Eurozone will collapse...

[Sirius]

Originally Posted by Chris

The Euro was not designed along the same mechanisms as the US Dollar. If it had been, it wouldn't be in the mess it currently is in.

In the USA there is a system of fiscal transfers between States, which prevents wealth piling up in the rich states such as California to the detriment of the poorer ones. No such system exists in the Eurozone. It would be politically impossible to bring about; it would require Germany to permanently subsidise Greece. It continues to work in the USA because there is a single cultural and political consciousness that prevents resentment over the fact that industrious Californians effectively subsidise large swathes of the rest of the country (California, if independent of the USA, would still be one of the biggest economies in the entire world and IIRC still in the G7). Meanwhile in Europe resentment is already building in Germany as people who have worked hard and saved carefully are asked to hand over more and more of their hard-earned to prop up Greece, which has made far too little effort to reform its own economy into something capable of existing in a monetary union with mighty Germany.

There is no common cultural or political consciousness to diffuse the resentment building in Europe over the rich northern states bailing out the poor southern ones. Quite the opposite. The hare-brained scheme that is the Euro, designed to lash warring, quarrelsome nation states together so as to prevent future conflict, is in danger of actually causing conflict.

Excellent Chris

[Itshim]

Originally Posted by Sirius

Excellent Chris

May I second that well "said" Chris

---------- Post added at 08:59 ---------- Previous post was at 08:54 ----------

Originally Posted by Osem

http://www.bbc.co.uk/news/business-18950896

However we need not worry about any of this because:



Yeah right! lol

Did not say for how long no help needed. The way it is going- I say it will in two to three years. That`s politicians for you

[Osem]

Could Germany now be set for a downgrade?

Credit ratings agency Moody's has changed its outlook for Germany's AAA credit rating to negative, the first step towards a possible downgrade.

http://www.bbc.co.uk/news/business-18963810

Wonder if this news might focus a few minds on what's going on.

[Itshim]

Originally Posted by Osem

Could Germany now be set for a downgrade?



http://www.bbc.co.uk/news/business-18963810

Wonder if this news might focus a few minds on what's going on.

Somehow I doubt it.

[Chris]

It's kicking off, Pru:

08.05 The panic continues. Spanish borrowing costs on ten year debt have marched towards the 8pc mark this morning, at 7.74pc. Two year borrowing costs have surpassed the 7pc mark for the first time since 1996, and Italian yields aren't that far behind.
In short, things are bad.

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

[Osem]

I dare say the Eurocrats will now have some more meetings about meetings whilst ordering new supplies of sand in which to bury their heads...

[27monksbury]

When you think of all the great intellects that there are in the world, why can't they reset the world economy? These so called experts must be payed huge bonuses by the banks because only they have the expertise to run such a complicated system, and if we didn't pay them they would leave. What to destroy another bank? After the second world war, the Marshal plan was formulated. Germany was smashed to pieces, England had fought 5 ruinous years of war and was skint. Europe was a basket case. However, in charge were people of stature, the Americans stood by us. Now its the turn of the Germans, America, China, and the rest of the world to chip in. Fat chance! Money is only an idea, surely the same rate of interest, say 2 percent could be charged,payed back over 100 years Everyone in the world guarantee payment. Anyway if we go down, we all go down this should put the wind up in Frankfort, London, and Washington.

[TheDaddy]

Originally Posted by 27monksbury

When you think of all the great intellects that there are in the world, why can't they reset the world economy? These so called experts must be payed huge bonuses by the banks because only they have the expertise to run such a complicated system, and if we didn't pay them they would leave. What to destroy another bank? After the second world war, the Marshal plan was formulated. Germany was smashed to pieces, England had fought 5 ruinous years of war and was skint. Europe was a basket case. However, in charge were people of stature, the Americans stood by us. Now its the turn of the Germans, America, China, and the rest of the world to chip in. Fat chance! Money is only an idea, surely the same rate of interest, say 2 percent could be charged,payed back over 100 years Everyone in the world guarantee payment. Anyway if we go down, we all go down this should put the wind up in Frankfort, London, and Washington.

Because they're not really experts, they're very good at informing us of what happened and how it happened but not so good at telling us what's going to happen next, experts my backside, it was experts that got us in this mess in the first place, I'd trust them to sort it out about as much as I'd trust a weatherman to tell me what the weather will be like over the Olympics.

[Osem]

No it hasn't all just gone away...

European stock markets have fallen amid concerns about Spain and as trade unions hold a general strike in Greece.

http://www.bbc.co.uk/news/business-19726981

[ntluser]

Sadly, it is not going to go away.

Despite all the talk of cuts in places like Greece, the one thing I haven't heard is leaders of countries cutting their own salaries,expenses, pensions etc. and until they feel the pain things are not likely to change.

Bolstering up the Euro artificially is just dragging the rest of the Eurozone down. It is, as has been stated, generating resentment between those who are paying for the support and those receiving it. While the sound German economy has people busy beavering away, the Greeks want to strike.

It would be far better if the Greeks became part of the solution rather than part of the problem, because there will come a point where those countries with the sounder economies will cry enough and we will be in a situation where Eurozone members revert back to their original currencies and support their currency at a level they can afford. They will then be left to manage their own affairs without financial support from other Eurozone members.

For me that is the best solution because it allows all Eurozone members to determine their own futures and puts the responsibility for sorting out the economic ills onto the people causing it.

Better still, each country can formulate its own plans tailored to the conditions in their own economy.It will give EU leaders a real incentive to address the issues with true leadership from the top.

[Osem]

Tought times ahead for France.

there is to be a new 75% tax rate for people earning more than 1m euros (£800,000; $1.3m) a year.

http://www.bbc.co.uk/news/world-europe-19754016

Wonder how many of these people will take their business and taxes elsewhere?

Of course it's popular to tax the rich and hit companies with additional financial burdens but this has an adverse effect on competitiveness:

But France has not had a budget surplus since 1973. The social burden has been passed to the employer in the form of higher and higher taxes.

Since France joined the euro, the unit cost of labour has risen by 28% - in Germany by just 8%.

http://www.bbc.co.uk/news/world-europe-19740957

---------- Post added at 13:05 ---------- Previous post was at 13:03 ----------

Originally Posted by ntluser

Sadly, it is not going to go away.

Despite all the talk of cuts in places like Greece, the one thing I haven't heard is leaders of countries cutting their own salaries,expenses, pensions etc. and until they feel the pain things are not likely to change.

Bolstering up the Euro artificially is just dragging the rest of the Eurozone down. It is, as has been stated, generating resentment between those who are paying for the support and those receiving it. While the sound German economy has people busy beavering away, the Greeks want to strike.

It would be far better if the Greeks became part of the solution rather than part of the problem, because there will come a point where those countries with the sounder economies will cry enough and we will be in a situation where Eurozone members revert back to their original currencies and support their currency at a level they can afford. They will then be left to manage their own affairs without financial support from other Eurozone members.

For me that is the best solution because it allows all Eurozone members to determine their own futures and puts the responsibility for sorting out the economic ills onto the people causing it.

Better still, each country can formulate its own plans tailored to the conditions in their own economy.It will give EU leaders a real incentive to address the issues with true leadership from the top.

Yes, makes you wonder who thought the Eurozone was a good idea in the first place doesn't it.

[Chris]

Yea, and as long as France remains in the Euro it will not be able to do the one thing a nation state should be able to do in order to redress the imbalance in unit labour costs with Germany, namely to allow the Franc to slide against the DM in order to make its exports competitive again.

In the meantime, I predict rather more French families will up sticks and join the 400,000 already living in the UK, where tax rates for the most able wealth creators are competitive (currently 50pc, dropping to 45pc next April). Thankfully the economically illiterate fools who moan how it's 'unfair' that our top rate of income tax is dropping are not running the country, and people who see the bigger picture are.

[Sirius]

Well i hope this is the start of something bigger.

http://www.bbc.co.uk/news/uk-politics-19944072

The government plans to exercise its right to opt out of 130 EU measures on law and order, Home Secretary Theresa May is set to tell MPs later.

She is expected to say control will return to the UK in two years under an opt-out agreed by the last government during Lisbon Treaty negotiations.

Prime Minister David Cameron said last week that a review of the balance of powers between the UK and the EU would be likely to lead to a referendum on the UK's relationship with the union after the next election

[Osem]

With a bit of Luck we can get out just in time for Salmond's Tartan Twits to join up.

[Sirius]

Originally Posted by Osem

With a bit of Luck we can get out just in time for Salmond's Tartan Twits to join up.