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Revelation
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RE: Britain And The EU - What Does The Future Hold?

Thu Jan 24, 2013 7:38 pm

Quoting Aesma (Reply 98):
Until the crisis the bonds of Greece were almost as low as those of Germany, which is why they were spending like drunken sailors, they had never had so much cheap money. That's really where the system/markets/rating agencies failed.

Thanks for the info, but it doesn't change my main point that the average person didn't realize and weren't told what risk they were putting their money at by being a part of the Euro. Most people, including myself, don't have much of a grasp of high finance. It's pretty clear the speculators have a better grasp of high finance than do the lawmakers and the EU's finance officials, and the ratings agencies never seem to get blamed when they miss things.
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RE: Britain And The EU - What Does The Future Hold?

Thu Jan 24, 2013 8:57 pm

Well some manage to profit from any situation, but overall I don't know if Greece has been profitable, after all private entities had to forfeit 100 billions recently, with little hope to recover hundreds billions more.
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RE: Britain And The EU - What Does The Future Hold?

Thu Jan 24, 2013 9:12 pm

Quoting Aesma (Reply 101):
Well some manage to profit from any situation, but overall I don't know if Greece has been profitable, after all private entities had to forfeit 100 billions recently, with little hope to recover hundreds billions more.

Another good point. Such an accounting is well beyond me, but it should be done, if nothing else to prove or disprove statements such as (but not only):

Quoting aloges (Reply 85):
The financial crisis was caused by rampant speculation, an astonishing lack of oversight and corruption in e.g. Greece, not by the Euro
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RE: Britain And The EU - What Does The Future Hold?

Thu Jan 24, 2013 9:13 pm

Quoting aloges (Reply 81):
What's over the top is the way the EU is portrayed as a front for a Franco-German powergrab, a bottomless pit with no tangible benefits and, in short, the reason for all that's wrong in the UK. I like the place, quite a bit actually, but I can't stand the sort of tosh that the Daily Mail, The Sun et al keep spreading about Europe in general and the EU in particular.

While over many years they might help to shape attitudes, it does not seem to work so well at election time and their influence is diminishing, through a combination of new media and much more of their own grubby scandal and criminality being exposed to a mass audience.

Quoting lewis (Reply 99):
TheBritish should be given a referendum as soon as possible. The year proposed is just too far away. I will not even attempt to discuss whether the UK should stay in or out. As long as the British are fully informed about the pros and cons, they should be the only ones to decide what their country does.

As some of us have said, this is all about Cameron managing his party.
While he may have identified certain aspects of the EU that we don't like (and not just the British either), it does not seem much to risk a referendum on (and if what Cameron recommends voting wise loses, he's finished and he knows it).
 
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RE: Britain And The EU - What Does The Future Hold?

Fri Jan 25, 2013 2:44 am

Quoting lewis (Reply 99):
While this may be true, I am pretty sure Revelation has a point here. The Greek rates were close to Germany only when the country introduced the Euro. Did something change in the productivity of the Greek economy overnight, deserving such cheap rates? Not really. It is hard to believe that knowledgeable people in the industry were not betting on Germany and other stronger countries covering for Greece when it would eventually run out of money.

That's why I keep saying that the only longterm solution to the problem is to phase out the Euro, lewis.

The US dollar and the British pound are 'reserve currencies.' The Federal Reserve and the Bank of England (both government-backed) guarantee them. And both those governments are 'sovereign' governments, so there is no effective limit to the financial resources available - both governments have in the past needed to resort to 'printing money' to ward off recessions, and have not hesitated to do so.

The Euro, of course, is theoretically backed by the European Central Bank, but it is not a government-backed 'sovereign currency' in the same sense. Trouble is, the market has, for many years, treated it as if it was one. Because of that, it's day-to-day value has been the same in all the Eurozone countries - and every country in the Zone can borrow it at more or less the same rate. The trouble was, according to this article, that the people who set up the Euro literally 'didn't bother' to set up any sort of 'who does what?' contingency plan:-

"Expulsion and secession - While the eurozone is open to all EU member states to join once they meet the criteria, the treaty is silent on the matter of states leaving the eurozone, neither prohibiting nor permitting it. Likewise there is no provision for a state to be expelled from the euro.[23] Some, however, including the Dutch government, favour such a provision being created in the event that a heavily indebted state in the eurozone refuses to comply with an EU economic reform policy.[24]

The benefits of leaving the euro would vary depending on the exact situations. If the replacement currency were expected to devalue, the state would experience a large scale exodus of money, whereas if the currency were expected to appreciate then more money would flow into the economy. Even so a rapidly appreciating currency would be detrimental to the country's exports."


http://en.wikipedia.org/wiki/Eurozone

So there is no 'system' under which countries like Greece can be required to pay higher interest rates to borrow Euros -or to 'rein in' their deficits. Effectively, the wealthier EU countries (nowadays almost solely Germany) are guaranteeing the (spiralling) debts of the poorer ones. Which brings us to this:-

Quoting aloges (Reply 85):
The financial crisis was caused by rampant speculation, an astonishing lack of oversight and corruption in e.g. Greece, not by the Euro. The idea that countries would benefit from devaluing their currencies fails to take into account that the foreign debt of these countries and their populations would still have to be paid off in Euros, Dollars, Pounds and so on; not to mention the inflation that a devaluation would cause.

True as far as it goes, Aloges, but completely impracticable. There is no practical prospect of the weaker countries (not just Greece, there are at least half a dozen of them) ever being able to pay off their debts in Euros. Or in any other currencies, come to that. The only solution to the current problem will be the one followed in all other recessions, ever since the 1920s; to write off their debts, and have them adopt lower-valued currencies which will force them to 'live within their means,' importing only as much stuff as they can 'pay for' with their exports.

What it boils down to is that the Euro thing wasn't fully 'thought through' at the beginning - it was always a 'disaster waiting to happen.' And it will be largely up to the strongest economy in the Eurozone - Germany's - to stump up the cash to at least start on the long, painful process of putting things right.

[Edited 2013-01-24 19:00:18]
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RE: Britain And The EU - What Does The Future Hold?

Fri Jan 25, 2013 5:43 pm

Quoting NAV20 (Reply 104):

The US dollar and the British pound are 'reserve currencies.' The Federal Reserve and the Bank of England (both government-backed) guarantee them. And both those governments are 'sovereign' governments, so there is no effective limit to the financial resources available - both governments have in the past needed to resort to 'printing money' to ward off recessions, and have not hesitated to do so.
Quoting NAV20 (Reply 104):
The Euro, of course, is theoretically backed by the European Central Bank, but it is not a government-backed 'sovereign currency' in the same sense.

So essentially, developing countries in the Caribbean for example can follow the EU lead, set up a common currency without soverign backing and proceed to settle the financial problems that exist in the region?
Somehow I believe that the IMF, USA and EU would not allow any other region in the world to attempt something similar.
 
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RE: Britain And The EU - What Does The Future Hold?

Sat Jan 26, 2013 2:28 pm

Quoting par13del (Reply 105):
Somehow I believe that the IMF, USA and EU would not allow any other region in the world to attempt something similar.

Not, in my view, a matter of whether it would be 'allowed,' par13del. Fact is, any such arrangement, among 14 countries with vast differences in terms of economic 'clout,' is just plain stupid.

For quite a long period, many countries in the British Commonwealth had the 'pound' as their currency. But the Australian pound, or the New Zealand pound, or whatever, weren't 'tied' to the UK pound; they established their own value, in line with market trends.

That's all that's needed really - overprint Euro notes as German, Dutch, Greek, Spanish, Portuguese, or whatever 'Euros.' As soon as that is done, each country's currency could henceforward be revalued or devalued by the market, as conditions dictate.

That really is all it would take to solve the whole 'Eurozone Crisis.' Within a week or so........
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RE: Britain And The EU - What Does The Future Hold?

Sat Jan 26, 2013 3:43 pm

Well you have the opposite example with the CFA Franc which is tied to the euro (and before the French Franc).
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RE: Britain And The EU - What Does The Future Hold?

Sat Jan 26, 2013 6:31 pm

Are we back at that 'sovereign' currency myth?

In today's world, ALL money is fiat money, meaning its just paper guaranteed by a government or even better, by several governments, like in case of the euro.

With the ECB finally taking the long due decision to stand behind the euro in the same way that the Fed stands behind the dollar for instance, it should be no surprise confidence in the euro came back at light speed and it is one of the strongest currencies in the world once again.

BTW- may I point out this topic is about the desire of the UK to have a referendum, NOT about opinions on any currency?

[Edited 2013-01-26 10:39:33]
 
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RE: Britain And The EU - What Does The Future Hold?

Sat Jan 26, 2013 9:10 pm

Michel Rocard, minister and then Prime Minister during Thatcher's administration, is hoping for a Brixit, that way the EU can move on.
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RE: Britain And The EU - What Does The Future Hold?

Sun Jan 27, 2013 1:40 am

Quoting sabenapilot (Reply 108):
BTW- may I point out this topic is about the desire of the UK to have a referendum, NOT about opinions on any currency?

The two issues are inevitably inter-mingled, sabenapilot. Cameron, in my view, has pulled off a pretty good 'political coup' by advocating seeking changes and a subsequent referendum, rather than outright withdrawal. That will draw the teeth of the opposition parties, which would otherwise likely have had a free run to power in 2015 just by campaigning on a non-specific anti-EU ticket. And there are already signs that the 'EU Government' - basically Angela Merkel and Hollande - is prepared to give some ground:-

"EU leaders seem ready to consider how to accommodate the British, even if there is a gap between the maximum they can offer and the minimum Mr Cameron can accept.

"France seems in two minds. Some, such as Michel Rocard, a former Socialist prime minister, have said France should take advantage of a possible “Brixit”. Yet the government values Britain’s presence in the EU, particularly when it comes to defence and foreign policy. Even Mr Fabius speaks warmly of British logistical support for the French operation in Mali.

"The French president, François Hollande, told his cabinet that he wished “the UK to remain at the heart of the European Union.” His finance minister, Pierre Moscovici, said that “the European spirit is also to respect diversity.” The French are grudgingly prepared to give some ground, however symbolic.

"In Berlin, where France and Germany have just marked the 50th anniversary of the Elysée treaty (see article), there has long been an affinity with Britain on economic matters. This may explain why the signals of accommodation were stronger than in Paris. “One has to find fair compromises. In this context we are ready to talk about Britain’s wishes,” said Chancellor Angela Merkel."


http://www.economist.com/news/europe...ns-european-demands-cameron-coming

But Cameron's advocacy of 'less European regulation' is certain to 'catch the eye' of the leaders of the poorer countries in the Eurozone - starting with Greece, which (as is now revealed by this interview with the guy who runs the 'European Stability Mechanism') is now facing years of severe austerity, imposed by Brussels/Berlin:-

"Regling: In my opinion, the euro was never in danger. But of course everything is not alright. People in southern Europe are suffering. In Greece, civil servants and pensioners have seen their monthly earnings drop by 40 percent. But, as tough as these cuts may be, the situation will eventually improve, as the experience of the IMF shows.

"SPIEGEL ONLINE: IMF chief economist Olivier Blanchard recently admitted that he had underestimated the negative repercussions of the austerity programs.

"Regling: Yes, but he didn't say they could have been avoided.

"SPIEGEL ONLINE: So there hasn't been too much austerity?

"Regling: No. Of course it can be a good idea to relax austerity programs, as has now happened. But when a country has as much debt as Greece does, there's going to be a lot of suffering. There's no way around it."


http://www.spiegel.de/international/...spects-for-euro-zone-a-879725.html
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RE: Britain And The EU - What Does The Future Hold?

Sun Jan 27, 2013 9:15 am

The 2 issues are NOT intermingled at all, you simply drag the euro into every topic where Europe is being discussed and comment on the currency rather than on the referendum itself.

This topic is about the referendum the UK PM wants to hold on leaving or staying within the EU; The Euro has as much to do with that as schengen or in fact UEFA.

Care to comment what would be any acceptable "better deal" for instance?
Whether is should apply only for the UK or also for others?
What the UK would be willing to offer in turn, like for instance the go ahead for others to create a federal core?
Oh, and for once try to leave any reference to the currency out of your reply, thank you.

My take is there won't be a referendum, because Cameron is going to lose the elections in 2 years time and that's a pitty because I would have loved to see the UK out of Europe completely (so also without access to our common market of course), so the EU can move ahead.
 
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RE: Britain And The EU - What Does The Future Hold?

Sun Jan 27, 2013 10:49 am

Quoting sabenapilot (Reply 111):

My take is there won't be a referendum, because Cameron is going to lose the elections in 2 years time and that's a pitty because I would have loved to see the UK out of Europe completely (so also without access to our common market of course), so the EU can move ahead.

So this is the threat that unless the UK remains in the EU then we will denied the EU markets

Well just a couple of points

1] The UK is a net importer from the other EU countries so the EU's loss wold be greater

2] Take for example car sales to the UK from EU counties in 2011

Audi----------------------- 99900
BMW--------------------- 99700
Mercedes Benz----------71000
VW-------------------------155500 Total German Sales-- 426100

Fiat---------------------------37000
Alfa----------------------------10200 Total Italian sales-- 47200

Citreon-----------------------59600
Peugeot---------------------84150
Renault----------------------59700 Total Frenc sales-- 203450

Total sales from EU countries for 2011----------------------- 676750

This does not include
Skoda ---------------39241
Vauxhall/Opel-----204000 [ some of which is built in the UK]
Seat-------------------?

So you can see if the EU were to impose import sanctions against UK exports then I assume the UK would do similar and although there are some good car manufacturers listed above there are plenty of other choices in the world.
 
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RE: Britain And The EU - What Does The Future Hold?

Sun Jan 27, 2013 12:13 pm

Quoting sabenapilot (Reply 111):
The 2 issues are NOT intermingled at all, you simply drag the euro into every topic where Europe is being discussed and comment on the currency rather than on the referendum itself.

This topic is about the referendum the UK PM wants to hold on leaving or staying within the EU; The Euro has as much to do with that as schengen or in fact UEFA.

Maybe I just have to quote an excerpt from Cameron's speech, sabenapilot. He put the Eurozone (and its rapidly-growing division into rich countries and poor ones) 'front and centre' at the very beginning of his talk. Basically saying that unless the problems of the single currency are addressed, Europe-wide industry and trade (not just trade within the Eurozone) is going to be severely affected:-

"That is why I am here today: to acknowledge the nature of the challenges we face. To set out how I believe the European Union should respond to them. And to explain what I want to achieve for Britain and its place within the European Union.

"Let me start with the nature of the challenges we face.

"First, the eurozone.

"The future shape of Europe is being forged. There are some serious questions that will define the future of the European Union – and the future of every country within it.

"The union is changing to help fix the currency – and that has profound implications for all of us, whether we are in the single currency or not.

"Britain is not in the single currency, and we're not going to be. But we all need the eurozone to have the right governance and structures to secure a successful currency for the long term.

"And those of us outside the eurozone also need certain safeguards to ensure, for example, that our access to the single market is not in any way compromised.

"And it's right we begin to address these issues now.

"Second, while there are some countries within the EU which are doing pretty well, taken as a whole, Europe's share of world output is projected to fall by almost a third in the next two decades. This is the competitiveness challenge – and much of our weakness in meeting it is self-inflicted."


http://www.guardian.co.uk/politics/2...david-cameron-eu-speech-referendum
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RE: Britain And The EU - What Does The Future Hold?

Sun Jan 27, 2013 12:27 pm

Quoting vc10 (Reply 112):
So this is the threat that unless the UK remains in the EU then we will denied the EU markets

Well just a couple of points

1] The UK is a net importer from the other EU countries so the EU's loss wold be greater

Wrong conclusion, I guess. Britain would rather become a member of EFTA if they lave the EU, it would possibly mleave the single market but still enjoy free trade. That is, free from duties. Germany and the other countries would still sell cars in the UK, as it does in China and the USA and the rest of the world.

Actually, Britain would not have a choice other than joining EFTA, with manufacturing, service industry and cross ownership of companies integrated in the single market on a broad level. Britain could not afford to get back to the old days when each shipment arriving from the EU had to be" cleared" just to collect VAT. The mechanism to handle that would most likely remain as they are today and that includes the transfer of funds.
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RE: Britain And The EU - What Does The Future Hold?

Sun Jan 27, 2013 1:32 pm

Quoting NAV20 (Reply 113):
Maybe I just have to quote an excerpt from Cameron's speech, sabenapilot. He put the Eurozone (and its rapidly-growing division into rich countries and poor ones) 'front and centre' at the very beginning of his talk. Basically saying that unless the problems of the single currency are addressed, Europe-wide industry and trade (not just trade within the Eurozone) is going to be severely affected:

The link between the eurozone and the referendum on the UK's continued membership of the EU is not holding any grounds, since the UK in not in the eurozone and it isn't required to join either: Cameron could have used just as well an UEFA corruption scandal as reason for a referendum on the EU, really. Just because several things have 'Euro(pe)' in their name, doesn't make them 'all the same', you know?

Besides, the solution to any of the problems of the eurozone is opposed to what Cameron wants: it's MORE European integration, not less, so by linking the demand for a sort of European devolution process to the progress on further consolidation of the eurozone, Cameron shows great faulty reasoning.
 
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RE: Britain And The EU - What Does The Future Hold?

Mon Jan 28, 2013 2:30 am

Quoting sabenapilot (Reply 115):
Besides, the solution to any of the problems of the eurozone is opposed to what Cameron wants: it's MORE European integration, not less

Surely 'less' integration is an equally valid alternative solution, sabenapilot?

It didn't get a lot of publicity, but a 'rescue operation' for the poorer countries - based on the European Central Bank buying unlimited quantities of the poorer countries' bonds - was introduced back in September:-

"Mario Draghi, the president of the European Central Bank, has pushed through a controversial scheme to save the euro, trampling over German opposition.

"Stock markets on both sides of the Atlantic rallied strongly after the ECB announced that it was prepared to buy unlimited quantities of government bonds to help Europe's struggling periphery, as long as countries agreed to economic reform plans in return.

"At the same time, the ECB said that the economic outlook for the eurozone had deteriorated. It now expects the eurozone economy to shrink by 0.4% in 2012 and grow by 0.5% in 2013, while inflation rises to 2.6%.

"Draghi said the vote to start buying the bonds of crisis-hit states in unlimited amounts, in an attempt to bring governments' borrowing costs down, was "almost unanimous", with one exception.

"The scheme has faced furious opposition from German central bank chief Jens Weidmann, who argues that it is tantamount to printing money in order to pay off a country's debt, which is expressly forbidden by the ECB's mandate. He also fears the measures will fuel inflation, ease the pressure on overspending governments to get their finances in order and erode the ECB's independence."


http://www.guardian.co.uk/business/2...e-crisis-ecb-unlimited-bond-buying

The German objection was very sensible, in my opinion. The EU is dead set not just on providing unlimited financial support for the weaker economies, but also on forcing them to carry out severe austerity programmes. This means that not only will the poorer countries need limitless additional financial support for the foreseeable future - they will produce less and buy less. Which means that the wealthier EU countries - including Britain, even though it had no say in the decision - will have to pay yet more in to the EU, year by year.

Good article here which pretty well spells out what is going to happen:-

"The ECB's president brushed aside questions at his press conference about what he would do if Spain, for example, signed up to "strict and effective" conditions to trigger bond buying but then decided the conditions were too difficult to implement. In those circumstances, would the ECB really start selling Spanish bonds at a heavy loss? Gary Jenkins of Swordfish Research said this would be like the ECB putting a gun to its own head and pulling the trigger.

"A bigger problem is the economic thinking behind the plan. The Organisation for Economic Cooperation and Development in Paris said on Thursday that Italy's economy will shrink by 2.4% this year. In Spain youth unemployment is more than 50%, the banks are tottering under the weight of bad debts from a bombed-out housing market, and private capital is leaving the country at an alarming rate. Greece's economy is 20% smaller than it was four years ago.

"Put simply, Greece is in depression, Spain on the brink and Italy heading that way.

"The "rescue" plan involves governments in Rome and Italy driving their economies deeper into depression to reduce the interest rates they pay on their borrowing. The ECB seems to think that the reason investors are giving Italy and Spain the cold shoulder is that they are not cutting hard enough, fast enough. Steeped in economic orthodoxy, Draghi makes George Osborne look like a paid-up member of the Maynard Keynes appreciation society.

"The reason investors demand high interest rates when they lend to Italy and Spain is their concern about the impact of permanent recession on public finances and banks. A rescue plan that has at its core more demand-destroying measures will do more harm than good."


http://www.guardian.co.uk/business/2...draghi-rescue-plan-euro?intcmp=239

I repeat - the only policy that will put things right is for the weaker countries to revert to their own currencies, which they can then devalue as necessary to restrain imports and increase exports, thereby restoring some sort of equilibrium to their respective economies.

[Edited 2013-01-27 18:32:11]
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RE: Britain And The EU - What Does The Future Hold?

Mon Jan 28, 2013 3:07 am

Quoting RussianJet (Reply 57):
Quoting ME AVN FAN (Reply 56):
And in many respects, Switzerland as a NON EU member is more closely integrated than the UK

In what respect? Schengen, and.....oh.....that would be about it I guess.

Dublin-Agreement, ECAC, Eurovision, Carnet-ATA -- etc
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RE: Britain And The EU - What Does The Future Hold?

Mon Jan 28, 2013 7:03 am

From what I heard the UK could still have access to the EU market, it would just have to pay for it. Several billions euros a year. Less than the current contribution, but not nothing.

NAV20 : the main problem of the southern European countries is their debt and it's not going to disappear if they leave the euro, so there is no point. The "diktats" Cameron is describing are the exact same he himself imposed on Britain, or is there no austerity there ? No cuts everywhere ? No double or triple dip recession ?

As for the actions of the ECB, as we have seen there was the usual outrage from some in Germany, but nothing happened, except the "markets" are happy.
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NAV20
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RE: Britain And The EU - What Does The Future Hold?

Mon Jan 28, 2013 1:53 pm

Quoting Aesma (Reply 118):
NAV20 : the main problem of the southern European countries is their debt and it's not going to disappear if they leave the euro, so there is no point.

Have cordially to disagree, Aesma. Debts have 'disappeared' often enough in the past - once it became abundantly clear that there was no chance on Earth of the failed economies of the countries concerned ever being able to repay them. The 'Eurocrats' probably still have to learn that lesson. I guess they're just plain younger than I am, and didn't grow up (and get their economics degrees) in the aftermath of WW2, as I did........  

Places like Greece (and also Spain and Portugal, and probably Italy, Ireland etc.) just aren't going to develop vibrant, efficient, fast-growing, competitive economies overnight! Or in the next ten years, for that matter. Debts already accumulated can never be repaid - they will have eventually to be 'forgiven,' written off, whether or not the countries concerned stay with the Euro.

But if the countries concerned revert to their own currencies, which they can devalue as required, that will at least 'stop the bleeding' and offer quite a good chance of some sort of relative equilibrium developing over the next few years............

[Edited 2013-01-28 06:40:21]
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JJJ
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RE: Britain And The EU - What Does The Future Hold?

Mon Jan 28, 2013 5:41 pm

Quoting NAV20 (Reply 119):
But if the countries concerned revert to their own currencies, which they can devalue as required, that will at least 'stop the bleeding' and offer quite a good chance of some sort of relative equilibrium developing over the next few years............

You can devaluate your currency as much as you want, but your debts are still denominated in euro/whatever other hard currency you want to use.
 
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RE: Britain And The EU - What Does The Future Hold?

Tue Jan 29, 2013 10:55 am

Quoting JJJ (Reply 120):
but your debts are still denominated in euro/whatever other hard currency you want to use.

If they revert to their old currencies, JJJ, any repayments would be in that currency. Though at the appropriate rate vis a' vis the Euro, of course. But the question is academic, anyway - all the southern countries are broke, and their economies are weak, there is no way any of them are going to be able to repay more than a fraction of the money they owe:-

"Europe's debts soared from the EU-mandated limits of 60 percent of gross domestic product following the introduction of the euro in 1999, as countries from Spain to Ireland indulged in massive borrowing at very low rates of interest.

"A divide now exists between France and Germany on the one hand, where debt fell slightly in the third quarter from the second, and the economies of Ireland, Greece, Portugal, Spain and Italy, whose debt-to-GDP ratio rose in the July-September period.

"Debt in Ireland, where a burst real estate bubble forced the country into an international bailout, reached 117 percent of economic output in the quarter, while the number was 127 percent in Italy. Spain saw its burden tick up to 77 percent of GDP, and the Commission sees it reaching 97 percent in 2014.

"Greece's debt rose to 153 percent of GDP in the quarter and will reach 189 percent in 2014, although a deal struck by euro zone finance ministers and the International Monetary Fund in November aims to take it down to 124 percent by 2020.

"Rising debt is particularly worrying for Italy and Spain, the euro zone's third- and fourth-largest economies, which are in recession and need growth to cut debt and unemployment."


http://www.reuters.com/article/2013/...zone-economy-idUSBRE90M0M420130123

Indeed, just in the last few minutes, a new factor has cropped up - according to the French employment minister, France is broke as well:-

"Socialist France is 'totally bankrupt', a senior government minister admitted yesterday.

"Michel Sapin, who is in charge of the employment ministry in Paris, made it clear that his government's tax-and-spend policies are just not working.

"Just half a year since his party came to power, Mr Sapin told radio listeners: 'There is a state but it is a totally bankrupt state.

'That is why we had to put a deficit reduction plan in place, and nothing should make us turn away from that objective.'

"While the admission was unlikely to have been intentional, it highlighted huge concern at President Francois Hollande's handling of the economy."


Read more: http://www.dailymail.co.uk/news/arti...-spend-policies.html#ixzz2JMQ6mHxY
Follow us: @MailOnline on Twitter | DailyMail on Facebook

[Edited 2013-01-29 03:18:08]
"Once you have flown, you will walk the earth with your eyes turned skywards.." - Leonardo da Vinci
 
JJJ
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RE: Britain And The EU - What Does The Future Hold?

Tue Jan 29, 2013 11:20 am

Quoting NAV20 (Reply 121):
If they revert to their old currencies, JJJ, any repayments would be in that currency. But the question is academic, anyway - all the southern countries are broke, and their economies are weak, there is no way any of them are going to be able to repay more than a fraction of the money they owe:-

Only what you have borrowed in your own country. As it comes, most of the financing came from outside, in euro, so they will still be denominated in euro. No serious debtor will accept being paid in neo-drachmas.

Go ask the Argentines if you don't believe me.

Quoting NAV20 (Reply 121):
"Debt in Ireland, where a burst real estate bubble forced the country into an international bailout, reached 117 percent of economic output in the quarter, while the number was 127 percent in Italy. Spain saw its burden tick up to 77 percent of GDP, and the Commission sees it reaching 97 percent in 2014.

Whereas UK debt is close to 90%, and the US is over the 100% mark already.
 
ozglobal
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RE: Britain And The EU - What Does The Future Hold?

Tue Jan 29, 2013 11:48 am

Quoting NAV20 (Reply 121):

"Socialist France is 'totally bankrupt', a senior government minister admitted yesterday.

France has its issues, absolutely. However, you don't do much for your argument with sources like "the Daily Mail". They make stuff up and misquote. You are strangely silent on the numbers for the UK: Debt of 90% of GDP, Triple dip recession, unemployment, contracting economy....?? Very selective argumentation indeed.
When all's said and done, there'll be more said than done.
 
NAV20
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RE: Britain And The EU - What Does The Future Hold?

Tue Jan 29, 2013 12:23 pm

Quoting OzGlobal (Reply 123):
However, you don't do much for your argument with sources like "the Daily Mail". They make stuff up and misquote.

Oddly enough, I heard the quote first on our own ABC Newsradio station, OzGlobal. Googled Sapin and found the quote I linked to. So I'm sure that both news sources quoted Sapin accurately; especially the word 'bankrupt.' He's 'retracting' like mad now, of course, says he was being 'ironic.'  

"French Labor Minister Michel Sapin is finding himself in the hot seat.

"Unions representing workers at companies including Arcelor Mittal, Credit Agricole SA, Faurecia SA, PSA Peugeot Citroen (UG), Sanofi, Valeo SA and several others are gathering in front of his ministry this afternoon to protest thousands of job cuts across France, leaving the country with jobless claims at the highest in 15 years.

"The demonstrations come just days after Sapin’s remarks in a radio interview on Jan. 27 that France was “totally bankrupt” set off a storm. Asked on Radio J about Former Prime Minister Francois Fillon's comment in September 2007 that France was a “bankrupt state,” Sapin said, “But it’s a totally bankrupt state,” adding “that’s the reason we have to put deficit- reductions programs in place.” The minister immediately took back the statement, saying he was being 'ironic.'”
 http://www.bloomberg.com/news/2013-0...rotests-put-sapin-in-hot-seat.html

Fact remains, though, that virtually all the Eurozone countries are raising taxes and cutting spending - and that the weaker ones are being required to carry out drastic austerity programmes. Those policies, continent-wide, can only result in more unemployment, less trade, increased poverty.........?

Quoting OzGlobal (Reply 123):
You are strangely silent on the numbers for the UK

Still very fond of the UK, but no fan of the way they run their economy. Why do you think I brought my family here all those years ago?  

My central point is - and has always been - that the Europe-wide adoption of the Euro 'flew in the face' of conventional economic theory - that currencies should be 'sovereign.' And that it will go on doing untold harm to the security and prosperity of all the people in Europe (even including the non-Euro members) until it is phased out.

[Edited 2013-01-29 04:45:09]
"Once you have flown, you will walk the earth with your eyes turned skywards.." - Leonardo da Vinci
 
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Aesma
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RE: Britain And The EU - What Does The Future Hold?

Tue Jan 29, 2013 4:05 pm

Quoting NAV20 (Reply 124):
Asked on Radio J about Former Prime Minister Francois Fillon's comment in September 2007 that France was a “bankrupt state,” Sapin said, “But it’s a totally bankrupt state,” adding “that’s the reason we have to put deficit- reductions programs in place.” The minister immediately took back the statement, saying he was being 'ironic.'”

In context it makes all the difference. Sapin (an ironic name itself, in French) was indeed taking a jab at his predecessors, because in 2007 Fillon admitted the difficult state of the country's finances while at the same time applying his neoliberal agenda of cutting taxes, especially on the rich. Sapin is saying that his government has taken the situation seriously and has made the necessary changes. The raising of taxes is already done and they should not raise further. There is no great growth in sight but no great recession either, we can expect a deficit of 3 to 3,5% in 2013, a number the US can only dream of.
New Technology is the name we give to stuff that doesn't work yet. Douglas Adams
 
U2380
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RE: Britain And The EU - What Does The Future Hold?

Tue Jan 29, 2013 5:47 pm

Quoting OzGlobal (Reply 123):
Triple dip recession

We're not in one yet.

Quoting OzGlobal (Reply 123):
unemployment

Going down.

Quoting OzGlobal (Reply 123):
contracting economy.

It flat-lined last year

Come back in a few months time, all of those things are almost certain to occur within the first quarter. Just not yet  
 
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Dano1977
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RE: Britain And The EU - What Does The Future Hold?

Wed Jan 30, 2013 12:23 am

Quoting sabenapilot (Reply 111):

Personally with that attitude, isn't it no wonder we still have the island mentality and view everyone else as Johnny Foreigner.

Cameron has the great merit of being on the right side of the argument, in pointing out the changes Europe needs to make in order to thrive. I suspect that Cameron will get at least one good shot at it. I also suspect that European partners will play ball given that, if we British were to leave, the single market would shrink by 15 per cent, with £261.4bn in annual European exports facing extra costs; the EU budget would be some €14bn light; and Germany, the Netherlands and Finland (who write the cheques) will be awfully alone in that Northern bloc.

Without the UK in the EU, the Northern, liberal bloc would lose its blocking minority in the Council of Ministers, radically tipping the balance of power in favour of the Mediterranean – more protectionist – bloc. For example, if the UK left, Germany could find it very difficult to block proposals for “reciprocity” to be included as a tenet of EU trade policy – which could seriously hurt its exports.

Europe needs to go back and do what it does best, facilitate trade, internally and externally. It needs to stop with the one size fits all nonsense.

The UK, along with France, is one of the EU’s two major military powers and has a global network of diplomatic contacts. The UK accounts for 24% of all EU spending on defence, more than any other member state.


Europe needs Britain, and as much as it loathes me to say it... We need Europe.
The average EU official - he has the organising ability of the Italians, the flexibility of the Germans and the modesty of the French. And that's topped up by the imagination of the Belgians, the generosity of the Dutch.
 
NAV20
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RE: Britain And The EU - What Does The Future Hold?

Wed Jan 30, 2013 12:48 pm

Fascinating situation developing in France. It's becoming pretty clear that M. Sapin meant exactly what he said - for which he earns my respect. But that, since then, the French Government media managers have been desperately trying to 'sell' the idea that he didn't really mean it........

"FRANCE stoked huge fears over the Eurozone crisis yesterday — as a senior politician announced: “We are broke.”

Jobs minister Michael Sapin stunned leaders by declaring the country was “totally bankrupt”.

"He said: “There is a state but it is a totally bankrupt state.” Colleagues desperately tried to play down his outburst, saying he only meant to say French debts were “worrying”.

"But a newspaper poll showed that 80 per cent of the population agreed with him.

"And it stirred growing fears that France is the country that could rip the single currency apart with its go-slow economy and mounting debts.

"The crisis came as shares on the London stock market soared again — to their highest level since May 2008.

"The FTSE 100 closed at just under 6340 points and, in only one month, the value of Britain’s biggest companies has gone up by £111billion.

"David Buik, analyst at BGC Partners, said: “Stock markets have declared independence from economic reality!”

"France is already reeling from an exodus of wealthy individuals, such as actor Gerard Depardieu, following plans for a 75 per cent super-tax."


(Love the headline on this story - "French Toast"......... Fleet Street at its best - or should I say worst...... )

Read more: http://www.thesun.co.uk/sol/homepage...try-is-bankrupt.html#ixzz2JSht0TET
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lewis
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RE: Britain And The EU - What Does The Future Hold?

Wed Jan 30, 2013 6:49 pm

Quoting NAV20 (Reply 128):
Fascinating situation developing in France. It's becoming pretty clear that M. Sapin meant exactly what he said - for which he earns my respect.

I'm sorry but this action is far from respectful. He should have first consulted his government before making such public statements, which may cause more damage to the French economy than the troubles it may already be in.
 
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OA260
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RE: Britain And The EU - What Does The Future Hold?

Wed Jan 30, 2013 8:55 pm

Quoting Dano1977 (Reply 127):
Personally with that attitude, isn't it no wonder we still have the island mentality and view everyone else as Johnny Foreigner.

+1 its arrogance like that which makes the British public anti EU and I think fuels the flames ! One thing for sure is the Irish are quite worried about a UK exit. Its creates huge problems for the Irish if it happened.
 
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Aesma
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RE: Britain And The EU - What Does The Future Hold?

Wed Jan 30, 2013 9:57 pm

Quoting lewis (Reply 129):
I'm sorry but this action is far from respectful. He should have first consulted his government before making such public statements, which may cause more damage to the French economy than the troubles it may already be in.

He said it on a radio I never heard of. Apparently Radio J is a part-time radio sharing its frequency with three others, destined to the Jewish community in Paris.

As I said elsewhere this is a story in the UK, not in France.
New Technology is the name we give to stuff that doesn't work yet. Douglas Adams
 
lewis
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RE: Britain And The EU - What Does The Future Hold?

Wed Jan 30, 2013 10:13 pm

Quoting Aesma (Reply 131):

He said it on a radio I never heard of. Apparently Radio J is a part-time radio sharing its frequency with three others, destined to the Jewish community in Paris.

Still though, such comments can create a lot of damage to the country due to the markets reacting. Not a very smart move from a politician. We did have a lot of similar brain farts from the Greek government as well.
 
NAV20
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RE: Britain And The EU - What Does The Future Hold?

Thu Jan 31, 2013 4:43 am

Quoting lewis (Reply 129):
I'm sorry but this action is far from respectful. He should have first consulted his government before making such public statements
Quoting lewis (Reply 132):
such comments can create a lot of damage to the country due to the markets reacting. Not a very smart move from a politician.

I know that you don't mean it that way, mate, but aren't you basically saying that all politicians should henceforward ask for permission from their party leaders before telling the truth? And, it follows, either say nothing or tell outright lies if they are instructed to do so?  

Interesting press item here. The reason why the Euro is staging a bit of a 'recovery' at the moment is that the European Central Bank is buying bonds (that is, yet more debts) issued by all the weaker Eurozone countries as if there were no tomorrow. But it looks as if the only country that still has the financial resources to go on funding the ECB's operations - Germany - is beginning to worry about the risks - well, more like 'certainties' - it is facing by doing so. Germany will just end up guaranteeing the debts of pretty well every other country in the Eurozone, except possibly the Netherlands:-

"BERLIN: Euro zone countries risk ending up guaranteeing each others' debt without any formal decisions to do so, European Central Bank Governing Council member Jens Weidmann said on Wednesday.

"An all-inclusive explicit collective guarantee of debt is no longer on the agenda, but the collective risks from - hopefully only temporary - financial aid and central bank special measures have reached substantial heights," Weidmann, who also heads the German Bundesbank, said in the text of a speech to be given at an automotive industry event.

"Were these risks to remain at current levels or even rise, they could hollow out the stability culture in a similar fashion to an explicit collectivisation of debt."

"The Bundesbank chief has been a vocal critic of the ECB's decision to unveil a new government bond-purchase programme.

"Weidmann also rejected arguments that Germany should raise wages in a show of solidarity towards struggling euro zone members. He said this would only hurt the German economy in the long term, and help no one."


http://economictimes.indiatimes.com/...-weidmann/articleshow/18264034.cms

[Edited 2013-01-30 20:59:32]
"Once you have flown, you will walk the earth with your eyes turned skywards.." - Leonardo da Vinci
 
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Aesma
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RE: Britain And The EU - What Does The Future Hold?

Thu Jan 31, 2013 5:40 am

It's not necessarily new debt, at least most of it is not new debt, it's old debt that needs refinancing. And the ECB's move has had the intended effect, lowering the rate of that debt. There is a risk but in my opinion (and the opinion of the ECB) it's less than doing nothing and having Spain or Italy default.
New Technology is the name we give to stuff that doesn't work yet. Douglas Adams
 
lewis
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RE: Britain And The EU - What Does The Future Hold?

Thu Jan 31, 2013 6:39 pm

Quoting NAV20 (Reply 133):
I know that you don't mean it that way, mate, but aren't you basically saying that all politicians should henceforward ask for permission from their party leaders before telling the truth?

Not exactly. There are some things that should not be shouted out like that because they can cause panic. First of all, he is the minister of labour, not the Finance Minister, this it is not his job to comment on the matter. Second, by saying that in public, he is basically equating France's Financial state to bankruptcy. That is a very bold statement to be made and it can have very serious consequences for his country.

Do you suggest that any member of any government should be allowed to state whatever they want, whether it is the truth or a lie, whether it is on Finances, Foreign Policy or National Defense matters, without first consulting the head of the government?
 
NAV20
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RE: Britain And The EU - What Does The Future Hold?

Sat Feb 02, 2013 11:40 am

Quoting lewis (Reply 135):
Do you suggest that any member of any government should be allowed to state whatever they want, whether it is the truth or a lie, whether it is on Finances, Foreign Policy or National Defense matters, without first consulting the head of the government?

I see what you mean, lewis, but in 'real life' it simply isn't possible for politics to work like that. Ministers and such, day by day, have to go all over the place and talk to all sorts of people on all sorts of subjects. If you look closely at what M. Sapin actually said, it was:-

"Employment secretary Michel Sapin said cuts were needed to put the damaged economy back on track.

"There is a state but it is a totally bankrupt state,’ he said.

"That is why we had to put a deficit reduction plan in place, and nothing should make us turn away from that objective."


So, as far as I can see, he was 'under attack' from the press about the government's austerity measures (and, probably, his own inability to help the unemployed more). And he was basically saying that the previous government had just let things deteriorate, and that he and his colleagues could not do much about it until they had reduced the deficit to the point where they had some cash available even to start doing what will eventually need to be done.
"Once you have flown, you will walk the earth with your eyes turned skywards.." - Leonardo da Vinci

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