Quoting Baroque (Reply 49): Oh go on, not a bad line. It might even be true too if you were to go through the whole of the UK media.

"might even......."  

Steady, mate - so far the British seem to be exercising admirable restraint - personally I think they deserve due credit for that.

Especially speaking as one who was living there at the time they entered the EEC, and voted against it.......  

Still reckon I was right.........

[Edited 2011-11-10 07:38:24]

Quoting NAV20 (Reply 50): so far the British seem to be exercising admirable restraint

A diplomatic and laudable way to say the Cameron islanders have no clue...  

Quoting iakobos (Reply 51): A diplomatic and laudable way to say the Cameron islanders have no clue..

What about the C for Thighlanders*?

Part of the Cockney alphabet as in
A for orses.
B for mutton and so on.

Quoting NAV20 (Reply 50): Especially speaking as one who was living there at the time they entered the EEC, and voted against it.......

Everyone entitled to their own view I guess.

Take this puzzle, this week, how does BAE feel about its decision to abandon a nice little earner in Airbus for things military.

Just in case it takes a reminder, in the past month we see cancellations of Typhoon production and redundancies at BAE plants, while in the last few months EADS has taken orders for well over a thousand A320NEOs.

Definitely suggests good decision making on that issue.

Meanwhile the UK is having a few difficulties. Sure it is doing a better job than some in balancing its budget, but there is QE well under way, inflation at 5.2% in September. The Eurozone may have its problems but the UK is hardly free from a spot of angst????

Quoting MillwallSean (Reply 33): They had a well respected economist recommended by its creditors as the right man for PM, he was quickly brushed aside for political reasons.

A government recommended (or appointed) by the creditors. Good to know that above all, the EU is about democracy. So who was that? I hope not the one below:

Quoting slz396 (Reply 43): name the former ECB VP Lucas Papademos

Because that is exactly what Greece needs, a bad banker for PM! By bad I don't mean 'evil' by any means but lets see some things about him. He was appointed chairman of the Bank of Greece (National Bank) in the mid 90s. Here is a photo of him and PM Costas Simitis (Papademos to the right)


Papademos worked very closely with the PM to "prepare" Greece for the introduction of the EURO. That is the "cooking the books" in N.European lingo. They are both cheering and holding the brand new EUR notes while congratulating themselves for the good job they did. After that, he was offered a cushy job at the ECB, probably as a reward for the "good job" he did in Greece.

So let me get this straight. For two years now the population of a country is being bashed for "cheating" to enter the Euro but nobody sees a problem with the creditors and German/Franco axis supporting that guy to be a Prime Minister, the same person who is partly responsible for Greece being in the Eurozone right now? Is that the "respected economist" you are talking about?

Ok, it seems that this banker rather falls into the category of a crook. Does there exist a technocrat, who can get the country up to competitive standards, raise pöroductivity, encourage new industries manufacturung goods, which will have buyers abroad and who can get the whole state income/spending situation under control without causing mass poverty, who also will be accepted by the Greek public?

It seems that the top banking circles are a rather closed group, where everybody knows everybody and it is difficult for a newcomer to establish himself.

Jan

Quoting MD11Engineer (Reply 54): Does there exist a technocrat, who can get the country up to competitive standards, raise pöroductivity, encourage new industries manufacturung goods, which will have buyers abroad and who can get the whole state income/spending situation under control without causing mass poverty, who also will be accepted by the Greek public?

No, that is not the point of this whole charade. They just want someone to push through the legislation that are required by external entities before the elections that will take place next year. A puppet in other words - and of course unelected. There is no requirement for now for someone to get the country up to competitive standards in the way you describe. The only target has been to make Greek labor competitive price-wise, which can only be achieved by driving wages down to 1960s levels.

Quoting MD11Engineer (Reply 42): Ok, again, what would have happened if the Irish banks (BoI, AIB, Ulster Bank etc.) would have been left to fail? Maybe a million Irish citizens would have lost all their savings, which were used by the banks to gamble with. It would have seriously damaged Ahern´s government (which got damaged later anyway, because they couldn´t handle the crisis and were too much involved in the whole corruption affair). Next, the Irish banks lied to the Irish people and to the government, first downplaying the crisis, and then, after the bailout, not letting the money go back into the circulation, but instead use it to gamble even more. Then, who gambled in the Irish housing bubble? It was not the foreigners. Even today houses in Ireland are overpriced. Just because you spent a million on some little three up two down terrassed house, which got banged together by sloppy tradesmen out of cheap materials, doesn´t mean that it is worth it. You got suckered. Live with it. I get sick if I hear the people complaining about "negative equity". You gambled on the housing market because you thought no matter how expensive a house is to buy, you could still sell it at a higher price. Today there are lots of houses standing empty (and rotting away if they are not being maintained), because the owners still hope that they can at least get the price they paid for it. They rather let the house rot than to sell it below what they paid for it. The people involved should have looked at the Japanese housing bubble of the 1980s-1990s.

You are trying to bring this back to another issue. My point was about Ireland's alleged "budgetary indiscipline"

Quoting Baroque (Reply 52): Take this puzzle, this week, how does BAE feel about its decision to abandon a nice little earner in Airbus for things military.

How funny of you to pick that example!
A couple of years ago, NAV20 was allover this forum with his very depressing analysis of EADS being on the brink of total collapse and BAE SYSTEMS being right in jumping ship at Airbus, even though NAV20 was absolutely convinced EADS could not affort the buy-out back then... As history has shown meanwhile, EADS paid it cash and laughed all the way to the bank!
Indeed, EADS is stronger than ever, while BAE SYSTEMS should be banging its head against the wall for letting go of its 20% share in AIRBUS for what is now considered peanuts only!

Quoting lewis (Reply 53): Papademos worked very closely with the PM to "prepare" Greece for the introduction of the EURO. That is the "cooking the books" in N.European lingo. They are both cheering and holding the brand new EUR notes while congratulating themselves for the good job they did. After that, he was offered a cushy job at the ECB, probably as a reward for the "good job" he did in Greece.

Well, it sometimes takes a crook to beat the crooks: if somebody in Greece knows the wheeling and dealing of the inner circle of European finances and politics, its your newly appointed PM. Like it or not, but you're going to need somebody with excellent contacts at the ECB, the EFSF and the IMF to make sure much needed money keeps coming in while reforms imposed by Brussels will get executed and honnestly there's just nobody else in Greece with so many influence at these institutions like Papademos, so currently he's definitely the best men for the job right now.

[Edited 2011-11-10 14:05:05]

Quoting slz396 (Reply 57): Well, it sometimes takes a crook to beat the crooks

Makes sense the way you say it. Keep in mind though that the EU and its leaders cannot keep screaming foul at Greece for 'fudging the numbers' while strongly supporting the man behind it all for such a position, it's called hypocrisy. Greeks are apparently OK with him, mainly because he is a fresh face (for them) but also because few people care anymore. Confidence and interest to who governs right now it at very low levels, knowing that whoever it is, the policies are exactly the same and are dictated from the exterior of the country.

Very much to her credit, Frau Merkel has now 'spelled out' what she wants - and one can pretty well assume that Sarkozy is largely of the same mind:-

'In response to the crisis, the German Chancellor, Angela Merkel, made a dramatic call for even deeper European integration to prevent a repeat of the euro-zone debt crisis.

As the economic turmoil afflicting Italy and Greece threatened to engulf the entire European Union, Dr Merkel called for a new ''breakthrough'' treaty that would give the EU greater fiscal powers to stop member states from running up dangerous levels of debt.

Describing the atmosphere within the euro zone as ''unpleasant'', Dr Merkel insisted that to prevent the collapse of the single currency the EU must show that it was prepared to change the Lisbon Treaty, which came into force two years ago, and cement even closer ties.

''It is time for a breakthrough to a new Europe,'' she said. ''A community that says, 'Regardless of what happens in the rest of the world, it can never again change its ground rules', that simply can't survive. I'm convinced of this.''

In a clear reference to Italy's broken promises on austerity measures, Dr Merkel called for the EU to be given powers to compel a country, by stripping away its sovereignty, to honour commitments to bring budgets into line with euro-zone spending targets.

Many pundits said that, in effect, this would lead to a breakup of the 17-nation euro zone and the formation of a smaller, more centralised, currency union around France and Germany.

http://www.theage.com.au/business/me...-for-euro-zone-20111110-1n9ks.html

It's only to be expected that a majority of current EU members would not consent to what would amount to government from Bonn. So, if Merkel pushes on with this (which she has the power to do, since Germany is currently providing most of the cash being used by the ECB to prop up the weaker members), the likely result will at best be a 'two-level' EU - a small group of 'core' members and a larger group of 'associate' ones. Probably with only the first group continuing to use the Euro.

[Edited 2011-11-10 19:44:40]

To be honest, I would welcome closer fiscal union. Merkel is right - we need more europe, not less.

The only problem is getting this new magic treaty she wants passed.

Sarkozy ensured that the Irish are now so pissed off with the EU, getting that treaty passed in this country will be an absolute nightmare. We also remember the last time when France and Holland were asked to vote on the draught EU constitution. They said no. A number of other states, including the Czech republic, held up ratification of the Lisbon treaty. Dare I say it, but if Lisbon had been put to a referendum across Europe, it would have been defeated in almost every western European country.

The current situation has not been helped by the fact that Ireland and Portugal have been held to higher standards than Greece. The feeling is here in Ireland that by sticking to your program, meeting all your targets, and generally being the good boy in the EU class, you are rewarded with the ECB insisting you must pay every single bank bondholder, even unsecured ones, of debt which the Irish state is under no moral obligation to repay. Meanwhile, if you riot, strike, roll back on the commitments you made, and generally stamp your feet and make a fuss, you get another loan, and half of your debt cancelled.

Ireland and Portugal also had to fight tooth and nail for a cut in the Interest Rate when it was simply given to Greece.

These are serious considerations - there is a feeling that there are two standards, that the ECB backed us into a corner by forcing us to guarantee not only bank deposits but also ALL bank liabilities (of private banks) by threatening to withdraw credit to Irish banks, forcing the Irish Finance minister of the time to enact the famous Bank Guarantee. He was said to be so ashamed, that it hastened his death from pancraetic cancer.

People will not forget the battles that have had to be fought, or that the flow of cheap money from being part of the Euro inflated the Irish property bubble to begin with, and rightly or wrongly, they are pretty pissed off right now and in no mood to pick over yet another EU treaty. We are not really in any mood to be spoken to by our own government either. Just today, the latest in a string of cuts to capital projects (two new underground rail lines in Dublin, a new Motorway linking Dublin to the North west, and a new one linking Cork to Limerick) have been cancelled. This is infrastructure we badly needed, and we were hoping for some form of stimulus to kick start growth. But sadly not - we get more growth killing austerity which just prolongs our agony.

Passing this treaty will be next to impossible. And not just in Ireland. The mood is ugly.

I have to conclude that only Germany giving into the inevitable and allowing the ECB to become the lender of last resort will fix this situation.

After that happens, and when the furore engulfing the continent dies down, will it be time to talk about treaty change and closer fiscal union.

For now, the people are in no mood for this conversation.

Quoting shamrock604 (Reply 60): To be honest, I would welcome closer fiscal union. Merkel is right - we need more Europe, not less.

Indeed and it seems like we're moving ever closer to it.
This crisis may help achieve in just a couple of years what decades of diplomatic meetings could not get kickstarted: a true federal Europe. All those who are now gloating of Schadenfreude, may soon awaken to a reality that they never took for possible indeed: it surely wouldnt be the first time it happens to them.... in fact, if European history is anything to go by, it even is the most likely outcome!

Quoting shamrock604 (Reply 60): I have to conclude that only Germany giving int o the inevitable and allowing the ECB to become the lender of last resort will fix this situation. After that happens, and when the furore engulfing the continent dies down, will it be time to talk about treaty change and closer fiscal union

Indeed, when your house is on fire, you first put the fire out and only than do you start drawing up plans on how to integrate fireproof materials in its structures.

Germany needs to accept that the list of priorities has to be rearranged under the pressure of events. It simply missed the boat to do it in its way and they know it: there seems to be growing consensus to let the EFSF act as a real national bank now, which in effect is a first step to creating a lender of last resort, even though it still is less than ideal, because contrary to the ECB, the EFSF still has only limited resources....Give it some more time and this crisis will finally be sorted out the pragmatic iso the dogmatic way however, that much is a given, after which we can move to the much needed deeper integration...

As to having a 2-level Europe: seeing the resolve of all eurozone countries to do whatever it takes to stay in the Euro and thus belong to the core, as well as the will of the other eurozone countries to keep them in, it may very well be that the ones that today think they are right in the centre of the EU, yet not in the Euro, will have to make the all important decision whether to accept further integration and thus the Euro as their currency, or be send out and be demoted to 'associated EU member' status only... As so often, it may turn out that in the end, the British are once again going to be the onces waking up to new realities they absolutely didn't want to see happen!

[Edited 2011-11-11 03:41:26]

Quoting slz396 (Reply 61): Germany needs to accept that the list of priorities has to be rearranged under the pressure of events. It simply missed the boat to do it in its way and they know it: there's seems to be growing consensus to let the EFSF act as a real national bank now, which in effect is a first step to creating a lender of last resort, even though it still is less than ideal, because contrary to the ECB, the EFSF still has only limited resources....Give it some more time and this crisis will finally be sorted out the pragmatic iso the dogmatic way however, that much is a given, after which we can move to the much needed federal Europe...

I said in another thread that Germany´s government is a coalition of three parties, which is falling apart especially over the Euro crisis. Additionally there are federal elections next year, so the parties are already in campaign mode.
Merkel´s party (the largest coalition member), the CDU, would possibly act pragmatic and allow the ECB to act as an emergency brake, as long as it doesn´t become a habit.
The CSU, an ultraconservative and nationalist party located in Bavaria, are mainly playing their domestic audience, what we call the "Stammtisch" audience (a "Stammtisch" (regular table) is a table reserved for a goup of regular guests in a pub). Their voters are mainly smalltown people and farmers from rural Bavaria, therefore very conservative, nationalistic (even wishing to have the Bavarian king back) and Catholic. The party also has a certain reputation for cronyism and corruption.
The last party is the FDP, which up to the 1970s used to be social-libertarian, but has since then mainly become the lobby organisation of big business. They are rapidly losing voters and are trying to compensate this by proclaiming a very hard, neo-liberal doctrine of no bailouts and concessions.
Merkel´s CDU doesn´t have the votes in parliament to push through an agenda on her own. On the other hand, accepting votes from the opposition to go against her coalition partners (Social democrats, Greens and reform communists) would break the coalition apart.
As for the opposition, the social democrats and possibly the Greens would support a pragmatic line, while the leftwing reform communist party (which is the successor of the old East german communist party and which is still quite strong in the East) would oppose anything that might support the banks out of principle.

Jan

Quoting MD11Engineer (Reply 62): I said in another thread that Germany´s government is a coalition of three parties, which is falling apart especially over the Euro crisis. Additionally there are federal elections next year, so the parties are already in campaign mode..

Well, we've seen regime changes in Greece and Italy, so who knows?

If absolutely needed it might just be be that once the political obstacles in Athens and Rome and which were preventing the right reforms to be made are cleared out of the way, market pressure combined with the pressure from the other eurozone countries enforces a coalition change in Berlin too, prior to and in return for early elections...

Highly unlikely as it may seem now, who would have thought Berlusconi for instance would ever agree to step down in favour of somebody not even from his own party?

I'm fairly sure that behind the scenes, there have already been contacts to see if the SPD and/or the Green Party would be willing to help out the CDU should the current coalition explode because FDP or CSU quits...
After all, nobody genuinely believes ND in Greece suddenly decided they had enough of being in opposition and would as from now support the government in pushing through the highly unpopular austerity measures, do they? That change only came because centre-right wing parties in other eurozone countries called upon ND to do so and probably twisted their arm behind the scenes even. You can be pretty sure the European Social Democrats are currently doing just that at the SPD too, just in case, after which 'leaks' will be organized to make sure CSU and FDP know that if they keep on the hard line, they may be dumped and be lead to early elections (at a very unfavourable moment for the latter).

[Edited 2011-11-11 04:14:52]

Quoting shamrock604 (Reply 60): I have to conclude that only Germany giving into the inevitable and allowing the ECB to become the lender of last resort will fix this situation.

Quoting slz396 (Reply 61): Germany needs to accept that the list of priorities has to be rearranged under the pressure of events.

The problem as I see it, guys, is that, despite its name, the ECB is not really a 'central bank.' A 'true' central bank implies sovereignty - and the EU doesn't HAVE sovereignty. At the moment, Germany is in the 'unfortunate' position that it is just about the only Euro-based EU country running a solid surplus in both domestic and external terms, and therefore currently risks being 'condemned' effectively to become the EU's 'banker of last resort' for the foreseeable future.

If I was in Merkel's place that's the last role that I'd agree to play....

Quoting shamrock604 (Reply 60): Merkel is right - we need more europe, not less.

Largely agree - except that it really amounts to a choice; either more Europe, or a lot less..........  

I suppose that - speaking as an economist - there IS a third alternative. The Euro has only been in existence for about 12 years, as I recall. Inevitably, given that Germany is pretty 'solid' in economic terms, and France isn't doing too badly either, it has become a notably 'hard' currency. That is positively the last thing that most of the new entrants to the EU need. If Greece had stayed out of the EU, or kept its own currency, the first thing it would have done, faced with its present problems, would have been to devalue (thus making exports cheaper and imports more expensive). But, having adopted the Euro, that option is not open to Greece, or to the other 'strugglers.'

So it is more than arguable that the widespread adoption of the Euro has played an important part (very possibly the major part) in creating the mess that the EU is now in?

And, moving on from there, that 'scrubbing' the Euro and going back to each country having its own currency, which it can devalue or revalue as it wishes, might very much ease the problems that the whole EU is now facing?

Tell you one thing - I bet the Brits, at this time, are VERY glad that, all those years ago, they decided to stay out of the Euro and keep the poor old 'pound sterling'........

[Edited 2011-11-11 04:21:31]

Quoting slz396 (Reply 63): I'm fairly sure that behind the scenes, there have already been contacts to see if the SPD and/or the Green Party would be willing to help out the CDU should the current coalition explode because FDP or CSU quits... After all, nobody genuinely believes ND in Greece suddenly decided they had enough of being in opposition and would as from now support the government in pushing through the highly unpopular austerity measures, do they? That change only came because centre-right wing parties in other eurozone countries called upon ND to do so and probably twisted their arm behind the scenes even. You can be pretty sure the European Social Democrats are currently doing just that at the SPD too, just in case, after which 'leaks' will be organized to make sure CSU and FDP know that if they keep on the hard line, they may be dumped and be lead to early elections (at a very unfavourable moment for the latter).

Well, some years ago in a domestic crisis requiring reforms, the elections resulted in a "grand coalition" between the two largest parties SPD and CDU. At least for three years (towards the last year they went again into campaign mode and started to look for differences to attract voters) something got done, though the smaller parties 8which together didn´t have enough votes in parliament to challenge the grand coalition) complained about the "lack of democracy".
I understand that such a grand coalition should be the last resort, but the two parties together (Merkel belongs to the pragmatic centrist wing of her party, as did Steinmeier of the SPD) actually passed several reforms, which else would have been blocked due to individual party interests.

Jan

Quoting NAV20 (Reply 64): Largely agree - except that it really amounts to a choice; either more Europe, or a lot less..........

That would be very bad for Brussels's cafes and restaurants, with the loss of the worthleass eurocrat traffic (not payine any taxes really increases your disposable income), but not sure many other people else would miss it.

And it is not true, either - Seitzerland and Norway are out of the EU and have very cordial relations with it, even being part of Schengen, etc. The United Kingdom, Denmark and Sweden are outside of the Euro and seem to be doing fine. Just because you don't have an artificial single currency doesn't mean you can't have open borders, free trade, etc.

Once the austerity bill has been passed by both houses of parliament, the office of the Italian prime minister will have a new occupant

The Italian senate has adopted a package of austerity measures designed to avoid a bailout of the eurozone's third largest economy.
...
The austerity package foresees 59.8bn euros in savings from a mixture of spending cuts and tax rises

http://www.bbc.co.uk/news/world-europe-15688755


LA CRISI - SCENARI E CONTROMISURE
Napolitano: presto un governo condiviso
Pdl spaccato, Berlusconi prende tempo
Il Senato applaude Monti (Foto-Video) Video-commento: La corsa ai ministeri

http://www.lastampa.it/redazione/default.asp

The Berlusconi Era is coming to an end.
"Super Mario" seems to enjoy high popularity... but how long will it last?

 

Quoting Pyrex (Reply 66): The United Kingdom, Denmark and Sweden are outside of the Euro and seem to be doing fine

Not sure about Denmark and Sweden, but from what I read of British posters in another forum, it's not doing fine.

Quoting MadameConcorde (Reply 67): Super Mario" seems to enjoy high popularity... but how long will it last?

Economists as executive chiefs have a notoriously poor record. Sounds good at first, but then people simply refuse to accept him because they see a "technocrat" that has no heart for the situation on the ground. Fairly, or unfairly.

Quoting NAV20 (Reply 64): rmany is in the 'unfortunate' position that it is just about the only Euro-based EU country running a solid surplus in both domestic and external terms, and therefore currently risks being 'condemned' effectively to become the EU's 'banker of last resort' for the foreseeable future

If China slow downs, which slows down South America (both important markets for German products and big buyers of German bonds), and Europe falls into another recession, you can wave bye-bye to Germany's surplus in both places.

- - - - - - - - -

At some point, the problem is that you are not trying to please the "markets" (whatever rational pie of it is left these days), but the SPECULATORS. And you can't please speculators, they are by nature irrational and place extreme bets.

The solution would have been not to get into such heavy debt to begin with of course. But seeing all these governments slashing and slashing to satiate the speculators... not good.

Quoting Derico (Reply 68): But seeing all these governments slashing and slashing to satiate the speculators... not good.

Ultimately, heavily indebted countries or firms are (naturally) vulnerable to speculation about their collapse. This is rational, as is the anticipation of those speculators.

Quoting Flighty (Reply 69): Ultimately, heavily indebted countries or firms are (naturally) vulnerable to speculation about their collapse. This is rational, as is the anticipation of those speculators.

True. My point is not the end result, but the process in getting there.

The belief that austerity will please speculators. It wont.

I would use the (unconfortable) analogy of the cancer patient who detected the disease too late. Blasting yourself with radiation and medicine is not goinig to change the outcome. Had you had such treatements in SMALL dosages at the early stage over a longer period of time, it could have work. But you can't "make up" for lost time by increasing the level in a short time.

Either the cancer kills you, or the radiation does.

Same here: Pushing all this austerity now to make up for the past... just doens't work that way.

Austerity is bad. Excessive spending is bad.

Frugality is good.

Quoting MD11Engineer (Reply 65): some years ago in a domestic crisis requiring reforms, the elections resulted in a "grand coalition" between the two largest parties SPD and CDU

Neither of them loved it, but it just had to be done and it allowed to push through reforms which had sufficient support in Germany, but which in the normal political landscape would never have made it through parliament under the coalition agreements the biggest centrist party would have concluded with one of the small parties.

I am pretty sure that IF the need for such a Grand Coalition arises again, the same scenario is going to happen in Berlin pretty soon. However, if the newly installed governments in Greece and Italy can get the job done in a reasonable time frame, then -together with the expanded EFSF- there may be no need for such a Grand Coalition in order to accept a change in policies at the independantly operating ECB in order to let it do what any other national bank -other than the sovereign Bundesbank- regularly does...

PS: Not only is the new Greek PM the ex-VP of the ECB; the new Greek foreign minister of Greece is an ex EU commissioner, whereas Italy will as of next week most probably also have a government lead by an ex EU commissioner. Does anybody see a pattern here?  



[Edited 2011-11-11 09:55:46]