Eurozone will collapse...

[OLD BOY]

Originally Posted by 1andrew1

The Euro's been going 20 years and survived the 2007/8 General Financial Crisis so we can't pretend it doesn't work. Despite how illogical it may all seem when viewed from Blighty.

I know what you mean, Andrew, but it doesn't work as it should and the whole set up is extremely fragile. The Greek crisis is a symptom of this, and don't forget that Spain, Portugal and Italy came pretty close to the brink - in fact, Italy is nowhere near out of the woods yet.

Sooner or later, the EU will either have to admit defeat or go federal, IMHO.

[nomadking]

Originally Posted by OLD BOY

I know what you mean, Andrew, but it doesn't work as it should and the whole set up is extremely fragile. The Greek crisis is a symptom of this, and don't forget that Spain, Portugal and Italy came pretty close to the brink - in fact, Italy is nowhere near out of the woods yet.

Sooner or later, the EU will either have to admit defeat or go federal, IMHO.

All the EU and the Euro has done is give those countries a sense of invincibility. They could recklessly borrow and spend all with relative impunity. All that "going federal" would have done is limit that spending. It couldn't improve their lot other than by doing what those countries could have easily done for themselves. Eg it was the Greeks themselves allowed so much tax evasion, not the EU.

[Osem]

This from a couple of months ago:

The European Central Bank is becoming dangerously over-extended and the whole euro project is unworkable in its current form, the founding architect of the monetary union has warned.

"One day, the house of cards will collapse,” said Professor Otmar Issing, the ECB's first chief economist and a towering figure in the construction of the single currency.

http://www.telegraph.co.uk/business/...s-ecb-prophet/

The European Central Bank is on a "slippery slope" and has in his view fatally compromised the system by bailing out bankrupt states in palpable violation of the treaties.

"The Stability and Growth Pact has more or less failed. Market discipline is done away with by ECB interventions. So there is no fiscal control mechanism from markets or politics. This has all the elements to bring disaster for monetary union.

"The no bailout clause is violated every day," he said, dismissing the European Court's approval for bailout measures as simple-minded and ideological...

... Prof Issing slammed the first Greek rescue in 2010 as little more than a bailout for German and French banks, insisting that it would have been far better to eject Greece from the euro as a salutary lesson for all. The Greeks should have been offered generous support, but only after it had restored exchange rate viability by returning to the drachma.

[OLD BOY]

Originally Posted by nomadking

All the EU and the Euro has done is give those countries a sense of invincibility. They could recklessly borrow and spend all with relative impunity. All that "going federal" would have done is limit that spending. It couldn't improve their lot other than by doing what those countries could have easily done for themselves. Eg it was the Greeks themselves allowed so much tax evasion, not the EU.

Yes, but if Greece became a state within a United States of Europe, the politicians there would have to follow the dictats of the central Government.

[nomadking]

Originally Posted by OLD BOY

Yes, but if Greece became a state within a United States of Europe, the politicians there would have to follow the dictats of the central Government.

So what is it the EU could do, even by dictat, that Greeks couldn't have done for themselves? Their choice, so they should face the consequences.

[figgyburn]

All they do is continually raise the debt ceiling,quantative easing, a.k.a.producing money out of thin air.The whole banking system is a giant ponzi scheme.Does any sane person actually think that that our/eu/usa debts will ever be brought down to balance out?.As my late dad would say "not a snowballs chance in hell".

[Osem]

Originally Posted by nomadking

So what is it the EU could do, even by dictat, that Greeks couldn't have done for themselves? Their choice, so they should face the consequences.

Given their obvious and endemic tax evasion, fiddling and living beyond their means, why were they ever allowed into the Euro-club I wonder? It seems to me that the relentless pursuit of a political pipe-dream blinded those who should have known better.

[OLD BOY]

Originally Posted by nomadking

So what is it the EU could do, even by dictat, that Greeks couldn't have done for themselves? Their choice, so they should face the consequences.

Well, they wouldn't have that choice if they were answerable to a central Government, just as North American States are answerable to Washington.

The point is, they chose to spend money like there was no tomorrow, recklessly taking unfair advantage of getting into the EU. It was their choice, granted, but they should not have been able to exercise a choice which impacted so gravely on other EU members.

Without a federal Europe, this could happen all over again with any so-called 'anti austerity' government.

---------- Post added at 13:24 ---------- Previous post was at 13:22 ----------

Originally Posted by Osem

Given their obvious and endemic tax evasion, fiddling and living beyond their means, why were they ever allowed into the Euro-club I wonder? It seems to me that the relentless pursuit of a political pipe-dream blinded those who should have known better.

Quite. This failure to see obvious consequences to decisions made is typical of the bureaucracy that is the EU.

[Osem]

Originally Posted by OLD BOY

Well, they wouldn't have that choice if they were answerable to a central Government, just as North American States are answerable to Washington.

The point is, they chose to spend money like there was no tomorrow, recklessly taking unfair advantage of getting into the EU. It was their choice, granted, but they should not have been able to exercise a choice which impacted so gravely on other EU members.

Without a federal Europe, this could happen all over again with any so-called 'anti austerity' government.

---------- Post added at 13:24 ---------- Previous post was at 13:22 ----------


Quite. This failure to see obvious consequences to decisions made is typical of the bureaucracy that is the EU.

Odd that so many folks still seem to have more faith in these people than their own elected leaders who're at least replaceable if they get it wrong. It's quite bizarre...

[Osem]

Italy's cabinet has approved a state-bailout for the country's third-largest bank, Monte dei Paschi di Siena.
Prime Minister Paolo Gentiloni said his government had authorised a €20bn ($21bn; £17.9bn) fund to support Italy's embattled banking sector.
The announcement came after Monte dei Paschi failed to raise €5bn from private investors.
The Italian bank said it would request a capital injection from the state to stay afloat.
Under new EU rules on bank bailouts, the bailout will entail a forced conversion of the bank's junior bonds - many of which are held by small investors - into shares.

http://www.bbc.co.uk/news/business-38412557

Debt bailing out debt it seems to me. Who's going to pay for it?

[Osem]

Italian lender Monte dei Paschi is facing a capital shortfall of €8.8bn (£7.5bn), higher than the €5bn previously estimated by the bank, the European Central Bank has said.
It comes after Italy approved a €20bn fund to prop up its embattled banking sector on 23 December.
Monte dei Paschi had asked for a capital injection to stay afloat.
It is carrying a mountain of bad loans made to customers who cannot afford to repay them.
In a statement from the bank on Monday, it confirmed it had officially asked the ECB to go ahead with a "precautionary recapitalisation".
This will entail a forced conversion of the bank's junior bonds - many of which are held by small investors - into shares.
'Deteriorated rapidly'
It also permits the government to buy shares or bonds on market terms endorsed by EU state aid officials.
In response, the ECB said it had calculated the capital it believed that the bank needed, based on an EU stress test of large lenders earlier this year.

http://www.bbc.co.uk/news/business-38442342

Dr Andreas Hoepner, associate professor at the Henley Business School, told BBC Radio 4's Today programme that trust in the bank, which now has a market capitalisation of less than €500m, had "deteriorated significantly".
He also questioned whether enough funds would be available to other struggling banks, given that Monte dei Paschi could use up almost half of the agreed €20bn support fund.
"We hope not too many other lenders will need support, but we don't know for sure," he said.
"The question is, is the €20bn the full sum or might the Italian government request more at a later stage?"

Yeah let's stay part of this club...

[1andrew1]

Originally Posted by Osem

http://www.bbc.co.uk/news/business-38442342

Yeah let's stay part of this club...

We're not in the Eurozone, thanks to Gordon Brown.

[pip08456]

Originally Posted by 1andrew1

We're not in the Eurozone, thanks to Gordon Brown.

So non of the expense of this corrupt, incompetent collection will land on our doorstep?

[heero_yuy]

Originally Posted by pip08456

So non of the expense of this corrupt, incompetent collection will land on our doorstep?

You can bet that so long as we have to contribute to the EU they'll find some way of fleecing us to bail out the failing Euro project.

Just another reason for a hard Brexit.

Originally Posted by pip08456

So non of the expense of this corrupt, incompetent collection will land on our doorstep?

Indirectly, it does.

Not being entangled in the Euro has meant our economy has outperformed the EU. That has led to our budget contributions becoming relatively higher.