Am I the only one who can't really see Greece leaving?
They import basically everything, so if they left the euro they'd lose what, 50% of their purchasing power overnight? I don't know how long you can last on a 50% pay cut, but I'd be toast in weeks.
Something like 70% of the Greeks want to stay in the euro, and Yerp doesn't want anyone leaving and starting a trend. So I struggle to identify the actor who'll declare that Greece has to go. The debts are unpayable by Greece, but not so huge in the EU scheme of things. Given the political value attaching to the project, surely we're just going to see a managed Greek default.
I think that's absolutely right.
But the issue is that, once Greece defaults on its debts, then the government bonds held by the Greek banks become ineligible to be used as collateral. Once that happens, other banks will refuse to deal with Greek banks, irrespective of what the ratings agencies say, and once you are cut out of the international banking system, there will be a rush for the exits.
So: how could Euro exit be avoided?
Well, the ECB could announce it will indefinitely support the Greek banking sector. But that would be difficult, as it would basically be printing money to fuel capital flight. And it would be against the terms of the ECB's constitution (assuming the ratings agencies called "default", that is). Capital controls could be implemented (as they were in Cyprus and Iceland), to stop deposit flight.
There are numerous ways and means. The problem is the Greek banks. Perhaps there could be a Hellenic Banking Resolution Corporation, owned by the EU, the ECB and the IMF, which could nationalise the Greek banking sector and recapitalise it. The Greek government could then be allowed to go quietly and genuinely bust. And discussions about loss sharing could then begin.
Mr. Dair, and having no lender of last resort leading to the financial sector fleeing to the safe harbour of England.
And having no control over your interest rates.
It's mental. I get wanting independence. Wanting independence and to keep the currency is crackers.
Indeed - I get wanting independence, it is a gut issue not easily swayed by sensible argument. I think Scotland would be barmy to actually go for it, but that is the opinion of an MC english Tory. I understand how some Scots would disagree with me on that.
With that in mind:
- why the feeble, and frankly hilarious arguments about England using all of Scotland's money? Why bother? - and why a desire to keep all of the hated British (English?) institutions? The pound, the Queen, the BBC?
Is it all to try and convince the poor folk who would be shafted by a flat tax, increases in the cost of living in an independent country, those who are relying on public sector pensions, gosh, those with any pension reliance at all denominated in GBP? Is it all an effort to get Turkeys to vote for Christmas?
And so to George Osborne, the Conservative chancellor of the exchequer, the first secretary of state and the mutant of Westminster. At 44, he is scarcely recognisable as the politician he was at, say, 40. The diet and haircut that now allow him to pass for an ascetic medieval friar are actually the least of it.
OT..The Pope slams world leaders as he agrees with the climate change scientists..The same Pope whose religion encourages unlimited population growth mainly in the poorer countries of the world..joined up thinking there Popey
So the Pope thinks God is about to welsh on His covenant with Noah?
1. Rely on the fact that the rest of the Eurozone, and Germany is particular, is scared of Grexit, and will make major concessions to avoid it.
2. Build allies among the other debtor nations of Europe (specifically Spain, France, Portugal, and Italy) to make the creditors nations take notice.
3. Separate the IMF from the Eurozone, because the Eurozone was always going to give Greece a better deal.
4. If you are on the verge of a deal, always come back with "and just one more thing".
Of these, (2) fell away very quickly. The other PIIGS - who, to be fair, did take their medicine - are now in full recovery mode. Ireland grew my more than 4% last year. Spain will grow close to that this year. Portugal is running about a year behind Spain, and looks likely to top 2% growth this year. Simply put, the other debtor nations just weren't that interested in changing horses mid apocalypse.
The next to go was (3). Tsipiras strategy throughout was to tell the IMF to "fuck off", while trying to cosy up to the Eurozone heads of state. In one way this made sense - as the IMF was the hard ass - but it missed the fact that in large chunks of the Eurozone, a bail-out without IMF backing was politically impossible. Furthermore, it makes Grexit worse for Greece, as it would be done without the support of the IMF.
This left (1) and (4) still in play. And (4) had worked brilliantly well. There is absolutely no doubt that the Europeans kept making concessions on the "one last thing"... But it hasn't worked with the IMF, and now the IMF is standing firm, it's frustrating Tsipiras.
Germany in particular is still scared of (1). (The US is too, but for different reasons.) And that is why there may still be a deal. But the IMF has two conditions that the Greeks seem completely unwilling to budge one:
1. The pension age for civil servants has to rise. (As one German politician said to me, "I can't have my constituents working to 70 to pay for Greeks to retire at 55".) 2. There needs to be VAT reform (it used to be "VAT has to rise", but the IMF has modified this slightly to "there needs to be VAT reform").
Grexit looks likely, but not certain. I know the Germans thought they had a deal 10 days ago. And there's a lot of pressure on Legarde from the Americans. If there is a deal, I reckon it will be a phased increase in the Greek retirement age over the next decade, plus an extension of the number of goods over which top rate VAT is levied.
5) Greece's geographical position (Through the Black Sea to the Med/ Near the Middle East bridging to Europe) means that that when push comes to shove they know the EU/NATO/US will offer more and more concessions so it doesn't become another port for the Russians.
Grece's hand may be crap but 2-7 beats AA if noone calls your bluff.
Never mind Greece. An Italian Minister was on Radio 4 this morning threatening all sorts of unspecified revenge if other countries did not take migrants from Africa.
Not so much Mare Nostrum as Mare Vostrum when it's full of people wanting to come into the country.
Europe is fraying at the edges. And now we have IS handily ensconced on the Libyan coast a mere 400 miles from the Italian coast. If I were that Minister I'd be worrying less about migrants and more about getting a viable fighting army down there.
Am I the only one who can't really see Greece leaving?
They import basically everything, so if they left the euro they'd lose what, 50% of their purchasing power overnight? I don't know how long you can last on a 50% pay cut, but I'd be toast in weeks.
Something like 70% of the Greeks want to stay in the euro, and Yerp doesn't want anyone leaving and starting a trend. So I struggle to identify the actor who'll declare that Greece has to go. The debts are unpayable by Greece, but not so huge in the EU scheme of things. Given the political value attaching to the project, surely we're just going to see a managed Greek default.
I think that's absolutely right.
But the issue is that, once Greece defaults on its debts, then the government bonds held by the Greek banks become ineligible to be used as collateral. Once that happens, other banks will refuse to deal with Greek banks, irrespective of what the ratings agencies say, and once you are cut out of the international banking system, there will be a rush for the exits.
So: how could Euro exit be avoided?
Well, the ECB could announce it will indefinitely support the Greek banking sector. But that would be difficult, as it would basically be printing money to fuel capital flight. And it would be against the terms of the ECB's constitution (assuming the ratings agencies called "default", that is). Capital controls could be implemented (as they were in Cyprus and Iceland), to stop deposit flight.
There are numerous ways and means. The problem is the Greek banks. Perhaps there could be a Hellenic Banking Resolution Corporation, owned by the EU, the ECB and the IMF, which could nationalise the Greek banking sector and recapitalise it. The Greek government could then be allowed to go quietly and genuinely bust. And discussions about loss sharing could then begin.
A Way out, and maybe this is part of German/ECB scheming, is to force another emergency election and for Siriza to lose as the population finally says yes we want Euro and at any cost.
I did always wonder how this happened - why on earth would middle ranking army officers seize power? And why would the upper echelons of the army accept this?
Am I the only one who can't really see Greece leaving?
They import basically everything, so if they left the euro they'd lose what, 50% of their purchasing power overnight? I don't know how long you can last on a 50% pay cut, but I'd be toast in weeks.
Something like 70% of the Greeks want to stay in the euro, and Yerp doesn't want anyone leaving and starting a trend. So I struggle to identify the actor who'll declare that Greece has to go. The debts are unpayable by Greece, but not so huge in the EU scheme of things. Given the political value attaching to the project, surely we're just going to see a managed Greek default.
I think that's absolutely right.
But the issue is that, once Greece defaults on its debts, then the government bonds held by the Greek banks become ineligible to be used as collateral. Once that happens, other banks will refuse to deal with Greek banks, irrespective of what the ratings agencies say, and once you are cut out of the international banking system, there will be a rush for the exits.
So: how could Euro exit be avoided?
Well, the ECB could announce it will indefinitely support the Greek banking sector. But that would be difficult, as it would basically be printing money to fuel capital flight. And it would be against the terms of the ECB's constitution (assuming the ratings agencies called "default", that is). Capital controls could be implemented (as they were in Cyprus and Iceland), to stop deposit flight.
There are numerous ways and means. The problem is the Greek banks. Perhaps there could be a Hellenic Banking Resolution Corporation, owned by the EU, the ECB and the IMF, which could nationalise the Greek banking sector and recapitalise it. The Greek government could then be allowed to go quietly and genuinely bust. And discussions about loss sharing could then begin.
A Way out, and maybe this is part of German/ECB scheming, is to force another emergency election and for Siriza to lose as the population finally says yes we want Euro and at any cost.
I think the German plan was to offer something that looked very good to Syriza's right wing, but which was completely unacceptable to their left. So: what amounted to massive debt forgiveness (albeit via the back door), in return for economic reforms.
The idea was that Tsipiras would be forced to either: (a) get the package agreed via a referendum (to keep his Left wing in check), (b) get it approved via half the party doing a deal with ND, or (c) to cause a split in Syriza than would lead to new elections.
The EU meeting on immigration today seems likely not to reach agreement, with Italy threatening to disobey other EU rules if it does not get its way.
However, as long as naval ships keep rescuing immigrants and bringing them to EU, then it is highly likely that the immigration will continue or even increase. The one thing not on the agenda appears to be how to discourage this tide of immigration and how to deal with the people smugglers.
As some immigrants come from sub-Saharan West Africa, then they will be economic and not political immigrants.
The EU meeting on immigration today seems likely not to reach agreement, with Italy threatening to disobey other EU rules if it does not get its way.
However, as long as naval ships keep rescuing immigrants and bringing them to EU, then it is highly likely that the immigration will continue or even increase. The one thing not on the agenda appears to be how to discourage this tide of immigration and how to deal with the people smugglers.
As some immigrants come from sub-Saharan West Africa, then they will be economic and not political immigrants.
The distinction between the two (refugees and economic migrants) is becoming increasingly ridiculous. And how we're dealing with people even more ridiculous and ineffective.
Eventually, we're going to have to tear up the various Conventions, decide on how many people we want to let into Europe and where from and turn back everyone else.
Mr. Financier, we cannot possibly be surprised by the way the migration's going. We actively seek out ships nearer to Libya than Italy, we take the passengers aboard, we give them food and medicine and take them to Italy, and outside Calais they get yet more food.
The 5th scenario is that (irrespective of Greece staying in or out of the Euro) the Eurozone are moved towards speedier ever closer union (or that closer union is seen as inevitable). That will clearly affect the UK position and if it cannot negotiate something satisfactory to protect its financial markets and voting position, then it would almost inevitably mean a referendum would vote OUT. Or vote to become an 'associate' member via the EEA. This is I suppose in someways similar to Scenario 1
The EU meeting on immigration today seems likely not to reach agreement, with Italy threatening to disobey other EU rules if it does not get its way.
However, as long as naval ships keep rescuing immigrants and bringing them to EU, then it is highly likely that the immigration will continue or even increase. The one thing not on the agenda appears to be how to discourage this tide of immigration and how to deal with the people smugglers.
As some immigrants come from sub-Saharan West Africa, then they will be economic and not political immigrants.
Deter and deport, pathetic EU ineptitude that we can't emulate the Aussie or Israeli approach.
The EU meeting on immigration today seems likely not to reach agreement, with Italy threatening to disobey other EU rules if it does not get its way.
However, as long as naval ships keep rescuing immigrants and bringing them to EU, then it is highly likely that the immigration will continue or even increase. The one thing not on the agenda appears to be how to discourage this tide of immigration and how to deal with the people smugglers.
As some immigrants come from sub-Saharan West Africa, then they will be economic and not political immigrants.
There's only one way that this is going to stop happening, which is if European navies start intercepting these boats at the earliest opportunity and landing them back where they left port. Australia has stopped illegal immigration by sea almost overnight using the same method, also has the good side-effect of many fewer people losing their lives attempting the crossing.
Dair deserves some sort of award for providing an opportunity for all the PB veterans to trot out their tired, old anti-independence arguments for the umpteenth time. He's like an enthusiastic, young care worker getting one more round of 'White Cliffs of Dover' out of the residents of the local care home.
I did always wonder how this happened - why on earth would middle ranking army officers seize power? And why would the upper echelons of the army accept this?
A good question to which I would also like to know the answer. I wonder if it is as laid out in Nineteen Eighty Four where Emmanuel Goldstein's book states that society comprises the Low, the Middle and the High, and that history consists of the Middle trying to replace the High. In this analysis, the colonels would be the Middle and the generals part of the High they want to oust. The generals are close to the leadership and are not about to replace themselves, as this gains them little.
I did read that the British Army has the equivalent of a battalion (1,000 men) of colonels. A colonel normally commands a battalion himself, so for each to have a job i.e. a battalion to command, we'd need a million-strong army. We have about 8% of that, so presumably, colonel is the rank where most career officers top out, and 92% then have both time on their hands and no prospect of advancement?
Whether spending has been cut or not, it's still not commensurate with tax income. Until the middle classes in Greece start paying their taxes then the problems there will persist.
Greece has the same size public sector as Germany (not as a percentage of population, as a number of people!) and they all retire at 50 or 55. Meanwhile the average doctor 'earns' 10k Euros per year yet somehow manages to live in a large villa with pool and drives a Porsche. The numbers just don't add up.
"Mr. Bond, the Pope's a damned fool. His response to the Hebdo murders was disgraceful."
I quite agree. He talked about reacting to someone insulting someone's mother, completely failing to understand that a religion is not like someone's mother. A stupid and dangerous thing for him to say. Still, no surprise that a religious leader would seek to protect religion from criticism even if he is too dim to understand that his own religion would be wiped out if the fanatics he sought to excuse ever got into power.
Paris did get the shitty end of the stick. Having to choose which of three goddesses is the most beautiful automatically makes an enemy out of two of them.
That's true, but in that situation you can at least have some fun doing the extensive research needed to inform your decision,
Dair deserves some sort of award for providing an opportunity for all the PB veterans to trot out their tired, old anti-independence arguments for the umpteenth time. He's like an enthusiastic, young care worker getting one more round of 'White Cliffs of Dover' out of the residents of the local care home.
I put him more in the section of comic interlude.
His "UK is bust and its currency worthless" matched with iScot will go for sterlingisation is one of his better gags.
Whether spending has been cut or not, it's still not commensurate with tax income. Until the middle classes in Greece start paying their taxes then the problems there will persist.
Greece has the same size public sector as Germany (not as a percentage of population, as a number of people!) and they all retire at 50 or 55. Meanwhile the average doctor 'earns' 10k Euros per year yet somehow manages to live in a large villa with pool and drives a Porsche. The numbers just don't add up.
Indeed. Tax evasion is institutionalised. However, in constructing our morality tale, we must not ignore the fact that the Eurozone gives Germany all the advantages of an undervalued currency and Greece all the disadvantages of an overvalued one, without offsetting transfers that would be normal in a federal system.
On the question of whether default automatically leads to Grexit, I wonder if perhaps what might happen in practice is a kind of messy half-exit from the Euro? The scenario I envisage is something like this:
1) Greece goes bust, the banking system collapses.
2) Instead of leaving the Euro and creating a new currency, instead the government prints vouchers which can be used as a sort of parallel pseudo-currency, as a 'temporary measure'. It uses these to pay salaries and pensions, and passes emergency legislation forcing shopkeepers to accept them (together with draconian capital controls, of course).
It would be a bit like the old communist countries before the fall of the iron curtain, or Zimbabwe before official dollarisation. The Euro would still be in circulation (and would in theory be the official currency), with a parallel pseudo-currency which everyone would be trying to unload at derisory exchange rates.
Dair deserves some sort of award for providing an opportunity for all the PB veterans to trot out their tired, old anti-independence arguments for the umpteenth time. He's like an enthusiastic, young care worker getting one more round of 'White Cliffs of Dover' out of the residents of the local care home.
I put him more in the section of comic interlude.
His "UK is bust and its currency worthless" matched with iScot will go for sterlingisation is one of his better gags.
Why would you benchmark Weimar Reichsmarks ?
IT'S OKAY DEAR, THERE'LL BE A CUP OF TEA AND A BISCUIT IN A WEE MINUTE.
Never mind Greece. An Italian Minister was on Radio 4 this morning threatening all sorts of unspecified revenge if other countries did not take migrants from Africa.
Not so much Mare Nostrum as Mare Vostrum when it's full of people wanting to come into the country.
Europe is fraying at the edges. And now we have IS handily ensconced on the Libyan coast a mere 400 miles from the Italian coast. If I were that Minister I'd be worrying less about migrants and more about getting a viable fighting army down there.
Can you blame them?
The migrants know that if they put to sea they will be rescued and brought to Europe. Once they are in Europe, they know that they are extremely unlikely to be ever be sent home again. And, not only that, but you can be sure they'll all have heard about the EU plan to allocate however many arrive 'fairly' across all the EU countries and grant them asylum.
If you're from a poor 3rd world or war-ravished country, why on earth wouldn't you try it?
Whether spending has been cut or not, it's still not commensurate with tax income. Until the middle classes in Greece start paying their taxes then the problems there will persist.
Greece has the same size public sector as Germany (not as a percentage of population, as a number of people!) and they all retire at 50 or 55. Meanwhile the average doctor 'earns' 10k Euros per year yet somehow manages to live in a large villa with pool and drives a Porsche. The numbers just don't add up.
Indeed. Tax evasion is institutionalised. However, in constructing our morality tale, we must not ignore the fact that the Eurozone gives Germany all the advantages of an undervalued currency and Greece all the disadvantages of an overvalued one, without offsetting transfers that would be normal in a federal system.
Agreed entirely. However any structural support from Germany would have to be on the basis of serious political reform and clampdown on tax evasion in Greece.
Dare I say it but the ECJ decision this morning that leads to the possibility of printing Euros to get Greece out of its mess is now looking like the best option for everyone, yet again kicking the can another few feet metres down the road and postponing the necessary structural reforms.
On the question of whether default automatically leads to Grexit, I wonder if perhaps what might happen in practice is a kind of messy half-exit from the Euro? The scenario I envisage is something like this:
1) Greece goes bust, the banking system collapses.
2) Instead of leaving the Euro and creating a new currency, instead the government prints vouchers which can be used as a sort of parallel pseudo-currency, as a 'temporary measure'. It uses these to pay salaries and pensions, and passes emergency legislation forcing shopkeepers to accept them (together with draconian capital controls, of course).
It would be a bit like the old communist countries before the fall of the iron curtain, or Zimbabwe before official dollarisation. The Euro would still be in circulation (and would in theory be the official currency), with a parallel pseudo-currency which everyone would be trying to unload at derisory exchange rates.
You may even end up with people forced to use food banks.
The EU meeting on immigration today seems likely not to reach agreement, with Italy threatening to disobey other EU rules if it does not get its way.
However, as long as naval ships keep rescuing immigrants and bringing them to EU, then it is highly likely that the immigration will continue or even increase. The one thing not on the agenda appears to be how to discourage this tide of immigration and how to deal with the people smugglers.
As some immigrants come from sub-Saharan West Africa, then they will be economic and not political immigrants.
There's only one way that this is going to stop happening, which is if European navies start intercepting these boats at the earliest opportunity and landing them back where they left port. Australia has stopped illegal immigration by sea almost overnight using the same method, also has the good side-effect of many fewer people losing their lives attempting the crossing.
A deal (and money for it) with Tunisia to create a safe migrant refugee camp, policed by the EU and international aid agencies, on Tunisian soil would seem a sensible choice. All migrants are taken there by mare nostrum and to have their claims assessed.
EU countries can then agree what number of asylum seekers they wish to take from that, and the level. I don't think it right that free movement should allow some to claim asylum in one country (the easiest) and then use that EU citizenship to move to where they really want to go, but that's the system we have if we stay.
Whether spending has been cut or not, it's still not commensurate with tax income. Until the middle classes in Greece start paying their taxes then the problems there will persist.
Greece has the same size public sector as Germany (not as a percentage of population, as a number of people!) and they all retire at 50 or 55. Meanwhile the average doctor 'earns' 10k Euros per year yet somehow manages to live in a large villa with pool and drives a Porsche. The numbers just don't add up.
Indeed. Tax evasion is institutionalised. However, in constructing our morality tale, we must not ignore the fact that the Eurozone gives Germany all the advantages of an undervalued currency and Greece all the disadvantages of an overvalued one, without offsetting transfers that would be normal in a federal system.
This precise point, and the fact that no German I know accepts this as a valid issue, worries me rotten.
Instead, by sticking to the post-Weimar era desire for a stable currency and balanced budget, the German public is doomed to force the German political establishment to fight (and lose) the current economic crisis with the lessons and measures that were necessary 100 years ago.
My theory on Grexit:
- Greece rightly refuse to pay their debts. - EU fails to act in time, but does eventually act. Forcing Greece to exit the Euro, but keeping them in the EU. - Contagion spreads to German banking sector and other debtor countries in Eurozone - Worldwide govt debt goes bonkers (my prediction is still October, for this, with a small number of defaults causing Lehman/AIG style CDS domino effect across worldwide markets)
- About 2 years down the line, after much hardship, civil unrest and disorder across southern Europe, and eventually pressure in Northern Europe too, the ntroduction of southern/northern Euro to prevent the currency union dismantling entirely.
I dread to think of the capital controls, disruption to business and the population of Europe that this is going to cause. All to salvage a doomed European project that should have stopped going deeper in 1992....
Whether spending has been cut or not, it's still not commensurate with tax income. Until the middle classes in Greece start paying their taxes then the problems there will persist.
Greece has the same size public sector as Germany (not as a percentage of population, as a number of people!) and they all retire at 50 or 55. Meanwhile the average doctor 'earns' 10k Euros per year yet somehow manages to live in a large villa with pool and drives a Porsche. The numbers just don't add up.
Indeed. Tax evasion is institutionalised. However, in constructing our morality tale, we must not ignore the fact that the Eurozone gives Germany all the advantages of an undervalued currency and Greece all the disadvantages of an overvalued one, without offsetting transfers that would be normal in a federal system.
It is worth remembering that when the Eurozone was created, Germany was - to quote the Economist - "The Sick Man of the Euro", and it ran a current account deficit. On the other hand, Italy ran a big current account and trade surplus.
Seems to imply that involvement of Generals makes a coup more likely to succeed, less likely to be challenged, have authority, access to key command centres etc.
O/T - Am I mistaken, or do I detect in the collective behaviour of the electorate in recent times a tendency to arrange outcomes which secure maximum embarrassment and humiliation for the political class?
Whether spending has been cut or not, it's still not commensurate with tax income. Until the middle classes in Greece start paying their taxes then the problems there will persist.
Greece has the same size public sector as Germany (not as a percentage of population, as a number of people!) and they all retire at 50 or 55. Meanwhile the average doctor 'earns' 10k Euros per year yet somehow manages to live in a large villa with pool and drives a Porsche. The numbers just don't add up.
Indeed. Tax evasion is institutionalised. However, in constructing our morality tale, we must not ignore the fact that the Eurozone gives Germany all the advantages of an undervalued currency and Greece all the disadvantages of an overvalued one, without offsetting transfers that would be normal in a federal system.
It is worth remembering that when the Eurozone was created, Germany was - to quote the Economist - "The Sick Man of the Euro", and it ran a current account deficit. On the other hand, Italy ran a big current account and trade surplus.
When the rates were fixed in 2000, the discussions about how it might all play out in a future crisis were not a million miles kilometres away from what's actually happened over the past few years. If anything the crisis was exacerbated by the expansion of the Euro into new (Eastern and Southern) markets from 2004 onwards.
Germany at the turn of the century was still paying the costs of re-unification from only a decade before and was always going to benefit from a comparative undervaluation at that particular point in time, when compared to a longer-term value of the old DM against other world currencies.
Well -ve inflation was a quirk of various factors - fall in fuel prices reducing output prices etc. Deflation was never going to continue in the long run with so much UK Government borrowing.
Whether spending has been cut or not, it's still not commensurate with tax income. Until the middle classes in Greece start paying their taxes then the problems there will persist.
Greece has the same size public sector as Germany (not as a percentage of population, as a number of people!) and they all retire at 50 or 55. Meanwhile the average doctor 'earns' 10k Euros per year yet somehow manages to live in a large villa with pool and drives a Porsche. The numbers just don't add up.
Indeed. Tax evasion is institutionalised. However, in constructing our morality tale, we must not ignore the fact that the Eurozone gives Germany all the advantages of an undervalued currency and Greece all the disadvantages of an overvalued one, without offsetting transfers that would be normal in a federal system.
It is worth remembering that when the Eurozone was created, Germany was - to quote the Economist - "The Sick Man of the Euro", and it ran a current account deficit. On the other hand, Italy ran a big current account and trade surplus.
Yes there was a lot of talk at the time about how Germany had fixed at too high a rate and were suffering because of it.
They've got into the position they're in now by being very disciplined about bearing down on costs internally. Ironically their main focus was on remaining competitive with China.
Dair deserves some sort of award for providing an opportunity for all the PB veterans to trot out their tired, old anti-independence arguments for the umpteenth time. He's like an enthusiastic, young care worker getting one more round of 'White Cliffs of Dover' out of the residents of the local care home.
Seconded.
I think the SNP are well on their way to getting Full Fiscal Barnett. I note the SNP are persisting with socialist tax cutting incentives for business:
I did always wonder how this happened - why on earth would middle ranking army officers seize power? And why would the upper echelons of the army accept this?
One of the colonels was a general and they arrested the CinC of it Army. If you are thinking of trying it, then the trick is to have enough people to arrest everyone else whilst they are in bed. Once you become the police judge jury and (if needed) executioner then everything else of necessity follows.
Whether spending has been cut or not, it's still not commensurate with tax income. Until the middle classes in Greece start paying their taxes then the problems there will persist.
Greece has the same size public sector as Germany (not as a percentage of population, as a number of people!) and they all retire at 50 or 55. Meanwhile the average doctor 'earns' 10k Euros per year yet somehow manages to live in a large villa with pool and drives a Porsche. The numbers just don't add up.
Indeed. Tax evasion is institutionalised. However, in constructing our morality tale, we must not ignore the fact that the Eurozone gives Germany all the advantages of an undervalued currency and Greece all the disadvantages of an overvalued one, without offsetting transfers that would be normal in a federal system.
It is worth remembering that when the Eurozone was created, Germany was - to quote the Economist - "The Sick Man of the Euro", and it ran a current account deficit. On the other hand, Italy ran a big current account and trade surplus.
Yes there was a lot of talk at the time about how Germany had fixed at too high a rate and were suffering because of it.
They've got into the position they're in now by being very disciplined about bearing down on costs internally. Ironically their main focus was on remaining competitive with China.
Up to a point, Lord Copper. Most of it was just getting the one-time costs of reunification out of the way and resuming their long term growth.
Well -ve inflation was a quirk of various factors - fall in fuel prices reducing output prices etc. Deflation was never going to continue in the long run with so much UK Government borrowing.
Fuel prices are rising noticeably (8+p alitre) round here.
Dair deserves some sort of award for providing an opportunity for all the PB veterans to trot out their tired, old anti-independence arguments for the umpteenth time. He's like an enthusiastic, young care worker getting one more round of 'White Cliffs of Dover' out of the residents of the local care home.
Seconded.
I think the SNP are well on their way to getting Full Fiscal Barnett. I note the SNP are persisting with socialist tax cutting incentives for business:
I think its time the SNP started listening to David Starkey and the MSM's political commentators and pursuing proper socialist policies !!
Indeed, the SNP is not a left-wing party and Scotland not a left-wing country, unless left-wing is defined to mean: "not overkeen on the Conservatives".
On the question of whether default automatically leads to Grexit, I wonder if perhaps what might happen in practice is a kind of messy half-exit from the Euro? The scenario I envisage is something like this:
1) Greece goes bust, the banking system collapses.
2) Instead of leaving the Euro and creating a new currency, instead the government prints vouchers which can be used as a sort of parallel pseudo-currency, as a 'temporary measure'. It uses these to pay salaries and pensions, and passes emergency legislation forcing shopkeepers to accept them (together with draconian capital controls, of course).
It would be a bit like the old communist countries before the fall of the iron curtain, or Zimbabwe before official dollarisation. The Euro would still be in circulation (and would in theory be the official currency), with a parallel pseudo-currency which everyone would be trying to unload at derisory exchange rates.
You may even end up with people forced to use food banks.
Oh, another sly little leftie reference to the horror of the UK's food banks.
Tell me, is it Labour policy to dismantle all food banks?
Or is it Labour policy to end the NEED for people to use them, because all current users will have enough money in their pockets to buy all the food they need? In which case, perhaps you'd like to share with the class what the policies are to bring that about? Because the last lot - based on milking the rich til the pips squeaked - just got thrown out in your most humiliating election defeat in thirty years.
I'd STFU about food banks if I were in your position.
On the question of whether default automatically leads to Grexit, I wonder if perhaps what might happen in practice is a kind of messy half-exit from the Euro? The scenario I envisage is something like this:
1) Greece goes bust, the banking system collapses.
2) Instead of leaving the Euro and creating a new currency, instead the government prints vouchers which can be used as a sort of parallel pseudo-currency, as a 'temporary measure'. It uses these to pay salaries and pensions, and passes emergency legislation forcing shopkeepers to accept them (together with draconian capital controls, of course).
It would be a bit like the old communist countries before the fall of the iron curtain, or Zimbabwe before official dollarisation. The Euro would still be in circulation (and would in theory be the official currency), with a parallel pseudo-currency which everyone would be trying to unload at derisory exchange rates.
You may even end up with people forced to use food banks.
Oh, another sly little leftie reference to the horror of the UK's food banks.
Tell me, is it Labour policy to dismantle all food banks?
Or is it Labour policy to end the NEED for people to use them, because all current users will have enough money in their pockets to buy all the food they need? In which case, perhaps you'd like to share with the class what the policies are to bring that about? Because the last lot - based on milking the rich til the pips squeaked - just got thrown out in your most humiliating election defeat in thirty years.
I'd STFU about food banks if I were in your position.
It's not an impartial source, and anecdotal, but I caught 10 mins of Benefits Britain on Sunday. The mother of three young children, all under the age of 12, was thinking of resorting to a foodbank because she couldn't afford to pay for three smartphone bills, for her and two of her kids, and pay for the families food.
My wife and I both said that cancelling the phone contracts would be our first move, but this seems to be unthinkable in parts of modern Britain.
This precise point, and the fact that no German I know accepts this as a valid issue, worries me rotten.
Instead, by sticking to the post-Weimar era desire for a stable currency and balanced budget, the German public is doomed to force the German political establishment to fight (and lose) the current economic crisis with the lessons and measures that were necessary 100 years ago.
My theory on Grexit:
- Greece rightly refuse to pay their debts. - EU fails to act in time, but does eventually act. Forcing Greece to exit the Euro, but keeping them in the EU. - Contagion spreads to German banking sector and other debtor countries in Eurozone - Worldwide govt debt goes bonkers (my prediction is still October, for this, with a small number of defaults causing Lehman/AIG style CDS domino effect across worldwide markets)
- About 2 years down the line, after much hardship, civil unrest and disorder across southern Europe, and eventually pressure in Northern Europe too, the ntroduction of southern/northern Euro to prevent the currency union dismantling entirely.
I dread to think of the capital controls, disruption to business and the population of Europe that this is going to cause. All to salvage a doomed European project that should have stopped going deeper in 1992....
The fears of contagion are greatly over-egged. In 2007/08 when Lehman etc were falling it was a real risk as the whole industry was interconnected deeply. In 2010 it was possible with Greece as so many other nations (Portugal, Ireland, Italy, Spain) were also teetering on the precipice of disaster.
In the last close to a decade now though everyone has known that Grexit was a possibility. The reality is that private capital fled Greece a long time ago and any eventual Grexit is not a shock that will cause contagion.
When the rates were fixed in 2000, the discussions about how it might all play out in a future crisis were not a million miles kilometres away from what's actually happened over the past few years. If anything the crisis was exacerbated by the expansion of the Euro into new (Eastern and Southern) markets from 2004 onwards.
Germany at the turn of the century was still paying the costs of re-unification from only a decade before and was always going to benefit from a comparative undervaluation at that particular point in time, when compared to a longer-term value of the old DM against other world currencies.
Reading through old Economists, I'm not sure you're memory is right. The biggest concerns in the editorial from April 1999 (four months in) was that monetary policy was too much geared towards the high growth economies of the Eurozone (Spain and Ireland), and wasn't helping Germany get out of its slump!
But like so many economic issues, it was naturally self righting. Germany's boom of the last decade was the consequence of its 1990s slump.
Firstly, when Germany reunified it put enormous downward pressure on wages and created a large number of unemployed which kept a lid on wages even when the economy started to perform in the early 2000s. This meant that Germany was not hitting capacity constraints at a time when other economies were, and meant its wages were structurally lower at the the time of the Eurozone and Global Financial crises. Secondly, Germany's great export industries are capital goods - led by companies like Siemens, Schnieder and the like. These are companies that benefit when other countries are in the midst of their own investment booms. So, when China industrialised it was by buying the machines that make things from Germany. (Germany is - or was - pretty much the only developed country that runs a trade surplus with China.) Thirdly, in the early 2000s, Germany implemented the Hartz reforms, which were a series of measures that dramatically liberalised the labour market.
On the question of whether default automatically leads to Grexit, I wonder if perhaps what might happen in practice is a kind of messy half-exit from the Euro? The scenario I envisage is something like this:
1) Greece goes bust, the banking system collapses.
2) Instead of leaving the Euro and creating a new currency, instead the government prints vouchers which can be used as a sort of parallel pseudo-currency, as a 'temporary measure'. It uses these to pay salaries and pensions, and passes emergency legislation forcing shopkeepers to accept them (together with draconian capital controls, of course).
It would be a bit like the old communist countries before the fall of the iron curtain, or Zimbabwe before official dollarisation. The Euro would still be in circulation (and would in theory be the official currency), with a parallel pseudo-currency which everyone would be trying to unload at derisory exchange rates.
You may even end up with people forced to use food banks.
Oh, another sly little leftie reference to the horror of the UK's food banks.
Tell me, is it Labour policy to dismantle all food banks?
Or is it Labour policy to end the NEED for people to use them, because all current users will have enough money in their pockets to buy all the food they need? In which case, perhaps you'd like to share with the class what the policies are to bring that about? Because the last lot - based on milking the rich til the pips squeaked - just got thrown out in your most humiliating election defeat in thirty years.
I'd STFU about food banks if I were in your position.
It's not an impartial source, and anecdotal, but I caught 10 mins of Benefits Britain on Sunday. The mother of three young children, all under the age of 12, was thinking of resorting to a foodbank because she couldn't afford to pay for three smartphone bills, for her and two of her kids, and pay for the families food.
My wife and I both said that cancelling the phone contracts would be our first move, but this seems to be unthinkable in parts of modern Britain.
A mother who puts their child having a phone ahead of having proper food does not, old-fashioned witch that I am, appear to have her priorities straight.
But there again I grew up in a rented flat with no central heating, no washing machine and no TV but with a garden and the most delicious food imaginable every single day.
It is, however, a must-read for anyone wanting to understand the Conservatives' ground game in 2015 and where it is likely to go in future.
That is a really quite insightful article about the detail of the campaign planning and execution, much more than we have seen before.
Clearly a lot of thought went into the targeting, and much was kept deliberately below the radar of the press and general public, although I do find it amusing that they were surprised to discover that offering food and beer to young volunteers might encourage turnout!!
I think I might dust off my CV and ask them if they need an IT consultant to help with the next election
On the question of whether default automatically leads to Grexit, I wonder if perhaps what might happen in practice is a kind of messy half-exit from the Euro? The scenario I envisage is something like this:
1) Greece goes bust, the banking system collapses.
2) Instead of leaving the Euro and creating a new currency, instead the government prints vouchers which can be used as a sort of parallel pseudo-currency, as a 'temporary measure'. It uses these to pay salaries and pensions, and passes emergency legislation forcing shopkeepers to accept them (together with draconian capital controls, of course).
It would be a bit like the old communist countries before the fall of the iron curtain, or Zimbabwe before official dollarisation. The Euro would still be in circulation (and would in theory be the official currency), with a parallel pseudo-currency which everyone would be trying to unload at derisory exchange rates.
You may even end up with people forced to use food banks.
Oh, another sly little leftie reference to the horror of the UK's food banks.
Tell me, is it Labour policy to dismantle all food banks?
Or is it Labour policy to end the NEED for people to use them, because all current users will have enough money in their pockets to buy all the food they need? In which case, perhaps you'd like to share with the class what the policies are to bring that about? Because the last lot - based on milking the rich til the pips squeaked - just got thrown out in your most humiliating election defeat in thirty years.
I'd STFU about food banks if I were in your position.
It's not an impartial source, and anecdotal, but I caught 10 mins of Benefits Britain on Sunday. The mother of three young children, all under the age of 12, was thinking of resorting to a foodbank because she couldn't afford to pay for three smartphone bills, for her and two of her kids, and pay for the families food.
My wife and I both said that cancelling the phone contracts would be our first move, but this seems to be unthinkable in parts of modern Britain.
I think phones are needed for jobs and stuff to be contactable these days. That said you can get a sim only deal for around £12/mth average bill (Well mine is anyway), combine with a cheap phone and you can save £s. Those £30/mth phone contracts with the "free" upgrades cost a fortune when you work it out.
1 phone amongst the whole family should suffice too if you're in that sort of financial situation too.
On the question of whether default automatically leads to Grexit, I wonder if perhaps what might happen in practice is a kind of messy half-exit from the Euro? The scenario I envisage is something like this:
1) Greece goes bust, the banking system collapses.
2) Instead of leaving the Euro and creating a new currency, instead the government prints vouchers which can be used as a sort of parallel pseudo-currency, as a 'temporary measure'. It uses these to pay salaries and pensions, and passes emergency legislation forcing shopkeepers to accept them (together with draconian capital controls, of course).
It would be a bit like the old communist countries before the fall of the iron curtain, or Zimbabwe before official dollarisation. The Euro would still be in circulation (and would in theory be the official currency), with a parallel pseudo-currency which everyone would be trying to unload at derisory exchange rates.
You may even end up with people forced to use food banks.
Oh, another sly little leftie reference to the horror of the UK's food banks.
Tell me, is it Labour policy to dismantle all food banks?
Or is it Labour policy to end the NEED for people to use them, because all current users will have enough money in their pockets to buy all the food they need? In which case, perhaps you'd like to share with the class what the policies are to bring that about? Because the last lot - based on milking the rich til the pips squeaked - just got thrown out in your most humiliating election defeat in thirty years.
I'd STFU about food banks if I were in your position.
It's not an impartial source, and anecdotal, but I caught 10 mins of Benefits Britain on Sunday. The mother of three young children, all under the age of 12, was thinking of resorting to a foodbank because she couldn't afford to pay for three smartphone bills, for her and two of her kids, and pay for the families food.
My wife and I both said that cancelling the phone contracts would be our first move, but this seems to be unthinkable in parts of modern Britain.
A mother who puts their child having a phone ahead of having proper food does not, old-fashioned witch that I am, appear to have her priorities straight.
But there again I grew up in a rented flat with no central heating, no washing machine and no TV but with a garden and the most delicious food imaginable every single day.
Yes, and I think it's more in this instance she knew she could get free food if she really did run out of money. That was an easier option that depriving herself and her kids of their phones.
Obviously, the right thing for Greece to have done at the start of this year was to leave the Euro, and move to the New Drachma. They should have done this with the full support of the IMF, and then - following capital controls - come to a new arrangement with the Eurozone.
The were a number of reasons why they didn't do this:
1. IMF support would continue to require reforms to the labour market, and to pensions. There was no free lunch, and the Greek government would still need to do things it had promised were not necessary.
2. Support for remaining in the Euro is very high in Greece. (It was the implicit policy of successive governments to devalue people's savings through inflation. That is, of course, equivalent in effect to a tax on people's bank accounts.) Because many people lived through the destruction of their savings, support for the Euro is surprisingly high.
The issue Syriza has is that they promised the impossible: no more austerity and we can stay in the Euro... because...
The honest thing to have said was "The Euro isn't working for Greece. Our unemployment is astronomical, and it will be easier to adjust wages downward through a devaluation. We've also been far too generous with our pension promises, and we collect too little tax. Irrespective of our currency, that needs to change."
But Syriza wasn't elected on a back of honesty, but on a platform of "they're picking on us! they want to humiliate us! we'll stand up for the Greeks!"
It's worth remembering something else. Between 1999 and 2007, most Eurozone governments dramatically reduced their indebtedness. Italy, Ireland and Spain dropped 20%, and while I don't know the numbers for France and Germany off the top of my head, I'm sure they're similar. Greece, on the other hand, went from 70% of GDP to 100%. While everyone else used the Eurozone boom of the early 2000s to pay off debt, Greece layered it on.
The EU meeting on immigration today seems likely not to reach agreement, with Italy threatening to disobey other EU rules if it does not get its way.
However, as long as naval ships keep rescuing immigrants and bringing them to EU, then it is highly likely that the immigration will continue or even increase. The one thing not on the agenda appears to be how to discourage this tide of immigration and how to deal with the people smugglers.
As some immigrants come from sub-Saharan West Africa, then they will be economic and not political immigrants.
The distinction between the two (refugees and economic migrants) is becoming increasingly ridiculous. And how we're dealing with people even more ridiculous and ineffective.
Eventually, we're going to have to tear up the various Conventions, decide on how many people we want to let into Europe and where from and turn back everyone else.
As Matthew Parris pointed out 11 years ago, when he asked what would Europe do if the entire population of Kurdistan upped sticks, and headed to Europe.
Who can blame anybody for wanting to leave a third world cesspit? As you say, it makes no difference from an ethical point of view if someone is leaving due to religious persecution, the threat of rape by their uncle, or because the crops have failed. But, Europe cannot take everybody who wants to leave.
It's worth remembering something else. Between 1999 and 2007, most Eurozone governments dramatically reduced their indebtedness. Italy, Ireland and Spain dropped 20%, and while I don't know the numbers for France and Germany off the top of my head, I'm sure they're similar. Greece, on the other hand, went from 70% of GDP to 100%. While everyone else used the Eurozone boom of the early 2000s to pay off debt, Greece layered it on.
I've just checked my numbers, Greece debt-to-GDP went from 93% to 110%.
When the rates were fixed in 2000, the discussions about how it might all play out in a future crisis were not a million miles kilometres away from what's actually happened over the past few years. If anything the crisis was exacerbated by the expansion of the Euro into new (Eastern and Southern) markets from 2004 onwards.
Germany at the turn of the century was still paying the costs of re-unification from only a decade before and was always going to benefit from a comparative undervaluation at that particular point in time, when compared to a longer-term value of the old DM against other world currencies.
Reading through old Economists, I'm not sure you're memory is right. The biggest concerns in the editorial from April 1999 (four months in) was that monetary policy was too much geared towards the high growth economies of the Eurozone (Spain and Ireland), and wasn't helping Germany get out of its slump! -SNIP-
Interesting perspective. I worked in Barcelona for a year helping with the retail side of Euro implementation, and the sense there was of a boom time, those with memories of Franco certainly welcomed the Euro with open arms as the next stage in their development. Friends in Ireland all anticipated the property boom caused by the interest rate cut from I think 6% to 2.5% overnight, most of them also did very well until the inevitable (but predictable) property crash there. The German economy was always going to recover once the one-off costs of unification had been paid, but you are right that these costs also included depressed wages which was a help to their industry. Rapid economic development in other regions definitely accounted for increased demand of German exports - lots of Mercedes and Porsches in Dubai and Doha right now, probably Beijing and Shanghai too!
It's worth remembering something else. Between 1999 and 2007, most Eurozone governments dramatically reduced their indebtedness. Italy, Ireland and Spain dropped 20%, and while I don't know the numbers for France and Germany off the top of my head, I'm sure they're similar. Greece, on the other hand, went from 70% of GDP to 100%. While everyone else used the Eurozone boom of the early 2000s to pay off debt, Greece layered it on.
I've just checked my numbers, Greece debt-to-GDP went from 93% to 110%.
Didn't Spain and Ireland rack up private debt, though? You can be as fiscally prudent as you want in government, but if all your companies and households are in over their heads, you're going to take a huge hit to government coffers when the recession hits.
It's worth remembering something else. Between 1999 and 2007, most Eurozone governments dramatically reduced their indebtedness. Italy, Ireland and Spain dropped 20%, and while I don't know the numbers for France and Germany off the top of my head, I'm sure they're similar. Greece, on the other hand, went from 70% of GDP to 100%. While everyone else used the Eurozone boom of the early 2000s to pay off debt, Greece layered it on.
I've just checked my numbers, Greece debt-to-GDP went from 93% to 110%.
Didn't Spain and Ireland rack up private debt, though? You can be as fiscally prudent as you want in government, but if all your companies and households are in over their heads, you're going to take a huge hit to government coffers when the recession hits.
George Osborne should take note.
Well: in which case we're stuffed :-)
(as are the Swedes and the Danes and the Australians and the Canadians and the Chinese...)
But yes, the Spanish and the Irish racked up private sector debt. But at least they were only running up private sector debt. What you really don't want is a situation where your government and private sector are both running big deficits, and using that money to pay for imports.
The most terrifying outcome for Europhiles is that Greece leaves the euro and 12 months later, things are actually not so bad. And there are quite good reasons for believing things could turn out like that.
The most terrifying outcome for Europhiles is that Greece leaves the euro and 12 months later, things are actually not so bad. And there are quite good reasons for believing things could turn out like that.
That'd be a splendid outcome for the Eurozone and Britain.
On the question of whether default automatically leads to Grexit, I wonder if perhaps what might happen in practice is a kind of messy half-exit from the Euro? The scenario I envisage is something like this:
1) Greece goes bust, the banking system collapses.
2) Instead of leaving the Euro and creating a new currency, instead the government prints vouchers which can be used as a sort of parallel pseudo-currency, as a 'temporary measure'. It uses these to pay salaries and pensions, and passes emergency legislation forcing shopkeepers to accept them (together with draconian capital controls, of course).
It would be a bit like the old communist countries before the fall of the iron curtain, or Zimbabwe before official dollarisation. The Euro would still be in circulation (and would in theory be the official currency), with a parallel pseudo-currency which everyone would be trying to unload at derisory exchange rates.
I believe there is a saying, "bad money drives out the good", which would mean that all the Euros would leave the economy anyway.
The most terrifying outcome for Europhiles is that Greece leaves the euro and 12 months later, things are actually not so bad. And there are quite good reasons for believing things could turn out like that.
Hmmm: if Greece leaves the Euro, that means the puchasing power of the Greeks is reduced by c. 40%. This is - to all intents and purposes - the same as paying off Greece's debts through a one-off 40% levy on the savings of all Greeks.
If Greece was run by economically rational people, I would agree with you. But Syriza is not economically rational.
Assume that the Drachma has halved in value. This means the price of energy has doubled and the price of food has leapt 50%.
For people on fixed incomes, this means that they are suddenly poorer. Will Syriza respond by raising pensions to solve the problem? I suspect they will.
Ultimately, Greece's problems are four-fold: they have one of the least flexible labour markets in the developed world, they collect too little tax, they think it is OK for civil servants to retire in their mid 50s, and corruption is rife. Leaving the Euro will not solve any of those issues.
The most terrifying outcome for Europhiles is that Greece leaves the euro and 12 months later, things are actually not so bad. And there are quite good reasons for believing things could turn out like that.
That'd be a splendid outcome for the Eurozone and Britain.
But it is not a likely one if Syriza is in charge in Greece.
The most terrifying outcome for Europhiles is that Greece leaves the euro and 12 months later, things are actually not so bad. And there are quite good reasons for believing things could turn out like that.
That'd be a splendid outcome for the Eurozone and Britain.
But it is not a likely one if Syriza is in charge in Greece.
"things are actually not so bad" I read that as "not actually so bad" for the Eurozone. Greece has made it's own bed, whether the Eurozone is going to make them lie in it is another matter.
It's almost inconceivable that we'll vote to leave the EU. Really. Grexit won't change that. "Renegotiation" is a red herring too. In the last parliament DC went to Brussels and came back with nothing. This is the overwhelmingly likely scenario in this parliament too. The EU is like one of those proverbial giant ships that takes for ever to change course. Almost nothing that DC wants (or claims to want) can be achieved in the few months available before the referendum. And there's no incentive for the EU to bother to go to all the trouble of "renegotiating" anyway. Without any "renegotiation" we will vote to stay in. So what's the point? Does the mythical "renegotiation" serve any purpose other than to sway Eurosceptic politicos who make up about 0.1% of voters? Virtually every normal person knows which way they're going to vote and this Tory politicking is eyewash.
I did always wonder how this happened - why on earth would middle ranking army officers seize power? And why would the upper echelons of the army accept this?
I heard once many coups (successful or otherwise) are led or largely comprised of Colonels and similarly ranked officers - not high enough to be in the inner circle en masse, clearly ambitious to have reached such a rank, and usually not so old as to have let go of their ambitions, so more willing to take a chance when the opportunity presents itself. No idea if that's true, but it makes some sense to me - if enough of the mid ranking officers, the ones in day to day command of regiments and battalions, ignore or overthrow their Generals, who could stop them?
And of course that famous colonel (or Gul) Dukat ended up seizing power in his regime, if I remember my Star Trek correctly (after a peoples' revolt first though).
It's almost inconceivable that we'll vote to leave the EU. Really. Grexit won't change that. "Renegotiation" is a red herring too. In the last parliament DC went to Brussels and came back with nothing. This is the overwhelmingly likely scenario in this parliament too. The EU is like one of those proverbial giant ships that takes for ever to change course. Almost nothing that DC wants (or claims to want) can be achieved in the few months available before the referendum. And there's no incentive for the EU to bother to go to all the trouble of "renegotiating" anyway. Without any "renegotiation" we will vote to stay in. So what's the point? Does the mythical "renegotiation" serve any purpose other than to sway Eurosceptic politicos who make up about 0.1% of voters? Virtually every normal person knows which way they're going to vote and this Tory politicking is eyewash.
Elections have consequences - and one of them is that we will get a "renegotiation" and a "referendum".
That's good; we wouldn't have had either under Labour.
May I ask what were the "one-off costs of unification" that still needed to be paid, in practical terms?
Mainly infrastructure, educational and social costs of bringing East Germany up to Western standards. East Germany had communist-era housing and industry, with dire productivity and many thousands working in polluting manual industries that 40 years of technological advance since WWII had passed by. Depending on whose figures you look at, this was said to be around $2Trn over 20 years from 1989 to 2009. http://www.wsj.com/articles/after-fall-of-berlin-wall-german-reunification-came-with-a-big-price-tag-1415362635
It's almost inconceivable that we'll vote to leave the EU. Really. Grexit won't change that. "Renegotiation" is a red herring too. In the last parliament DC went to Brussels and came back with nothing. This is the overwhelmingly likely scenario in this parliament too. The EU is like one of those proverbial giant ships that takes for ever to change course. Almost nothing that DC wants (or claims to want) can be achieved in the few months available before the referendum. And there's no incentive for the EU to bother to go to all the trouble of "renegotiating" anyway. Without any "renegotiation" we will vote to stay in. So what's the point? Does the mythical "renegotiation" serve any purpose other than to sway Eurosceptic politicos who make up about 0.1% of voters? Virtually every normal person knows which way they're going to vote and this Tory politicking is eyewash.
Elections have consequences - and one of them is that we will get a "renegotiation" and a "referendum".
That's good; we wouldn't have had either under Labour.
I agree with both of you. This election's consequence is that nothing much will change, we'll have a referendum and we'll vote to stay in. I disagree that it's good, it's a waste of time, money and opportunity and is just to pacify the Tory right wing.
Mr. kle4, but Gul Dukat was the head of the Obsidian Order, right?
Damn, you've called my bluff - it's been a long time since I watched it, so I cannot recall. Even so, I do recall him rather sheepishly having to explain how he switched sides when the police state was overthrown, so he must have been fairly mid level even if influential nonetheless.
It is almost 200 years since great bustards – the world’s heaviest flying bird – were hunted to extinction in the UK.
Now a programme to reintroduce them says the wild population will soon be large enough to sustain itself, with four nests spotted on Salisbury Plain in Wiltshire.
Birdworld in Farnham, Surrey, has incubated eggs from Madrid Zoo since 2013 before releasing the birds.
Great bustards, which resemble ostriches, were once common but became extinct in the UK nearly 200 years ago because of people hunting them for food. The last one was killed in 1832.
Mr. Eagles, you're confusing literature with history.
I know Tain was the head of the Order, but I thought he preceded Dukat. I did go to check Wikipedia, but there's no mention of the Obsidian Order on his page (a disgrace, I'm sure you'll agree).
Edited extra bit: Mr. kle4, seems I may've misremembered as well
Mr. Eagles, you're confusing literature with history.
I know Tain was the head of the Order, but I thought he preceded Dukat. I did go to check Wikipedia, but there's no mention of the Obsidian Order on his page (a disgrace, I'm sure you'll agree).
Edited extra bit: Mr. kle4, seems I may've misremembered as well
Nope, Dukat was a military man, whilst the Obsidian Order was not, more of a Spy/Internal Security agency.
Comments
But the issue is that, once Greece defaults on its debts, then the government bonds held by the Greek banks become ineligible to be used as collateral. Once that happens, other banks will refuse to deal with Greek banks, irrespective of what the ratings agencies say, and once you are cut out of the international banking system, there will be a rush for the exits.
So: how could Euro exit be avoided?
Well, the ECB could announce it will indefinitely support the Greek banking sector. But that would be difficult, as it would basically be printing money to fuel capital flight. And it would be against the terms of the ECB's constitution (assuming the ratings agencies called "default", that is). Capital controls could be implemented (as they were in Cyprus and Iceland), to stop deposit flight.
There are numerous ways and means. The problem is the Greek banks. Perhaps there could be a Hellenic Banking Resolution Corporation, owned by the EU, the ECB and the IMF, which could nationalise the Greek banking sector and recapitalise it. The Greek government could then be allowed to go quietly and genuinely bust. And discussions about loss sharing could then begin.
With that in mind:
- why the feeble, and frankly hilarious arguments about England using all of Scotland's money? Why bother?
- and why a desire to keep all of the hated British (English?) institutions? The pound, the Queen, the BBC?
Is it all to try and convince the poor folk who would be shafted by a flat tax, increases in the cost of living in an independent country, those who are relying on public sector pensions, gosh, those with any pension reliance at all denominated in GBP? Is it all an effort to get Turkeys to vote for Christmas?
And so to George Osborne, the Conservative chancellor of the exchequer, the first secretary of state and the mutant of Westminster. At 44, he is scarcely recognisable as the politician he was at, say, 40. The diet and haircut that now allow him to pass for an ascetic medieval friar are actually the least of it.
http://www.ft.com/cms/s/0/7d9274fc-1343-11e5-ad26-00144feabdc0.html#ixzz3dD7ZxdNU
Grece's hand may be crap but 2-7 beats AA if noone calls your bluff.
Not so much Mare Nostrum as Mare Vostrum when it's full of people wanting to come into the country.
Europe is fraying at the edges. And now we have IS handily ensconced on the Libyan coast a mere 400 miles from the Italian coast. If I were that Minister I'd be worrying less about migrants and more about getting a viable fighting army down there.
'Former EU economics chief Olli Rehn said it would "simply not be possible" to combine a policy of sterlingisation with EU membership.'
Yet another SNP lie exposed.
The idea was that Tsipiras would be forced to either: (a) get the package agreed via a referendum (to keep his Left wing in check), (b) get it approved via half the party doing a deal with ND, or (c) to cause a split in Syriza than would lead to new elections.
France has accused Italy of failing to respect EU asylum rules, but the Rome government has argued the migrants see Italy only as a transit country.
http://www.bbc.co.uk/news/world-europe-33144575
The EU meeting on immigration today seems likely not to reach agreement, with Italy threatening to disobey other EU rules if it does not get its way.
However, as long as naval ships keep rescuing immigrants and bringing them to EU, then it is highly likely that the immigration will continue or even increase. The one thing not on the agenda appears to be how to discourage this tide of immigration and how to deal with the people smugglers.
As some immigrants come from sub-Saharan West Africa, then they will be economic and not political immigrants.
Mr. Bond, the Pope's a damned fool. His response to the Hebdo murders was disgraceful.
Mr. Mortimer, Gaddafi was just a colonel.
Eventually, we're going to have to tear up the various Conventions, decide on how many people we want to let into Europe and where from and turn back everyone else.
Of course they're coming.
This is I suppose in someways similar to Scenario 1
(NB -- the story is about UK cuts but look at the graph.)
http://www.ft.com/cms/s/0/777f7a58-129c-11e5-bcc2-00144feabdc0.html
UK economy returns to positive inflation http://www.itv.com/news/update/2015-06-16/uk-economy-returns-to-positive-inflation/ …
I did read that the British Army has the equivalent of a battalion (1,000 men) of colonels. A colonel normally commands a battalion himself, so for each to have a job i.e. a battalion to command, we'd need a million-strong army. We have about 8% of that, so presumably, colonel is the rank where most career officers top out, and 92% then have both time on their hands and no prospect of advancement?
This article was quite interesting:
http://foreignpolicy.com/2010/02/22/why-are-coups-always-led-by-colonels/
Greece has the same size public sector as Germany (not as a percentage of population, as a number of people!) and they all retire at 50 or 55. Meanwhile the average doctor 'earns' 10k Euros per year yet somehow manages to live in a large villa with pool and drives a Porsche. The numbers just don't add up.
"Mr. Bond, the Pope's a damned fool. His response to the Hebdo murders was disgraceful."
I quite agree. He talked about reacting to someone insulting someone's mother, completely failing to understand that a religion is not like someone's mother. A stupid and dangerous thing for him to say. Still, no surprise that a religious leader would seek to protect religion from criticism even if he is too dim to understand that his own religion would be wiped out if the fanatics he sought to excuse ever got into power.
I put him more in the section of comic interlude.
His "UK is bust and its currency worthless" matched with iScot will go for sterlingisation is one of his better gags.
Why would you benchmark Weimar Reichsmarks ?
1) Greece goes bust, the banking system collapses.
2) Instead of leaving the Euro and creating a new currency, instead the government prints vouchers which can be used as a sort of parallel pseudo-currency, as a 'temporary measure'. It uses these to pay salaries and pensions, and passes emergency legislation forcing shopkeepers to accept them (together with draconian capital controls, of course).
It would be a bit like the old communist countries before the fall of the iron curtain, or Zimbabwe before official dollarisation. The Euro would still be in circulation (and would in theory be the official currency), with a parallel pseudo-currency which everyone would be trying to unload at derisory exchange rates.
IT'S OKAY DEAR, THERE'LL BE A CUP OF TEA AND A BISCUIT IN A WEE MINUTE.
The migrants know that if they put to sea they will be rescued and brought to Europe. Once they are in Europe, they know that they are extremely unlikely to be ever be sent home again. And, not only that, but you can be sure they'll all have heard about the EU plan to allocate however many arrive 'fairly' across all the EU countries and grant them asylum.
If you're from a poor 3rd world or war-ravished country, why on earth wouldn't you try it?
Oh...
Dare I say it but the ECJ decision this morning that leads to the possibility of printing Euros to get Greece out of its mess is now looking like the best option for everyone, yet again kicking the can another few feet metres down the road and postponing the necessary structural reforms.
I'll get my coat.
You may even end up with people forced to use food banks.
EU countries can then agree what number of asylum seekers they wish to take from that, and the level. I don't think it right that free movement should allow some to claim asylum in one country (the easiest) and then use that EU citizenship to move to where they really want to go, but that's the system we have if we stay.
Instead, by sticking to the post-Weimar era desire for a stable currency and balanced budget, the German public is doomed to force the German political establishment to fight (and lose) the current economic crisis with the lessons and measures that were necessary 100 years ago.
My theory on Grexit:
- Greece rightly refuse to pay their debts.
- EU fails to act in time, but does eventually act. Forcing Greece to exit the Euro, but keeping them in the EU.
- Contagion spreads to German banking sector and other debtor countries in Eurozone
- Worldwide govt debt goes bonkers (my prediction is still October, for this, with a small number of defaults causing Lehman/AIG style CDS domino effect across worldwide markets)
- About 2 years down the line, after much hardship, civil unrest and disorder across southern Europe, and eventually pressure in Northern Europe too, the ntroduction of southern/northern Euro to prevent the currency union dismantling entirely.
I dread to think of the capital controls, disruption to business and the population of Europe that this is going to cause. All to salvage a doomed European project that should have stopped going deeper in 1992....
http://bit.ly/1BjGtAd
Had a quick read of this via Google on coup d'etats and military ranks.
https://gwucpw.files.wordpress.com/2012/08/ohl-finkel-cpw.pdf
Seems to imply that involvement of Generals makes a coup more likely to succeed, less likely to be challenged, have authority, access to key command centres etc.
You plastic Jocks need to update your slang, zoomers is so last year.
Germany at the turn of the century was still paying the costs of re-unification from only a decade before and was always going to benefit from a comparative undervaluation at that particular point in time, when compared to a longer-term value of the old DM against other world currencies.
They've got into the position they're in now by being very disciplined about bearing down on costs internally. Ironically their main focus was on remaining competitive with China.
I think the SNP are well on their way to getting Full Fiscal Barnett. I note the SNP are persisting with socialist tax cutting incentives for business:
http://www.heraldscotland.com/politics/scottish-politics/snp-hope-to-coax-business-start-ups-with-radical-tax-incentive-scheme.1434443723
I think its time the SNP started listening to David Starkey and the MSM's political commentators and pursuing proper socialist policies !!
http://www.conservativehome.com/thetorydiary/2015/06/the-computers-that-crashed-and-the-campaign-that-didnt-the-story-of-the-tory-stealth-operation-that-outwitted-labour.html
It is, however, a must-read for anyone wanting to understand the Conservatives' ground game in 2015 and where it is likely to go in future.
Tell me, is it Labour policy to dismantle all food banks?
Or is it Labour policy to end the NEED for people to use them, because all current users will have enough money in their pockets to buy all the food they need? In which case, perhaps you'd like to share with the class what the policies are to bring that about? Because the last lot - based on milking the rich til the pips squeaked - just got thrown out in your most humiliating election defeat in thirty years.
I'd STFU about food banks if I were in your position.
My wife and I both said that cancelling the phone contracts would be our first move, but this seems to be unthinkable in parts of modern Britain.
In the last close to a decade now though everyone has known that Grexit was a possibility. The reality is that private capital fled Greece a long time ago and any eventual Grexit is not a shock that will cause contagion.
But like so many economic issues, it was naturally self righting. Germany's boom of the last decade was the consequence of its 1990s slump.
Firstly, when Germany reunified it put enormous downward pressure on wages and created a large number of unemployed which kept a lid on wages even when the economy started to perform in the early 2000s. This meant that Germany was not hitting capacity constraints at a time when other economies were, and meant its wages were structurally lower at the the time of the Eurozone and Global Financial crises. Secondly, Germany's great export industries are capital goods - led by companies like Siemens, Schnieder and the like. These are companies that benefit when other countries are in the midst of their own investment booms. So, when China industrialised it was by buying the machines that make things from Germany. (Germany is - or was - pretty much the only developed country that runs a trade surplus with China.) Thirdly, in the early 2000s, Germany implemented the Hartz reforms, which were a series of measures that dramatically liberalised the labour market.
But there again I grew up in a rented flat with no central heating, no washing machine and no TV but with a garden and the most delicious food imaginable every single day.
Clearly a lot of thought went into the targeting, and much was kept deliberately below the radar of the press and general public, although I do find it amusing that they were surprised to discover that offering food and beer to young volunteers might encourage turnout!!
I think I might dust off my CV and ask them if they need an IT consultant to help with the next election
1 phone amongst the whole family should suffice too if you're in that sort of financial situation too.
Obviously, the right thing for Greece to have done at the start of this year was to leave the Euro, and move to the New Drachma. They should have done this with the full support of the IMF, and then - following capital controls - come to a new arrangement with the Eurozone.
The were a number of reasons why they didn't do this:
1. IMF support would continue to require reforms to the labour market, and to pensions. There was no free lunch, and the Greek government would still need to do things it had promised were not necessary.
2. Support for remaining in the Euro is very high in Greece. (It was the implicit policy of successive governments to devalue people's savings through inflation. That is, of course, equivalent in effect to a tax on people's bank accounts.) Because many people lived through the destruction of their savings, support for the Euro is surprisingly high.
The issue Syriza has is that they promised the impossible: no more austerity and we can stay in the Euro... because...
The honest thing to have said was "The Euro isn't working for Greece. Our unemployment is astronomical, and it will be easier to adjust wages downward through a devaluation. We've also been far too generous with our pension promises, and we collect too little tax. Irrespective of our currency, that needs to change."
But Syriza wasn't elected on a back of honesty, but on a platform of "they're picking on us! they want to humiliate us! we'll stand up for the Greeks!"
It's worth remembering something else. Between 1999 and 2007, most Eurozone governments dramatically reduced their indebtedness. Italy, Ireland and Spain dropped 20%, and while I don't know the numbers for France and Germany off the top of my head, I'm sure they're similar. Greece, on the other hand, went from 70% of GDP to 100%. While everyone else used the Eurozone boom of the early 2000s to pay off debt, Greece layered it on.
Who can blame anybody for wanting to leave a third world cesspit? As you say, it makes no difference from an ethical point of view if someone is leaving due to religious persecution, the threat of rape by their uncle, or because the crops have failed. But, Europe cannot take everybody who wants to leave.
I worked in Barcelona for a year helping with the retail side of Euro implementation, and the sense there was of a boom time, those with memories of Franco certainly welcomed the Euro with open arms as the next stage in their development.
Friends in Ireland all anticipated the property boom caused by the interest rate cut from I think 6% to 2.5% overnight, most of them also did very well until the inevitable (but predictable) property crash there.
The German economy was always going to recover once the one-off costs of unification had been paid, but you are right that these costs also included depressed wages which was a help to their industry. Rapid economic development in other regions definitely accounted for increased demand of German exports - lots of Mercedes and Porsches in Dubai and Doha right now, probably Beijing and Shanghai too!
George Osborne should take note.
I believe most phone contracts lock you in for 24 months, so you don't have any ability to cancel them.
(as are the Swedes and the Danes and the Australians and the Canadians and the Chinese...)
But yes, the Spanish and the Irish racked up private sector debt. But at least they were only running up private sector debt. What you really don't want is a situation where your government and private sector are both running big deficits, and using that money to pay for imports.
May I ask what were the "one-off costs of unification" that still needed to be paid, in practical terms?
If Greece was run by economically rational people, I would agree with you. But Syriza is not economically rational.
Assume that the Drachma has halved in value. This means the price of energy has doubled and the price of food has leapt 50%.
For people on fixed incomes, this means that they are suddenly poorer. Will Syriza respond by raising pensions to solve the problem? I suspect they will.
Ultimately, Greece's problems are four-fold: they have one of the least flexible labour markets in the developed world, they collect too little tax, they think it is OK for civil servants to retire in their mid 50s, and corruption is rife. Leaving the Euro will not solve any of those issues.
And of course that famous colonel (or Gul) Dukat ended up seizing power in his regime, if I remember my Star Trek correctly (after a peoples' revolt first though).
Elections have consequences - and one of them is that we will get a "renegotiation" and a "referendum".
That's good; we wouldn't have had either under Labour.
Depending on whose figures you look at, this was said to be around $2Trn over 20 years from 1989 to 2009.
http://www.wsj.com/articles/after-fall-of-berlin-wall-german-reunification-came-with-a-big-price-tag-1415362635
PS - I hope you enjoyed today's classical history reference
I know Tain was the head of the Order, but I thought he preceded Dukat. I did go to check Wikipedia, but there's no mention of the Obsidian Order on his page (a disgrace, I'm sure you'll agree).
Edited extra bit: Mr. kle4, seems I may've misremembered as well