail out Italy, Eurobonds are out.

    The Germans, when you read their news sites, are 100% convinced that reducing lending to German levels (which are very high actually) is the SOLUTION. They are perplexed by S&P downgrading threat ‘we have a small GDP-to-debt ratio and a large trade surplus’ failing to understand that rating is about the probability of default, not debt level. And Germany is going to have to make a choice, take on the debt or see exports fall; either way Germany is not a good bet from the outside view.

    There isn’t going to 23 countries in this pact, maybe 10 who can make the grade, the rest will be part of it in theory – being to borrow at a slightly reduced rate but at a disadvantage to the core members. These will be the slow speed Europe, mainly the PIIGS.
    Ironically I think non-Euro countries will be far more eligible for new core Euro membership becuase they are in control of their own currency. And Germany, get your debt level down to Poland’s <55% level, you profligate over spenders 🙂

    Seems the researchers agree with me.

    For those of us of a certain age, the fiscal language looks to be copied and pasted from the original Stability and Growth Pact with a few bells and whistles added to imply that ‘this time we mean it.’ – Steven Englander, Citigroup

    Germany’s chancellor speaks.

    RTRS -GERMANY’S MERKEL SAYS VERY SATISFIED AT AGREEMENT AT EURO SUMMIT, SAYS NOT A LOUSY COMPROMISE

    RTRS -MERKEL SAYS VERY SATISFIED WITH SUMMIT DECISIONS, WORLD WILL SEE EU HAS LEARNED FROM MISTAKES

    Don’t anyone laugh.

    And a point made by Nomura’s Desmond Supple about a treaty of seventeen, versus the treaty of twenty-seven vetoed by the UK:

    The EU may pursue a separate treaty for the EU17, but again this does not appear to be a viable solution. It is hard to envisage countries adhering to two binding Treaties and the concerns which prevented a full EU 27 Treaty change are still present for the EU 17: Finnish (small country) concerns over majority voting, Ireland’s concerns over the corporate tax rates and possible Irish concerns that it could not impose a transaction tax if the UK did not. Realistically, an EU 17 Treaty may just be a non-binding commitment to change with some longer-term hopes of Treaty change.

    Terry Smith of Tullett Prebon puts it a bit more pithily (H/T Pawelmorski):

    UK as isolated as someone left on the dock in Southampton as the Titanic sailed away

    http://ftalphaville.ft.com/blog/2011/12/09/789891/quote-du-jour-eurofudge-edition/

  • #104541
    Profile photo of peterhun
    peterhun
    Participant

    @Rocker wrote:

    After this morning’s news it all seems academic. Cameron followed his instincts and the UK is pretty well out of Europe now. The 17 plus 7 countries will carry on without us. There is no longer a need for a referendum, we are technically out of Europe. We will not even be invited to their monthly meetings.

    Is it a time to rejoice? Time alone will tell.

    No, NOTHING was agreed at the summit. The UK blocked it unless its economy was protected from looting by the EU.

    The EU therefore has no treaty changes, no enforcement of financial rules. Nothing. The Euro-17 are in exactly the same place as they were before the meeting.

    Europe’s disastrous summit

    Dec 9, 2011 00:56 EST

    I thought disasters were all meant to happen over the weekend? Somehow, in Brussels, EU leaders have contrived to pull defeat out of the jaws of victory on Thursday night, leaving Friday for finger-pointing and recriminations and wondering whether anybody who signed on to this deal has any chance at all of even getting re-elected, let alone being remembered as one of the leaders who saved the euro.
    .
    .

    It all adds up to one of the most disastrous summits imaginable. A continent which has risen to multiple occasions over the past 66 years has, in 2011, decided to implode in a spectacle of pathetic ignominy. Its individual countries will survive, of course, albeit in unnecessarily straitened circumstances. But the dream of European unity is dissolving in real time, as the eyes of the world look on in disbelief.

    http://blogs.reuters.com/felix-salmon/2011/12/09/europes-disastrous-summit/

    Countries who are not part, undecided or required to have a referendum to join the fiscal ‘agreement’

    UK
    Hungary
    Sweden
    Czech Republic
    Denmark
    Ireland

    Thats within 24 hours.

  • #104538
    Profile photo of katy
    katy
    Spectator

    Agree Peter. Love this quote

    UK as isolated as someone left on the dock in Southampton as the Titanic sailed away 😆 😆

  • #107051
    Profile photo of zoro
    zoro
    Participant

    There is a very good reason why Germany (and their poodle, France) pushed so hard for an EU treaty change; it is the only way that the proposed fiscal union and budget management proposals could be given real teeth.

    What will happen now is that an attempt will be made to get agreement between all the governments who said yes.

    Many of the governments who said yes to an EU wide treaty change yesterday, knew full well that Britain would say no and it wouldn’t go through. Hence they could say yes safe in the knowledge it wouldn’t happen.

    This will inevitably mean negotiations and accommodations e.g. the Irish and their corporation tax rates, the French and their loss of sovereignty etc. etc. These negotiations may succeed but they probably won’t, in which case everyone will sign up to the principles involved but no commitment to the details or any effective punishments for a breach. Nothing much will change from how it is today.

    Germany has no real interest in paying the price to fix the current crisis and everyone accepted that the proposals they were trying to get agreed wouldn’t have done that, it was all about not letting it happen again.

    In their eyes the current crisis is being driven by market madness and they believe it will pass and hence they only want to put measures in place for the distant future.

    The markets of course may not see it the same way and may not oblige by bringing the cost of borrowing down, in which case the Euro is effectively toast. There are several articles being published now that are about what steps to take when the Euro collapses. Here is one on Bloomberg that lists the measures some companies are taking to mitigate the risks.

    http://www.bloomberg.com/news/2011-12-09/wary-european-ceos-move-cash-to-germany-to-protect-against-breakup-risk.html

    The measures put in place last week by the worlds major central banks were in response to the drying up of US dollars available to EZ banks. Financial institutions in the US are refusing to lend to EZ banks. The EZ is rapidly moving towards being an area where no one wants to put their money.

    Please excuse me for droning on about this, I’m having a slow day. 🙂

  • #107052
    Profile photo of logan
    logan
    Participant

    I would argue that the very reason the Euro was created has now gone. It was a political move designed to unite all the member states towards The United States of Europe.
    That can now never happen and a two speed Europe is a reality with a third of members holding on to their own national currencies. I also doubt in future any new members such as Croatia would want to be part of the Eurozone or could qualify for it.
    So that begs the question, what is the point of the Euro now?
    The sooner it’s gone the better and all EU states start a return to prosperity governing their own economies.

  • #107054
    Profile photo of peterhun
    peterhun
    Participant

    @peterhun wrote:

    Countries who are not part, undecided or required to have a referendum to join the fiscal ‘agreement’

    UK
    Hungary
    Sweden
    Czech Republic
    Denmark
    Ireland
    Adding
    Poland (probably. may also need constitutional changes)

    zoro: Agreed. All these countries ‘made their excuses and left’ leaving the UK to take the flak (how appropriate that word is)

    I also doubt in future any new members such as Croatia would want to be part of the Eurozone or could qualify for it.

    Poland will. Its still relatively poor so wants to be part of a bigger country to defend against the Imperial Russian Army. It fundamentally fears for its existence without the EU and its the same for the Baltic states

  • #107059
    Profile photo of Anonymous
    Anonymous
    Participant

    I’ve just patiently listened to the latest news and it’s quite clear that 26 of the 27 EU members have agreed to pursue a joint course to consolidate the Euro. The UK is not involved. We will no longer be involved in any future moves concerning European affairs.

    Technically, we are out of Europe, there is no other way to look at it. Our veto has been vetoed. The 26 members of the EU will make decisions which concern the UK, but we will not be at the table, and there will be nothing we can do about it.

    (I watched an interview with a prominent US official when he was asked about the ‘special’ relationship. He laughed.)

  • #107062
    Profile photo of Chopera
    Chopera
    Participant

    @Rocker wrote:

    I’ve just patiently listened to the latest news and it’s quite clear that 26 of the 27 EU members have agreed to pursue a joint course to consolidate the Euro. The UK is not involved. We will no longer be involved in any future moves concerning European affairs.

    Technically, we are out of Europe, there is no other way to look at it. Our veto has been vetoed. The 26 members of the EU will make decisions which concern the UK, but we will not be at the table, and there will be nothing we can do about it.

    (I watched an interview with a prominent US official when he was asked about the ‘special’ relationship. He laughed.)

    No the whole point of having/using the veto was that the EU cannot take decisions that affect the UK without consulting the UK.

    Of course the other countries can make new agreements between themselves – but not new agreements that affect the UK unless there is a renegociation of existing treaties.

    What the other countries are now going to agree on (or at least attempt to agree on) is an arrangement whereby their budgets need to be passed by a central body before they can be implemented. So if they do ever get as far as doing this then there will no longer be any other countries at the table anyway, just one big federation.

    Just as the “Europeans” are now finding out that you can’t have monetary union without fiscal union, they will soon find out that you can’t have fiscal union without political union.

  • #107063
    Profile photo of peterhun
    peterhun
    Participant

    @Rocker wrote:

    I’ve just patiently listened to the latest news and it’s quite clear that 26 of the 27 EU members have agreed to pursue a joint course to consolidate the Euro.

    Those countries will in many case has no ability to agree to anything without their parliaments or peoples agreement. Even if they do agree, none of what they agree is legally binding and it can be changed by a vote by the local government.

    Even if they did agree something, there is no money behind it to actually make any difference.

    Its a load of bollocks.

  • #107064
    Profile photo of zoro
    zoro
    Participant

    The proposal is that each government passes a law (or amends its constitution) to ensure compliance and presumably will have to prosecute itself if it doesn’t comply. That’ll work then, won’t it? After all the current growth and stability pact wasn’t breached was it?

    Oh yes, I remember now, Germany and just about everone else breached it which is why we are where we are now.

  • #107065
    Profile photo of Anonymous
    Anonymous
    Participant

    It was like watching a chess game that lasted for 20 years, to the day, since Maastricht. It ended at around four o’clock this morning.

    Sarkozy said, ‘Check!’

    Merkel said, ‘Mate!’

    And Cameron left the room to phone home to Clegg.

  • #107066
    Profile photo of angie
    angie
    Spectator

    Direct to the point Peter 8) or putting it another way ‘what a load of cahones’ 😆

    I often think the ordinary man or woman in the street could do a lot better for a lot less milking of the wonga, but we are never asked our opinions 😡

    It shows how the world of finance, corruption, tax evasion by the rich, and greed has got completely out of hand.

    Another case although sport related is the Wayne Rooney debacle. Rooney and Capello along with other FA minions, and whoever else including the Press and media, and 4 yes 4 top London lawyers are flown to Switzerland to get Rooney’s 3 match ban reduced to a 2 match ban. At what cost financially, it beggars belief, now that is a load of b—-x 😆

  • #107069
    Profile photo of logan
    logan
    Participant

    There are six none Eurozone members who have signed the proposal or accord but that does not mean they will sign the actual treaty. They seek a mandate from their parliament. Sweden in particular is unlikely to sign up to the treaty because their opposition is against it.

  • #107076
    Profile photo of Anonymous
    Anonymous
    Participant

    I don’t understand the reluctance of Eurosceptics to accept the current situation. You’ve won the war, we are effectively out of Europe. Europe is going to have to exist without us. Why do you prattle on about whether some peripheral country like Sweden may not sign up to the latest developments?

    We’re out of the loop. Whatever the rest of Europe decides to do is irrelevant to us Brits.

    It might even be a good thing, who knows? But there is no longer any point in discussing it any further. Nobody is listening.

  • #107077
    Profile photo of peterhun
    peterhun
    Participant

    Stop being hysterical, the UK still has a veto and is still in the EU.

    Its just the EU is finished, but it was the other Euro members choice, not the UK.

  • #107078
    Profile photo of Anonymous
    Anonymous
    Participant

    I’m sorry, but you patently don’t understand what is being discussed. Whether you’re Polish, English or come from Timbuktu, you’re talking bollocks.

  • #107080
    Profile photo of peterhun
    peterhun
    Participant

    And you have swallowed the garbage that is the euro.

    The news here in Poland is that Cameron is very brave and doing what is right but Poland is too scared for its existence to stand up against the EU. Pretty much in total agreement with the UK, the summit was bollocks but it makes no difference to Poland because everything in it is already part of the constitution.

  • #107082
    Profile photo of Anonymous
    Anonymous
    Participant

    Jesus H Christ. We’re discussing Poland. They’ve been communists for a thousand years, they’re more communist than Russia.

    During WW2, they took great pleasure in executing their Jewish population. It is just about the most horrible country on earth,

    The silly Brits stuck up for them in 1939. The Germans would have sorted those horrible people out.

    Poland is the shittiest country in Europe.

  • #107083
    Profile photo of Anonymous
    Anonymous
    Participant

    Rocker, this is the stupidest thing I have read in about 10 years. Congratulations!!!!!

  • #107084
    Profile photo of Anonymous
    Anonymous
    Participant

    @ralita wrote:

    Rocker, this is the stupidest thing I have read in about 10 years. Congratulations!!!!!

    I’m really sorry to hear that and don’t wish to be pedantic, but if you look back on some things , , , ,, I give up, I think you’re a fecking prat.

  • #107085
    Profile photo of Anonymous
    Anonymous
    Participant

    Sorry, I got carried away. It’s not entirely my fault, my Polish in-laws made me that way.

  • #107086
    Profile photo of peterhun
    peterhun
    Participant

    I guess the message has go through in Spain at least, probably not in France or Germany. Sarkoy was very pleased about the outcome of the summit, allegedly.

    http://www.telegraph.co.uk/finance/financialcrisis/8946790/EU-Treaty-Nicolas-Sarkozys-push-for-power-poses-biggest-threat-to-EU-unity.html

    I suppose I can see the logic, as it would enable the formation of a solid core eurozone. Re-forming the EU is also on the cards, ostensibly to remove the UK and other none euro countries but also to remove the PIIGS. A nicely organized, controlled break up of the Euro… they think.

    Perfect for shitty Poland to join a viable EZ, just after Spain is evicted 🙂

    Sorry, I got carried away. It’s not entirely my fault, my Polish in-laws made me that way.

    Not surprised about your reaction this is a shitstorm that only the French could think its good.

  • #107102
    Profile photo of DBMarcos99
    DBMarcos99
    Participant

    A commentator here stating that Dave may in fact have harmed the City by these actions, as they will now be cut out of European financial transactions. Not my opinion (I don’t know enough about the way these things work), but I hope Dave knows what he’s doing!

    http://gregpytel.blogspot.com/2011/12/has-cameron-killed-city.html

    The financial industry is heavily subsidised in the UK by the taxpayers (i.e. the costs to the UK economy of having this industry exceed the tax receipts by far). The City does not exist as the UK financial centre but as the main European one competing with likes of New York, Tokyo, Shanghai and Hong Kong. Without ability to do business in Europe freely the City will be a “surplus to requirements” on the world’s markets. There is no doubt that very rational financiers in Frankfurt and politicians in Berlin would like to take over the City’s position. And the fuming Sarkozy and the French will be happy to help, just finishing off the City. Now Cameron created the best opportunity: the openly expressed desire of vengeance by Sarkozy and much less, but in practice far more lethal, by Merkel will ensure that France and Germany will do all their best to cut the City out of European deals and financial markets. And, with the support of practically the rest of Europe, it will be easy: unlike the war with Iraq a real “cakewalk”. This is very likely to result, in a decade or so, in Frankfurt getting the pole position in finance in Europe with some spillover and subordinate business conducted in Paris. When Thatcher went to Brussels to negotiate she brought back the rebate. When Cameron went there he put the financial industry on the gallows.

  • #107109
    Profile photo of peterhun
    peterhun
    Participant

    The UK is in the EU and the free market still applies, as does the UK veto which it can now use aggressively. I don’t think the EU can kick out the UK. This is awkward for the uk but its a ****ing disaster for the EU. latest odds of EU break up are 30%, which is pretty good. However, the Eurozone banking system is running out of assets and it needs to find Trillions of Euro’s next year.

    The consequence’s of Euro break up 😯

    Fall in GDP

    Inflation

    Fall in the reverted currencies


    Alternative from another source

    And the fall in house prices

    Which, I assume is on top of the fall in currency.

    Note: Germany has a fall of GDP of 4% and its currency recovers in 2 years. The cost of bailing out the EZ is probably 3Trillion, far far more.

    Which why I’m certain, when it comes to it, Germany will let the Euro fail.

    http://ftalphaville.ft.com/blog/2011/12/08/786951/post-euro-economies-charted/

  • #107112
    Profile photo of katy
    katy
    Spectator

    Who would make up the shortfall of 100 billion euro contribution from the UK if they kicked them out….Greece, Spain 😆 The UK could probably buy cheaper imports than from Europe too.

  • #107115
    Profile photo of peterhun
    peterhun
    Participant

    @katy wrote:

    Who would make up the shortfall of 100 billion euro contribution from the UK if they kicked them out….Greece, Spain 😆 The UK could probably buy cheaper imports than from Europe too.

    Its a good point (although its not 100billion is it?), the UK is the third largest economy and the biggest non EZ economy. The GDP will be seen as the hard currency through out the collapsed states and its a potentially vital support for the EZ.

    The UK’s hard currency will be significantly more valuable to the EZ. Time to lord it over the poverty stricken, ex-Euro peasants 😉

  • #107121
    Profile photo of Chopera
    Chopera
    Participant

    @dbmarcos99 wrote:

    A commentator here stating that Dave may in fact have harmed the City by these actions, as they will now be cut out of European financial transactions. Not my opinion (I don’t know enough about the way these things work), but I hope Dave knows what he’s doing!

    http://gregpytel.blogspot.com/2011/12/has-cameron-killed-city.html

    Yes this has been reported a few times. I have no idea whether what happened came about due to a diplomatic cock.up or some pre-planned strategy. However I believe that the UK has been destined to grow apart from the rest of the EU since the euro opt-out in the Maastricht treaty. It was only a matter of time before the euro would force it’s members into fiscal union, at which point the UKs separation would become more apparent. In the end the catalyst has been the financial transaction tax, but if it hadn’t been that it would have been something else. The UK had to draw the line somewhere and let the others push on into the valley of depression.

  • #107123
    Profile photo of Fuengi (Andrew)
    Fuengi (Andrew)
    Participant

    @peterhun wrote:

    Its a good point (although its not 100billion is it?), the UK is the third largest economy and the biggest non EZ economy. The GDP will be seen as the hard currency through out the collapsed states and its a potentially vital support for the EZ.

    UK net contribution to the EU is about 2.75€ billion in 2010 i beleive

  • #107124
    Profile photo of Chopera
    Chopera
    Participant

    @fuengi wrote:

    @peterhun wrote:
    Its a good point (although its not 100billion is it?), the UK is the third largest economy and the biggest non EZ economy. The GDP will be seen as the hard currency through out the collapsed states and its a potentially vital support for the EZ.

    UK net contribution to the EU is about 2.75€ billion in 2010 i beleive

    According to this wiki page it works out at €9.5bn each year between 2007 and 2013 (based on €57bn net contribution over 6 years):

    http://en.wikipedia.org/wiki/Budget_of_the_European_Union

    Interesting to see that on a per capita basis the Dutch, Danes and Swedes pay the most. Not a huge difference between the German, French and UK contributions.

  • #107125
    Profile photo of peterhun
    peterhun
    Participant

    UK contribution is increasing each year due to it giving up the rebate which was worth £4 billion per year. If the Euro does collapse (and the countries who leave the Euro exit the EU as the only option available to do so) then the remaining countries will be left to cover Italy and the UK’s contribution.

    Lets see how bombastic they are when the bill drops on the German households, although I doubt the recipients of the EU’s largesse realise where the source of the EU money tree is.

    Yes this has been reported a few times. I have no idea whether what happened came about due to a diplomatic cock.up or some pre-planned strategy.

    It was definitely Sarkozy’s plan, he’s been talking about a smaller EU and its him who insisted on the transaction tax (that falls almost entirely on the UK) that resulted in the veto.

  • #107127
    Profile photo of logan
    logan
    Participant

    Sarkozy is very unpopular in France and way behind the socialist Hollande who is unqualified to be President due to his total lack of experience. He’s a party hack, c’est tout.
    However Dominic De Villepin has today entered the Presidential race, he’s of the same Gaullist party as Sarkozy and in my view better qualified than Hollande, and more likely to win.
    Politically defeating the British is a very popular sport in France and Sarkozy is a vulgar populist who will do anything legal to get re-elected.
    He was spoiling for a fight with DC and as a result his standings in the polls are risen. The summit was a set up. DC knew it and did the only thing he could do under the circumstances.

  • #107132
    Profile photo of Chopera
    Chopera
    Participant

    @logan wrote:

    Sarkozy is very unpopular in France and way behind the socialist Hollande who is unqualified to be President due to his total lack of experience. He’s a party hack, c’est tout.
    However Dominic De Villepin has today entered the Presidential race, he’s of the same Gaullist party as Sarkozy and in my view better qualified than Hollande, and more likely to win.
    Politically defeating the British is a very popular sport in France and Sarkozy is a vulgar populist who will do anything legal to get re-elected.
    He was spoiling for a fight with DC and as a result his standings in the polls are risen. The summit was a set up. DC knew it and did the only thing he could do under the circumstances.

    Merkel is perhaps more unlikely to get re-elected in a couple of years time. As various eurozone electorates take their revenge on their leaders for selling out it makes you wonder who will end up running the fiscal union (should they get that far)

  • #107134
    Profile photo of Fuengi (Andrew)
    Fuengi (Andrew)
    Participant

    @chopera wrote:

    According to this wiki page it works out at €9.5bn each year between 2007 and 2013 (based on €57bn net contribution over 6 years):

    http://en.wikipedia.org/wiki/Budget_of_the_European_Union

    Hi,
    but the source article is quite biased, so not sure. But i think my figure is wrong (out of date).

    http://www.bbc.co.uk/news/uk-politics-15387495
    this says UK are currently paying a net contribution between 3 and 4 billion, but that is going to go up, as the UK rebate is going to be decreased.

  • #107167
    Profile photo of DBMarcos99
    DBMarcos99
    Participant

    BBVA is claiming the worse is over for the Europe debt crisis.

    http://www.reuters.com/article/2011/12/14/bbva-seoul-idUSL3E7NE4ZH20111214

    SEOUL, Dec 14 (Reuters) – The head of Spain’s second-largest bank BBVA SA said on Wednesday that the worst has passed for the European debt crisis and there will be no problems implementing measures agreed upon at the recent EU summit.

    Up to 26 European Union countries will finalise a pact to enforce stricter budgetary discipline in the euro zone by March, a top official said on Tuesday, as the bloc tries to quickly to restore confidence but without Britain’s backing.

    “My view is … the UK will come back to the negotiating table and will agree to a new European package,” BBVA chairman Francisco Gonzalez told a press conference in Seoul.

    Famous last words, or prophetic?

  • #107168
    Profile photo of peterhun
    peterhun
    Participant

    Maybe someone would show him this, and remind him how impossible it is for banks to raise money

  • #107170
    Profile photo of DBMarcos99
    DBMarcos99
    Participant

    Maybe someone would show him this, and remind him how impossible it is for banks to raise money

    Well it’s not “impossible” for banks to raise money. Many are selling parts of their businesses to raise cash. So not impossible, but as this report points out, perhaps unwise and likely to affect future profitability.

    http://www.bloomberg.com/news/2011-12-13/eu-banks-selling-crown-jewels-to-raise-capital-risk-undermining-growth.html

    Spain’s Banco Santander SA (SAN), Belgium’s KBC Groep NV (KBC) and Germany’s Deutsche Bank AG are accelerating plans to exit profitable operations outside their home markets. Santander, which said in October it needs to plug a 5.2 billion-euro ($6.9 billion) capital gap, sold its Colombian unit last week to Chile’s Corpbanca for $1.16 billion. Deutsche Bank is weighing options including a sale of most of its asset-management unit, while KBC may dispose of businesses in Poland.

    Such sales risk hurting long-term profit, just as Europe enters recession, investors say. It’s the unintended consequence of the decision by European regulators to make banks increase core capital to 9 percent by June instead of 2019. Unwilling to raise equity because their share prices are too low, lenders are selling profitable assets because they’re struggling to find buyers willing to pay enough for their troubled loans to avoid a loss that would erode capital. Investors say the sales risk leaving banks focused on a stagnant economy and deprive them of economic growth from outside the region.

    “These are the most profitable parts of their business,” said Azad Zangana, European economist at London-based Schroders Plc, the 200-year-old British asset manager, citing Spanish and Portuguese banks selling assets in Latin America. “They’re being forced by regulators to sell them off. You begin to become a less profitable organization. Your business model stops working if you’re being forced to lend only to an economy that’s going through a very deep recession.”

  • #107172
    Profile photo of logan
    logan
    Participant

    The man at BBVA is deluded. The UK will not agree to the treaty unless the safeguards DC demanded are given which Mercozy have set their faces against. Someone would have to do a ‘grand volte-face’ and it aint going to be Dave.
    The markets have given their verdict since the summit and most commentators with knowledge of these things think the demise of the Euro is a 50/50 chance.
    As the political ineptness in Europe continues those odds are bound to shorten.

  • #107182
    Profile photo of peterhun
    peterhun
    Participant

    @dbmarcos99 wrote:

    Well it’s not “impossible” for banks to raise money. Many are selling parts of their businesses to raise cash. So not impossible, but as this report points out, perhaps unwise and likely to affect future profitability.

    The Bundesbank is running out of assets. There is talk of banks selling off their gold reserves. Future profitability is the least of it, existence is threatened.

  • #107183
    Profile photo of DBMarcos99
    DBMarcos99
    Participant

    @logan wrote:

    The man at BBVA is deluded. The UK will not agree to the treaty unless the safeguards DC demanded are given which Mercozy have set their faces against. Someone would have to do a ‘grand volte-face’ and it aint going to be Dave.
    The markets have given their verdict since the summit and most commentators with knowledge of these things think the demise of the Euro is a 50/50 chance.
    As the political ineptness in Europe continues those odds are bound to shorten.

    Funnily enough that means the odds have improved – various commentators were saying the Euro was definitely doomed just a week or two back.
    It may be that the markets are waiting to see the new policies of the PP (Spain’s borrowing costs were lower this week when they placed debt), and to see if the Italian technocrats manage to pull off their programme.
    A shame really, because if the Euro does hold together, it’s going to mean continued pain and mass unemployment for a few years yet.

  • #107184
    Profile photo of katy
    katy
    Spectator

    Cameron is not quite alone, just the others didn’t stand up to be counted. Seems as there has been a little too much propoganda from the merkozy, Barrosa camps!

    http://www.spectator.co.uk/coffeehouse/7483143/26-versus-1-really.thtml

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