Eurozone will collapse...

[Sirius]

I still say let it implode and then start again with a common market not this super state that they seem to think is the answer

[Chris]

http://www.bbc.co.uk/news/business-18382659

Spain is to get up to €100 billion to bail out its banks. That's about EIGHTY BILLION POUNDS. The total cash outlay to bail out UK banks was about £120 billion. The difference is, we had the resources to pay for it. Spain does not.

Let nobody be fooled by the mechanism being used to funnel the money here. The fact that the EFSF is paying Spain's own bank restructuring fund directly rather than handing the cash to the Spanish treasury is a rather pathetic face-saving exercise designed (but doomed to fail) to disguise the fact that Spain does not have enough cash to bail out its own banks.

Spain's banking sector is bankrupt and were it not for foreign aid, that fact would imminently be bankrupting the Spanish state itself. Eurogeddon is here, folks, and the fat lady is in the wings.

[Sirius]

Originally Posted by Chris

http://www.bbc.co.uk/news/business-18382659

Spain is to get up to €100 billion to bail out its banks. That's about EIGHTY BILLION POUNDS. The total cash outlay to bail out UK banks was about £120 billion. The difference is, we had the resources to pay for it. Spain does not.

Let nobody be fooled by the mechanism being used to funnel the money here. The fact that the EFSF is paying Spain's own bank restructuring fund directly rather than handing the cash to the Spanish treasury is a rather pathetic face-saving exercise designed (but doomed to fail) to disguise the fact that Spain does not have enough cash to bail out its own banks.

Spain's banking sector is bankrupt and were it not for foreign aid, that fact would imminently be bankrupting the Spanish state itself. Eurogeddon is here, folks, and the fat lady is in the wings.

Wish i could get a bail out

[Sirius]

Just been reading this and i do feel he could be right

http://www.bbc.co.uk/news/uk-politics-18383804

The UK's hopes of economic recovery are being "killed off" by the eurozone crisis, the chancellor has warned.

Writing in the Sunday Telegraph, George Osborne said European leaders faced a "moment of truth" which could determine the economic future for over a decade.

This made me laugh

http://news.sky.com/home/business/article/16244113

Spain's finance minister has confirmed his country will ask for European financial aid for its ailing banking system.

Madrid insists the eurozone support for its banks is not a rescue, and not all banks need money.

Luis de Guindos told reporters the country has not yet made a formal loan request - but a statement from the eurogroup of finance ministers said they expected one "shortly".

So what the hell is it if not a rescue and here is the problem the faces when the country's being rescued will not except that there banks are at fault in the first place. !

[Chris]

It is a rescue. But they think that by calling it something else (and announcing it at the start of the weekend) the markets will not implode on Monday morning. The Spanish economy is twice the size of Greece, Portugal and Ireland combined - what is happening here is seismic. I doubt the financial sector is likely to be taken in by this attempted sleight of hand for very long.

The Eurocrats are utterly delusional. Everybody remember where you were during the summer of 2012 - we are living in historic times. Think Kennedy, think moon landing, think 9/11.

[Damien]

Originally Posted by Chris

It is a rescue. But they think that by calling it something else (and announcing it at the start of the weekend) the markets will not implode on Monday morning. The Spanish economy is twice the size of Greece, Portugal and Ireland combined - what is happening here is seismic. I doubt the financial sector is likely to be taken in by this attempted sleight of hand for very long.

The Eurocrats are utterly delusional. Everybody remember where you were during the summer of 2012 - we are living in historic times. Think Kennedy, think moon landing, think 9/11.

Surely, when faced with the very real consequences of ruin, Germany will agree to Eurobonds? From my reading that would stabilise the situation?

[Chris]

Germany can't agree to Eurobonds. Merkel is constitutionally forbidden to do so. This is why she speaks of such fiscal union as the desirable end of a process of integration rather than an immediate step towards integration.

For that level of sovereignty to be ceded, constitutional change requiring referendum would be needed in Germany. That cannot be done quickly and in the current climate, arguably cannot be done at all. In Germany as elsewhere the thirst for European integration is much stronger within the political class than in the population at large. Germans are already looking askance at the amount of their money thrown into a bottomless pit - they are only going to stand for so much more.

[Osem]

A major problem here is that the Eurocrats have shown themselves up for what they are. The markets a) hardly believe a word coming out of the Eurozone now and b) don't believe there is the political will to tackle the growing crisis. Until that changes we can expect things to get worse and even if there is a sudden outbreak of common sense in Eurolalaland, it may be too little, too late...

[Damien]

Originally Posted by Chris

Germany can't agree to Eurobonds. Merkel is constitutionally forbidden to do so. This is why she speaks of such fiscal union as the desirable end of a process of integration rather than an immediate step towards integration.

For that level of sovereignty to be ceded, constitutional change requiring referendum would be needed in Germany. That cannot be done quickly and in the current climate, arguably cannot be done at all. In Germany as elsewhere the thirst for European integration is much stronger within the political class than in the population at large. Germans are already looking askance at the amount of their money thrown into a bottomless pit - they are only going to stand for so much more.

So why are the Americans and ourselves pushing for it? Are they taking a different approach, looking for a loophole?

[denphone]

Spain's Rajoy hails bank rescue as 'victory for euro'.

http://www.bbc.co.uk/news/world-europe-18385634

Spanish Prime Minister Mariano Rajoy has hailed a decision by eurozone finance ministers to help Spain shore up its struggling banks as a victory for the European common currency.

"It was the credibility of the euro that won," he told reporters.

"The solidity of Spain's financial system won, the credibility of the euro won," he said, and vowed to press ahead with structural economic reforms.

Lloyds Banking Group economist, Charles Diebel, said in a report that the move was bailout "lite" and questioned whether the money would stop the rot: "Will it be enough? That's questionable as it is still prevention rather than cure and again only keeps the banking sector alive rather than really supporting growth."

[Chris]

Originally Posted by Damien

So why are the Americans and ourselves pushing for it? Are they taking a different approach, looking for a loophole?

The Obama administration is ideologically wedded to the idea of a united Europe. In the UK, I think there are a couple of things going on with Cameron and Osborne. On the one hand, they want to be seen to be saying all the right things, to lessen the chances of us somehow getting the blame for all this when it finally goes belly up. On the other hand, I suspect they see a federal Eurozone as the UK's once-in-a-lifetime opportunity to achieve a relative loosening of our ties with the EU without us actually having to do very much, I.e. the UK stands still while the Euro-core marches boldly into ever closer union.

[Dai]

This dates back to 2010 but the principle still stands true. Of course the situation has changed increasingly for the worse since this was written. However, the Obama administration still seems wedded to this failed principle of government.

http://www.libertoad.com/2010/05/06/...greek-bailout/

---------- Post added at 17:46 ---------- Previous post was at 17:44 ----------

Originally Posted by Chris

The Eurocrats are utterly delusional. Everybody remember where you were during the summer of 2012 - we are living in historic times. Think Kennedy, think moon landing, think 9/11.

Can you hear the waves yet? The tsunami is nearly upon us.

[Osem]

Originally Posted by denphone

Spain's Rajoy hails bank rescue as 'victory for euro'.

http://www.bbc.co.uk/news/world-europe-18385634

"The solidity of Spain's financial system won, the credibility of the euro won," blah blah blah...

Yeah right! Does anyone really believe that tosh?...

[Dai]

Originally Posted by Osem

Yeah right! Does anyone really believe that tosh?...

The ones with their snouts deepest in the trough?
To mix my plumbing metaphors a bit the last thing they want is for anyone to pull the plug.

[Chris]

Originally Posted by Osem

Yeah right! Does anyone really believe that tosh?...

Nope. Not even they believe it. But they know that matters are out of their hands - the financial markets will call time on the Euro just as soon as they please. The last card the Eurocrats have left to play is the monumental lie that they have 'fixed' everything (or in the case of Spain, 'look, it was never that serious in the first place!'). They have the slimmest of hopes that the markets will believe them, there won't be a run on Spanish banks and that nobody will put 2+2 together and realise that now Spain is a beneficiary of the EFSF rather than one of its creditors, there ain't enough Euros left in all the treasuries in the EZ to pay out when Italy goes mammaries skywards.

Precisely as many commentators have been predicting since late last year, we have gone from Greece to Spain and we can now do nothing but sit back and wait for Italy to fall.

---------- Post added at 19:16 ---------- Previous post was at 18:19 ----------

Italy must guarantee 22pc of the bail-out funds, even though it cannot raise money itself at a sustainable rate. You could hardly design a surer way to pull Italy into the fire.

http://www.telegraph.co.uk/finance/c...Bundebank.html