Eurozone will collapse...

[Chris]

Originally Posted by Damien

They didn't join the Euro did they? They won't really care if they are in the EU as long as they don't share the same currency. We would find it harder to get a bailout from the Eurozone than Greece did.

They are obliged to work towards Euro membership as a condition of joining the EU. however I suspect the convergence criteria might be insisted upon a little more strictly in future than when Greece was shooed in.

[nomadking]

Countries like Cyprus, Estonia, and Slovenia are already in the Eurozone.

[Osem]

Yes, the rush to get get countries to join the 'club' was considerable and it doesn't appear to have ceased although the current crisis is certainly focussing a few minds on the harsh realities of membership.

God only knows what the 'thinking' and oversight was. Seems to me the tests applied to the likes of Greece were about as robust as those which were used in self certification mortgages and with the same result - albeit on a larger scale...

[Osem]

Ireland is voting on whether to ratify the European fiscal pact, which sets strict rules on the budget deficits countries are allowed to run up.

Rejecting it would bar Ireland from emergency EU funding when its current bailout package expires in 2013

http://www.bbc.co.uk/news/world-europe-18261922

The pact, signed by all EU members except the Czech Republic and the UK, allows EU member states to co-ordinate their budget policies and impose penalties on rule-breakers. It commits all ratifying members to achieve budget deficits of less than 0.5% of economic output. Last year, Ireland's deficit reached 13.1%.

I'm probably missing something here but are the Eurocrats living in cloud cuckoo land?

[Chris]

Yes, they are. But it seems the Irish have been taken in by the appalling propaganda being spewed out by the 'yes' campaign (which consists of almost the entire political class in Ireland). The polls suggest they're going to go along with it. Mind you, they know from tedious previous experience that there's little point voting no when all that happens is they get asked to vote again six months later and told to deliver the correct answer this time.

[ntluser]

It does seem a bit counter-productive to fine countries that are already in debt with large deficits.

It's equivalent to banks charging clients for exceeding their overdrafts when they have insufficient income in their accounts.

A far better idea would be for the IMF and ECB to come up with options which the countries currently are not using to reduce deficits.

[Osem]

Cyprus appears to be edging closer to a bailout, with the central bank governor saying that the country will seek European Union aid if necessary.

The comments by Panicos Demetriades, made in an interview with the Financial Times, echo remarks on Friday by president Demetris Christofias.

Cyprus had previously firmly rejected suggestions of a bailout, but its banking system is exposed to Greece.

http://www.bbc.co.uk/news/business-18318252

The bailout snowball appears to be gathering yet more momentum. Still it's relative small change really I suppose.

[Chris]

Panicos

Roffle

---------- Post added at 21:49 ---------- Previous post was at 21:48 ----------

I understand that the interdependencies are such that if Greece goes down, Cyprus is going to go down with it.

[Osem]

Build now pay later...

http://www.bbc.co.uk/news/business-18277681

Sound familiar?

[mertle]

Originally Posted by Osem

Build now pay later...

http://www.bbc.co.uk/news/business-18277681

Sound familiar?

depends what you spend it on if its to improve production then it earns country money later.

Watched vid from economist.

He said whats happened is money raised is been used as bad credit by banks.

We raised loans for consumption, property, hedge funds and speculation. This all bad for the economy. We need to raise it for production purposes to drive jobs creation things which then sold on improve uks GDP.

If the whole europe embarks on this then we will recover for sure.

Our last quantitive easing ended up in markets BOE thinking another stimulas why the first failed. Merve the swerve is useless needs to direct the money in right areas.

He talks alot sense maybe we should ask him to be our chancellor replace osbourne. Suprised how we given 97% control money to private banks without strings.

http://www.youtube.com/watch?v=r7qOu...hannel&list=UL

Another pet hate for me is give private firms government money without strings. Surely we should get something back.

http://www.centro.org.uk/newsroom/Pr...ease27754.aspx

In towns up and down country they getting new buses from government even places getting new bus stations. Yet this free money nothing in return. Surely 1% ownership or shares in return.

Crazy we wonder why business use the government as a cash cow bemoan they cant afford this and that then pocket profits.

Great to see some news investment but they should ask for something back in return. Maybe loan repayment plan etc.

[Chris]

Originally Posted by Osem

Build now pay later...

http://www.bbc.co.uk/news/business-18277681

Sound familiar?

The Club Med Euro-states would not have had access to funds at such low rates of interest had they retained their own currencies, and with good reason - excessive spending on cultural/political vanity projects will destroy Spain as surely as tax-dodging and a bloated public sector has destroyed Greece.

Grexit isn't the calamity that will finally kill the Euro, but Spexit most certainly will. It is *going* to happen. Le Grand Projet is holed beneath the waterline with too many of its watertight compartments compromised. The sooner they deploy the lifeboats the more manageable the consequences will be. Sadly, idiots like Barroso still have their hands clapped over their ears shouting "More Europe! More Europe!" as if it were business as usual.

[mertle]

Cyprus in the deep stuff will this effect uk more.

http://www.telegraph.co.uk/finance/f...s-buckles.html

Russia has effectively shored up Cyprus over the past two years but rising defaults in Greece have proved overwhelming. The Cypriot banking system is nine times the country's GDP, with assets of €157bn (£127bn). It has been called the "Iceland" of the South.

Not good this markets panicking again. Can we use powers to stop them making situation much worse. While these run arround like headless chickens we wont get stability to sort problems. These money men wanted austerity now bemoaning its tanking economy/causing unemployment. With less money for people to consume.

http://www.telegraph.co.uk/finance/d...isis-Live.html

[Hugh]

How can we stop markets in other counties trading?

[mertle]

Originally Posted by Hugh

How can we stop markets in other counties trading?

wont be easy thats a fact.

possible needs international co-operation but something needs to be done to stop the panick. Them panicking making bad situation much worse with them piling there money into safer things like comodities its make problem worse than it really needs to be. The uk manufacturing plummet cant help matters.

Suppose one way might be to try get money into peoples hands who spends it with above inflation busting pay rises. If we gave common workers 10% increase then that might just kickstart things. However the likelyhood is no doubt bosses will squeal dump jobs in selfish atitude.

If that the only way to stimulate the economy then surely worth doing explain to bosses why. even if wage increase is 12 month stimulus better nothing.

Another is government to hand out loans to small business/medium business in to stimulate bringing jobs improve manufacturing. Money to help those who got idea who need funds to set there own business if they unemployed. Loans which government earn money repaid back later if they can. Risks but risks worth taking. We get people in work new businesses does not matter how small.

I would say many got ideas but not the capital or collateral to set it up.

If they see people spending money with more disposable cash then maybe they will stop panicking.

I do blame IMF they got lot to answer for how they done things. they could handled the situation much better all they did was cause panick. They tried to ofset the blame from the banks typical. Wish the 2 faced cow got sacked.

How we stabilise the markets is hard issue but that should be priority.

I dont think its possible to able tackling debt management while the market so spooky and economy so weak. Which what experts should told the governments, if they did governments stupid IMF should listened. Nope they went ahead with crazy plan which sunk the world into a mess.

[Chris]

You can't give out pay rises to common workers or anyone else, when the cash isn't there to do it. We are in a recession - businesses are making less money and are borrowing less too. That's why people are losing their jobs. Business is not making the profit with which to pay them. The State can't stuff the pubic sector with pay rises either, because this requires tax rises that the real economy (the private sector) simply cannot bear.

The only place there is a massive hoard of distributable cash is in the Treasury - not in balances as such, but in the tax system. The government has the option of short-term tax cuts in order to put money in the hands of consumers. The flip-side is that this carries inflationary risk, which would be tricky to deal with via the usual means (raising interest rates) because the economy is so fragile, and so many people still have unsustainably large mountains of debt attached to their houses (many of which are no longer worth enough to pay that debt off, if it came to it).

This is, of course, all academic, because an economic tsunami of terrifying proportions is even now rolling its way across the ocean towards us. When the Euro implodes - and it is going to - all bets will be off. I'd start learning how to live with less right now, if I were you.