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The Euro Crisis Explained... - Phil TK - 07-06-12
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".
Re: The Euro Crisis Explained... - Dave48 - 07-06-12
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 :rolleyes
Re: The Euro Crisis Explained... - dolau - 07-06-12
Brillaint!
Re: The Euro Crisis Explained... - VNA - 07-06-12
Quote: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.
Re: The Euro Crisis Explained... - Slaninar - 07-06-12
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...
Re: The Euro Crisis Explained... - locksmith - 08-06-12
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. :eek
Re: The Euro Crisis Explained... - goldfazer - 08-06-12
'Specially VNA :lol :lol :lol
Re: The Euro Crisis Explained... - VNA - 08-06-12
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 [img alt=:lol]http://foc-u.co.uk/Smileys/efocicon/lol.gif[/img] [img alt=:lol]http://foc-u.co.uk/Smileys/efocicon/lol.gif[/img] [img alt=:lol]http://foc-u.co.uk/Smileys/efocicon/lol.gif[/img]
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.
Re: The Euro Crisis Explained... - Slaninar - 08-06-12
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.
Re: The Euro Crisis Explained... - dx408 - 08-06-12
:rollin
Re: The Euro Crisis Explained... - bigralphie - 09-06-12
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
Re: The Euro Crisis Explained... - Rusty - 09-06-12
(08-06-12, 06:06 PM)VNA link Wrote:
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. (08-06-12, 07:00 PM)Slaninar link Wrote: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.
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.
Re: The Euro Crisis Explained... - Motorbreath - 09-06-12
Spanish politicians suck, spanish voters are stupid. Fuck Spain.
By the way I am spanish :wall
Re: The Euro Crisis Explained... - VNA - 09-06-12
Quote:No it isn't. [img alt=[size=1em]
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.
[/size]
Re: The Euro Crisis Explained... - Rusty - 09-06-12
(09-06-12, 07:45 PM)VNA link Wrote:Quote:No it isn't. [img alt=(09-06-12, 07:45 PM)VNA link Wrote: 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.
(09-06-12, 07:45 PM)VNA link Wrote: 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.
Re: The Euro Crisis Explained... - VNA - 10-06-12
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.
Quote: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.
Quote: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.
Quote: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.
Re: The Euro Crisis Explained... - Rusty - 10-06-12
(10-06-12, 12:19 PM)VNA link Wrote:
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.
(10-06-12, 12:19 PM)VNA link Wrote:.
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.
Re: The Euro Crisis Explained... - VNA - 10-06-12
Quote: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.
Quote: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.
Quote: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.
Quote: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.
Quote: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.
Quote: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.
Re: The Euro Crisis Explained... - Motorbreath - 10-06-12
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 :eek
Re: The Euro Crisis Explained... - fazed600 - 10-06-12
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.