The Euro Crisis Explained...

[Phil TK]

  Baldrick: "What I want to know Sir is, before there was a Euro there were lots of different types of money that different people used. And now there's only one type of money that the foreign people use. And what I want to know is, how did we get from one state of affairs to the other state of affairs"

Blackadder: "Baldrick. Do you mean, how did the Euro start?"

Baldrick: "Yes Sir"
...
Blackadder: "Well, you see Baldrick, back in the 1980s there were many different countries all running their own finances and using different types of money. On one side you had the major economies of France, Belgium,Holland and Germany, and on the other, the weaker nations of Sp ain, Greece, Ireland, Italy and Portugal. They got together and decided that it would be much easier for everyone if they could all use the same money, have one Central Bank, and belong to one large club where everyone would be happy. This meant that there could never be a situation whereby financial meltdown would lead to social unrest, wars and crises".

Baldrick: "But this is sort of a crisis, isn't it Sir?".

Blackadder: "That's right Baldrick. You see, there was only one slight flaw with the plan".

Baldrick: "What was that then, Sir?" 
 
 

Blackadder: "It was bollocks".

[Dave48]

Yes! The assumption was that the "weaker" economies would be elevated to the position of the "stronger". No-one asked why some economies were stronger in the first place. Wishful thinking by those in their Brussels ivory towers

[dolau]

Brillaint!

[VNA - BMW Wank]

Yes! The assumption was that the "weaker" economies would be elevated to the position of the "stronger"

The first problem was membership fever.  Countries who were desperate to get in, cooked the books, and the bigger economies overlooked this in their desire to make the Euro instantly massive.
The next problem was nobody limited the weaker economies access to cheap credit.   So they borrowed and borrowed, and built and built, and asset prices soared.   On top of that nobody was tightening up weak tax regulations, so not enough was coming in to secure the loans.  Meanwhile the big strong economies got bigger and stronger selling manufacturing to the weak countries with the cheap credit.  Germany make a packet out of this, the UK didn't because it gave up on manufacturing years ago.
The third problem was credit was being created on the back of inflated asset prices, and asset packages were being passed around to create even more money that didn't exist, the UK was doing this big time too.  Brown's miracle economy was based largely on printing cash.
Of course Germany is fine, as it now has big demand for it's huge manufacturing base in the developing countries.  The UK is focced, because it ran down it's manufacturing base in favour of banking and series. 
 

[Slaninar]

After euro was introduced, peoples incomes were practically halved. Prices that were 100 German marks, soon became 100 euros (or 99   ), while pays that were 1000 German marks, are now about 500 euros.

From what's happening to Greece, it looks as if some printed pieces of paper will buy some people whole islands, even countries in a very short time. Small number of rich having it all. Give them loans they won't be able to repay and buy the whole country once it's bankrupt. Cheap labour, land, food, water...

[locksmith]

As with any politics, there are so many commentators that know exactly whats wrong and how to fix it, yet none of them ever make government.

[goldfazer]

'Specially VNA

[VNA - BMW Wank]

I think the underlying problem with the Euro is tying strong fully developed economies with weaker developing economies.  The Euro had one interest rate for all.

Right now for a country like Greece, if it was running it's own currency and setting it's own interest rate etc, it would take the required steps to devalue it's currency, that would in turn bring in revenue.  But of course it can't to that.  It can't do the obvious stuff to alleviate it's debt problems.  And of course having cooked the books, and if you like having been encouraged to cook em, it's a much bigger problem than it ever should have been or needed to be.

'Specially VNA


I only understand bits of it.  It's massively complicated.  I did get the Euro wrong, I was in favour of joining, but it turns out when you consider how badly managed it has been, well we clearly have been better of out of it.

But frankly the fact that we have destroyed our manufacturing base is a far bigger problem for us than being in the Euro would have been in respect of where we find ourselves today. 

And of course it's absolutely essential we stay within the EU.  The Euro might be a disaster, but Euro economic trading union is not.

I did get the asset bubble right.  Back in 2002/2003 I was keen to move house, I started looking and bid on a couple of places.  But I stepped back as prices went through the roof.  People laugthed when I stated that I would just sit back and wait for the prices to come back down.  The bottom line is that house prices, asset prices have to relate directly to the amount of real money that is about.  What I didn't know was that the banks, having lent all their money, sold asset packages (inflated asset packages)  to get more money to lend that frankly didn't really exist, then they did this several times over, while naturally paying themselves billions upon billions pounds for being so clever in getting this scam to work.  Nor did I have any idea who long it would take for the crash to come along, and I did begin to doubt myself.  But in the end I moved house and at an almost reasonable price (though I paid the best part of 2 grand in taxes that the elite skip)

But what we are looking at now, is two decades of stagnation.  OK make that three, as already the FT100 hasn't made real gains in 12 years as we speak. 

And what the politicians are not ready to face up to yet is that the neo liberal capitalistic experiment has failed.  It's broken and cannot be fixed.  They just want to keep digging and hope somehow the good times (which we had on printed cash) will somehow return.

[Slaninar]

When my country was in socialism, a shoe maker would make shoes. Extra shoes he doesn't need, he would sell.

Now he has to sell all his shoes, hoping he'll make enough profit to buy himself one pair.



Looking at factories. They make a machine that automates work of 5 people. Instead of letting machine do the work and let people rest, they fire 4 fifths of the workforce, and those left working have to work even harder job of servicing machines. Something very wrong with that picture. Technology, instead of making lives easier, is making problems. Those Ned Ludd guys were perhaps not that crazy after all.

[dx408]

 

[bigralphie]

I remember thinking I wish GB would join the Euro (I was doing a lot of touring at the time). Good job I not in charge lol

[Rusty]

And of course it's absolutely essential we stay within the EU.

No it isn't.  We were sold a supposed trade agreement in joining the 'common market', that's all we wanted or needed. All this extra regulation, EU directives for this and that etc are undemocratic and were never voted for. 

When my country was in socialism, a shoe maker would make shoes. Extra shoes he doesn't need, he would sell.

Now he has to sell all his shoes, hoping he'll make enough profit to buy himself one pair.  

Looking at factories. They make a machine that automates work of 5 people. Instead of letting machine do the work and let people rest, they fire 4 fifths of the workforce, and those left working have to work even harder job of servicing machines. Something very wrong with that picture. Technology, instead of making lives easier, is making problems. Those Ned Ludd guys were perhaps not that crazy after all.

Spot on there Slaninar. It's all a huge vanity project that takes no mind of ordinary people .  When reduced to a simple analysis such as the one above no amount of huffing and puffing can deflect from the truth, which is that large business interests are making a play for government.

[Motorbreath]

Spanish politicians suck, spanish voters are stupid. Fuck Spain.






By the way I am spanish

[VNA - BMW Wank]

No it isn't.  We were sold a supposed trade agreement in joining the 'common market', that's all we wanted or needed. All this extra regulation, EU directives for this and that etc are undemocratic and were never voted for.

The whole point of a common market is that it is common.  That means a level playing field, which means regulation and directives. 

If we back out of Europe, to access their market we will still have to play by their rules, but instead of having a say in the rules and shaping them we will be at the mercy of others, and if we don't play ball we'll face export restrictions.  Any talk of pulling out of Europe is economic suicide. 

[Rusty]

No it isn't.  We were sold a supposed trade agreement in joining the 'common market', that's all we wanted or needed. All this extra regulation, EU directives for this and that etc are undemocratic and were never voted for.

The whole point of a common market is that it is common.  That means a level playing field, which means regulation and directives. 

 

If it were simply a 'market' I could agree, and if those directives, rules, and regulations related solely to trade then again there would be a case for them. Unfortunately the facts are that far from simply pertaining to trade the EU has taken upon itself the mantle of government, and a government of unelected bureaucrats is not a democracy.

If we back out of Europe, to access their market we will still have to play by their rules, but instead of having a say in the rules and shaping them we will be at the mercy of others, and if we don't play ball we'll face export restrictions.  Any talk of pulling out of Europe is economic suicide.

Is Switzerland an example of this 'economic suicide' perhaps?  If so nobody appears to have told them that they are dead, consequently in their ignorance the country is doing very well indeed.  The real fear of the EU is that Greece will depart only to recover, setting an example to Spain, Portugal and others. The EU is a ruinous waste of money, and the myth of us living on the edge of Europe should we leave is a lie propagated by those that have an interest in federalism. We can trade freely with Europe without being hamstrung by global emission targets, work directives, health and safety initiatives, and other such claptrap. Besides, there are enormous emerging markets in India and China that will devour any loss of trade to Europe, and it is a share of those that we should be aiming for should the EU spits its dummy out.

[VNA - BMW Wank]

 Of course we can survive and trade outside of Europe.  But it will have an impact on us, particularly in the middle of a recession and with Europe being our biggest market. 
 

The real fear of the EU is that Greece will depart only to recover, setting an example to Spain, Portugal and others.

Greece may exit the Euro but it will stay in the EU.  In the long term it may well be best for Greece to exit.  But in the short term it's a nightmare.  And of course even right now everybody who can is moving their cash out of Greece.  How would you fancy any savings you might have being devalued by 80 or 90% overnight?  And the real fear, is it's a step into the unknown, nobody yet seems to be able to predict what will happen across Europe, and the world, when one country defaults and pulls out of the Euro experiment. 

The EU is a ruinous waste of money, and the myth of us living on the edge of Europe should we leave is a lie propagated by those that have an interest in federalism.

I'm a nationalist, I want Scottish Independence within the EU, I have no interest federalism, and while there are those politicians within the EU who dream of it, there isn't one country in the EU that would ever accept such a concept.   

We can trade freely with Europe without being hamstrung by global emission targets, work directives, health and safety initiatives, and other such claptrap.

No you can't.

Europe can't set global emission targets, but yes lowering emissions, energy conservation and a Euro energy grid are important steps towards a cleaner Europe, and again underlines the importance of the EU.  Working and H&S directives are all part of protecting ordinary people and creating a level playing field and common standards, you can't have an open market without this stuff. 
 
And of course all this saves money.  Just take CE standards for example.  Once upon a time a manufacturer had to make various different versions of one product to satisfy each market.  And of course choose which markets they would operate in.  Now it's one standard for Europe, one big market, and only one model to make for that single big market.  Those are big savings, and savings that generate economic activity and growth.    Just a shame we ran down our manufacturing capability!
Which of course we can blame Europe all we like for our woes, but the truth is it's 30 years of economic miss-management that's the root cause of our current situation. 

[Rusty]

Europe can't set global emission targets, but yes lowering emissions, energy conservation and a Euro energy grid are important steps towards a cleaner Europe, and again underlines the importance of the EU.  Working and H&S directives are all part of protecting ordinary people and creating a level playing field and common standards, you can't have an open market without this stuff.   

All this is based on an assumption.  It is the assumption that the majority of people are happy to pay higher bills for cleaner energy, or that they can afford to heed the regulatory advice of the numerous quango's.  Not only were the electorate not consulted on these matters, but their views are held in contempt. I don't agree in the slightest that you can't have an open market without having to comply with EU directives, if that were the case international trade would be very difficult, yet I see no shortage of Japanese goods in Europe.

   
And of course all this saves money.

.

Nothing about the EU saves money! 

Consider the spectacle of packing up and moving the entire government of Europe from Brussels to Strasburg once a week, then back to Brussels the following week.  Not only poorly thought out in terms of waste emissions, manpower, and EU funds, but a sillier notion I've yet to hear of. The EU is simply a bunch of bureaucrats playing with other peoples money, which they consider to be an endless supply.  I find it breathtaking that once much of Europe suffocated under the Soviet system, only to be consigned to what amounts to a modernised Soviet style system.

I agree that this country has been mismanaged and run down, which is the result of a similar set of politicians not listening to the wishes of the electorate.  People in power always display a 'we know better than you' attitude, then fuck the job up and go play golf in retirement. That's why the country is where it is today, and the very last thing we need is an unelected set of overseas politicians that consider they know better than us too.

All these EU trade limitations and working directives are nothing more than smoke and mirrors, as Switzerland and Japan have proven.  Switzerland is in the heart of Europe, it exports very little, but has a hand in banking as does the UK. Japan has nothing whatsoever to do with the EU, yet it is allowed to set up factories there to create jobs for Europeans.  Those factories on foreign soil may have to comply with EU directives, but at home in Japan they don't.  Therefore I see no reason why we should either.

[VNA - BMW Wank]

 

It is the assumption that the majority of people are happy to pay higher bills for cleaner energy, or that they can afford to heed the regulatory advice of the numerous quango's.

Recent surveys have shown that people are concerned about global warming and their environment.   The fact is we are doing too little to late, and we'll perhaps pay a much bigger price. 
 
 

Not only were the electorate not consulted on these matters, but their views are held in contempt.

Of course we are.  And if individuals, groups or organisations want to have a say, our democracy allows them to have a voice if they choose to do so.  Democracy is not just for polling day, and nor can it be run on referendum on every issue.  You elect and/or lobby. 
 

I don't agree in the slightest that you can't have an open market without having to comply with EU directives,

I doesn't matter whether you agree or not, if you want open access you have to comply with the rules.  Hence why the Japanese are in Europe, to get access they otherwise would not have, and yes they too have to play by the rules.
 

Consider the spectacle of packing up and moving the entire government of Europe from Brussels to Strasburg once a week, then back to Brussels the following week.  Not only poorly thought out in terms of waste emissions, manpower, and EU funds, but a sillier notion I've yet to hear of. The EU is simply a bunch of bureaucrats playing with other peoples money, which they consider to be an endless supply.  I find it breathtaking that once much of Europe suffocated under the Soviet system, only to be consigned to what amounts to a modernised Soviet style system.

Yes at times it's nuts.   Europe needs to get leaner and smarter, but to suggest it's totalitarian state is just being silly.
 

Those factories on foreign soil may have to comply with EU directives, but at home in Japan they don't.

As I said they are there because they want access to the market.  It's the only way they can sell the huge numbers of cars that they do in Europe, otherwise they would face trade restrictions.  And of course it works well for us, because not only do they build for Europe, they export from Europe. 
Put it this way, the UK is trying to re-build it's manufacturing base (it's finally noticed how Germany rides out all economic storms), but if we pull out of Europe (our biggest customer), well maybe we'll find ourselves playing the Japanese game and moving our factories inside Europe to access the market.  That's how stupid leaving the EU would be. 
 

I agree that this country has been mismanaged and run down, which is the result of a similar set of politicians not listening to the wishes of the electorate.

So we didn't elect Thatcher, we didn't vote for a Labour party dressed in Tory clothes.  The people get the government they deserve. 

[Motorbreath]

VNA, if a few rich people find they can make money importing something from outside the EU, they will pull the strings to open the markets.

For example a few months ago the Moroccans vegetables and olive oil were allowed to be sold inside the EU as easily as the Spanish ones. So what's the point of the EU then?

Before the single currency Spain was developing well, slowly but realistically. More important: people lived easily, everybody could buy a house and live with dignicy. Some imports were a bit more expensive, and travelling to richer countries was not so affordable. That's all. Now prices are French, but salaries remain Spanish. It is much worse in Portugal, prices-salaries there are crazy, not just now with their bailout, but since much before. Oh yes it reminds me another "good" thing about the EU: now Spanish companies are making legally portuguese contracts to spanish workers working in Spain 

[fazed600]

Saw a programme with Portillo in Greece the other week anecdotal evidence suggests the Greek people don't want to leave the the Euro as they it would mean going back to 20%+ interest rates and a corrupt government 'controlling' the countries finances. If the Greek people believed their currency would change to the Drachma and devalue, it would create even more Greek bank problems as everyone would withdrawal Euro to stick under their mattresses.

Dunno what the answer is, but Greek (& Irish etc) government debt should never have been at the same rate as German government bonds, massively different credit risks which were ignored. It was assumed that all Euro government borrowing had the same risk of default as Germany.

[VNA - BMW Wank]

VNA, if a few rich people find they can make money importing something from outside the EU, they will pull the strings to open the markets.

But that's simply not the case, as is demonstrated by the experience of the Japanese car industry.

As for food, lets not forget that the selfish Euro framing policies have been flooding third world and developing nations with cheap EU subsidised produce for decades now, in turn undermining their economies. Another area in need of real reform.   Yes a big part of the problem is that the EU has expanded rapidly for the benefit of the banks and big business.   Our economies have been living beyond their means for 30 odd years now, and finally it's catching up with us. 
I'm not arguing for the Euro (any more) and it's been a disaster because it's been so badly managed and it's problems have coincided with a global economic crash. 
But of course if the Euro implodes we will feel the chill.  Greece for example won't be able to buy much from us, their currency being worth maybe a half, a quarter or less overnight. 
What I am arguing for is staying in the Euro economic market.   I cannot see the point in leaving, we are stuck with it, so we may as well have a say and not have face possible trade restrictions.

[Rusty]

 
Recent surveys have shown that people are concerned about global warming and their environment. 

Surveys are like statistics, they can be used selectively to give a false representation of the facts and are consequently unreliable as an indicator of public mood.   
 

Of course we are.  And if individuals, groups or organisations want to have a say, our democracy allows them to have a voice if they choose to do so.  Democracy is not just for polling day, and nor can it be run on referendum on every issue.  You elect and/or lobby. 

 
 
A referendum on every issue is not what people expect. They do however, expect one on questions of fundamental life changing issues. Once an in/out referendum is put to the people of Britain we will indeed see democracy in action, until then our views are being held in contempt.

I doesn't matter whether you agree or not, if you want open access you have to comply with the rules.

This describes exactly the EU ethos. 'It doesn't matter what you may think, this is the way you will do it - or there will be implications for you'.  It's like something from a bad gangster movie.

Yes at times it's nuts.   Europe needs to get leaner and smarter, but to suggest it's totalitarian state is just being silly.

There are several parallels. How else does one describe a system whereby a sovereign country's laws are thought up and dictated from elsewhere, laws that are enforced rigidly, and by persons unelected by that nation state?  Napoleon wanted a united Europe, Hitler did too, yet we fought them both - why?
 
 

Put it this way, the UK is trying to re-build it's manufacturing base (it's finally noticed how Germany rides out all economic storms), but if we pull out of Europe (our biggest customer), well maybe we'll find ourselves playing the Japanese game and moving our factories inside Europe to access the market.  That's how stupid leaving the EU would be.

If Europeans want our services or goods then they will engage them. If the EU decide to put trade restrictions on us for being outside of it then we must look for other markets to replace them. There needn't be this fixation on Europe being our lifeline, and Blackmail is never an attractive method of doing business. If Britain is rebuilding its manufacturing base then it must compete with cheap labour from abroad, therefore we would be better served to restrict European imports by way of retaliation and provide the goods required for ourselves as we once did.
 

So we didn't elect Thatcher, we didn't vote for a Labour party dressed in Tory clothes.  The people get the government they deserve.

Indeed we did. The fundamental difference is that we were then able to kick them out for failure, an option presented to us each five years. Not so with the EU. Doesn't it bother you that the EU has never once in all its existence had its books signed off? Not once! There are sums of public money ranging into the billions that simply go missing each year, yet no one appears remotely concerned nor has the political will to find out where it went.  The whole edifice is arrogant, corrupt, and anti democratic, and the sooner we see the back of it the better.

[Slaninar]

A referendum on every issue is not what people expect. They do however, expect one on questions of fundamental life changing issues. Once an in/out referendum is put to the people of Britain we will indeed see democracy in action, until then our views are being held in contempt.

If elections could change anything, they would have been prohibited. All the politicians work for the same interest group (people with lots of money). They pretend to argue and offer different solutions, while they are just doing what they're WELL paid to do - fool masses into thinking they have a choice, it's a "free", democratic country. Every country that's ever existed has served one purpose: protect the interests of the wealthy and keep the flock obedient. Methods are slightly modulated (more crop, or more carrots), but principle is the same.

Poor will get poorer, rich will get richer. Until another communist - like revolution that will bring it back a bit, but it will start to divide again in no time - with rich-poor gap growing larger again.

[Rusty]

I completely agree with you - Orwell's Animal farm.

Our collective governments are more likely to be following policies desired by the likes of the Bilderberg group than doing anything that might actually benefit the countrymen they are supposedly representing.  It's all a sham. The reason I dislike the EU is because it is so blatant about it. The definition of fascism isn't necessarily an extreme right wing dictatorship, but any form of government that

suppresses opposition or criticism, plus regiments commerce, industry etc. You are simply not allowed to disagree with the EU diktat.

Funnily enough in English law the EU is unlawful, an inconvenient truth that is simply brushed aside by those who know it.  This is why the British constitution group was formed. In much the same way as the soldiers who fought the first world war had nothing to gain from fighting it, and thus returned to poverty and slums, I don't believe that any ordinary person has anything to fear from leaving the Eu.

[VNA - BMW Wank]

Surveys are like statistics, they can be used selectively to give a false representation of the facts and are consequently unreliable as an indicator of public mood.   

Often true.  Depends on the question, sample size, so on and so on.  But what is clear is that survey after survey is showing real concern. 

Frankly the so called 'war on terror' and our current economic woes are nothing compared to the climate related issues that are slowly gathering.  And of course you are looking at a whole new generation of technologies, that the whole globe will soon be screaming for, it's a whole new energy market, and it's up for grabs. Do we want to be sellers or buyers?   But anyway that's going off at a tangent.

Once an in/out referendum is put to the people of Britain we will indeed see democracy in action, until then our views are being held in contempt.

No you won't, you'll see a zealous right wing press pushing the interests of their wealthy press barron bosses.

 

This describes exactly the EU ethos. 'It doesn't matter what you may think, this is the way you will do it - or there will be implications for you'.  It's like something from a bad gangster movie.

No if you join a club you get access and you get a say.  You can't say, hey I want in and I want full access but I'm not joining and I'm certainly not paying.

There are several parallels. How else does one describe a system whereby a sovereign country's laws are thought up and dictated from elsewhere, laws that are enforced rigidly, and by persons unelected by that nation state?  Napoleon wanted a united Europe, Hitler did too, yet we fought them both - why?

Are you a Daily Mail reader?  Oh, and time to issue a Godwin's Law alert!  Had to happen!

If Europeans want our services or goods then they will engage them.

If we pull out, they will avoid em like the plague, and we'll have just pulled the plug on our most important market.  And any economist will tell you that your immediate neighbours are often, if not always, your most important trading partners.

Indeed we did. The fundamental difference is that we were then able to kick them out for failure, an option presented to us each five years.

Which brings me neatly back to my point.  Neither the Euro or the EU (of which has been on the whole a success) is the source of our current woes.   It does make a rather good scape goat though!  30 years of pursuing a neo capitalist agenda and ignoring the basic rules of economics are, and you know what, we, or rather England voted for it, we got what we deserved (and Scotland what England gave us).   

And running away from the biggest single market in the world (which just happens to be next door!), and just hoping you'll find something else is simply nuts. 

And you can quote me on this (help ma boab!), there will be no in/out referendum on EU membership, no, non, zip, nothing, won't happen, certainly not from the main parties, as nobody with half a brain really wants to push the big red self destruct button.    It might play well to the public, the right wing press may well love,  it might get you elected, get you noticed, but my guess is half these folks would shit their pants if it was really gonna happen.