They would refuse to accept collateral from Italian banks. Which means that they would have no drawing rights in respect of Euros. Which means unless an alternative currency is up and running immediately the entire banking system collapses. Which means no pay, no pensions, no sales, nothing. Who the hell needs tanks? That is so 20th century.
Call 5 days of public holidays, renominate all bank accounts into Lira, all shop prices into Lira, capital controls and float the currency into a +/-10% band of the Euro.
That's the easy part tbh, the harder part will be getting the mattress money converted into Lira and stopping shops accepting payment in Euros. The only way to do that will be mandatory search, seizure and conversion of large cash amounts at the Italian border.
Once the banking system is converted to Lira, drawing rights for Euros become irrelevant.
The Italians have a deficit of 442bn. The Germans a surplus of 923bn. Spain has a deficit of 381bn. The Netherlands a surplus of 112bn. These kinds of balances have really only developed since 2008. Before that the balances at the ECB for everyone were very small. This is how the ECB has kept the yields of Euro denominated debt low, even of countries with excess debt like Italy. It has kept the show on the road but is it really sustainable? That is the key to what happens next.
What you are saying is that there needs to be a debt write off (effectively fiscal transfers) for an OCA to work.
You are right.
But there is no public support in Germany for it. (Which is why it didn’t happen in Greece).
Essentially the German voters quite like having their cake and eating it. As well as everyone else’s cake.
Unless those countries wth large surpluses are prepared to countenance serious fiscal transfers, then the Euro is going to be in serious trouble. The German surplus of close to €1trn is distorting the whole European economy.
Come on, this is the EU we are talking about here. The Germans are not told that E1trn of their taxes are at risk, the Italians and the Spanish are not made aware of the huge new liabilities that they are incurring and everything is just rolled over in the vague hope it will go away. So we still have Greece with debts of 179% of its GDP and everyone extends and pretends that one day some of that will get paid back.
This only becomes a crisis when the debtors indicate that they might stop pretending as Greece did when trying to force through a default and as Italy are threatening to do now. It will be made clear to them that the consequences of doing so and stopping the pretense are severe. And don't think the views of the Italian populace matter a damn either. We've been down that road already and it did not end well.
As I said the solution for Italy is to leave the EMU, renominate all of its domestic debt into Lira and then inflate it away. If the ECB doesn't like being paid in Lira then it really is their problem, not Italy's. What are they going to do, roll in a panzer division and demand the money back?
How much of Italy's domestic debt is owed to other Italians?
The only solution of course is a single European budget, government and central bank.
I doubt you'll get any arguments against from @williamglenn lol
The Italians have a deficit of 442bn. The Germans a surplus of 923bn. Spain has a deficit of 381bn. The Netherlands a surplus of 112bn. These kinds of balances have really only developed since 2008. Before that the balances at the ECB for everyone were very small. This is how the ECB has kept the yields of Euro denominated debt low, even of countries with excess debt like Italy. It has kept the show on the road but is it really sustainable? That is the key to what happens next.
What you are saying is that there needs to be a debt write off (effectively fiscal transfers) for an OCA to work.
You are right.
But there is no public support in Germany for it. (Which is why it didn’t happen in Greece).
Essentially the German voters quite like having their cake and eating it. As well as everyone else’s cake.
Unless those countries wth large surpluses are prepared to countenance serious fiscal transfers, then the Euro is going to be in serious trouble. The German surplus of close to €1trn is distorting the whole European economy.
Come on, this is the EU we are talkingend well.
As I said the solution for Italy is to leave the EMU, renominate all of its domestic debt into Lira and then inflate it away. If the ECB doesn't like being paid in Lira then it really is their problem, not Italy's. What are they going to do, roll in a panzer division and demand the money back?
Tough one
what do you reckon would happen when the dust settles ?
Euro rises as its weaker members peel off - big hit to German industry Euro falls due to uncertainty - Germans get a bigger surplus
If the Euro survives it would be the former. However, if Italy leaves the EMU then I think the whole thing falls apart. There's no way France and Spain would be able to live with a competitive devaluation in Italy. Much like Brexit, though, the EU will want to prove to the rest of the members that there is no life outside of the EU (or in Italy's case EMU) so I expect trade embargoes etc... to be threatened. The most dangerous thing for the EU is someone leaving and being successful on the outside. That's true for the UK as much as it is true for Italy.
The UK, Italy, Poland. This is an existential crisis for the EU. I see three outcomes:
a) A smaller EU focussed on countries that want to be in the Euro and with a central federal government.
b) The EU kicking the can a bit further down the road somehow, but storing up worse problems.
They would refuse to accept collateral from Italian banks. Which means that they would have no drawing rights in respect of Euros. Which means unless an alternative currency is up and running immediately the entire banking system collapses. Which means no pay, no pensions, no sales, nothing. Who the hell needs tanks? That is so 20th century.
Call 5 days of public holidays, renominate all bank accounts into Lira, all shop prices into Lira, capital controls and float the currency into a +/-10% band of the Euro.
That's the easy part tbh, the harder part will be getting the mattress money converted into Lira and stopping shops accepting payment in Euros. The only way to do that will be mandatory search, seizure and conversion of large cash amounts at the Italian border.
Once the banking system is converted to Lira, drawing rights for Euros become irrelevant.
there's also the small issue of Italian issued Euros, cue Germans refusing o take them
What you are saying is that there needs to be a debt write off (effectively fiscal transfers) for an OCA to work.
You are right.
But there is no public support in Germany for it. (Which is why it didn’t happen in Greece).
Essentially the German voters quite like having their cake and eating it. As well as everyone else’s cake.
Unless those countries wth large surpluses are prepared to countenance serious fiscal transfers, then the Euro is going to be in serious trouble. The German surplus of close to €1trn is distorting the whole European economy.
Come on, this is the EU we are talking about here. The Germans are not told that E1trn of their taxes are at risk, the Italians and the Spanish are not made aware of the huge new liabilities that they are incurring and everything is just rolled over in the vague hope it will go away. So we still have Greece with debts of 179% of its GDP and everyone extends and pretends that one day some of that will get paid back.
This only becomes a crisis when the debtors indicate that they might stop pretending as Greece did when trying to force through a default and as Italy are threatening to do now. It will be made clear to them that the consequences of doing so and stopping the pretense are severe. And don't think the views of the Italian populace matter a damn either. We've been down that road already and it did not end well.
As I said the solution for Italy is to leave the EMU, renominate all of its domestic debt into Lira and then inflate it away. If the ECB doesn't like being paid in Lira then it really is their problem, not Italy's. What are they going to do, roll in a panzer division and demand the money back?
How much of Italy's domestic debt is owed to other Italians?
Until very recently almost all of it. The country runs a trade surplus (unlike us) and has a good savings ratio. It's deficit last year was about 2.3% which was sustainable. Their problem is accumulated debt and the almost total absence of growth (the 2 being closely connected).
The new factor is the Target2 mechanism which is why I keep going on about it. The SM has encouraged Italians to diversify their savings beyond Italy in a large way. The banks have met the solvency shortfall by providing collateral to the ECB to allow them to draw Euros to distribute. The ECB has become by far the largest holder of Italian bonds and its investors will suffer if there is a default.
The Italians have a deficit of 442bnally sustainable? That is the key to what happens next.
What you are saying is that there needs to be a debt write off (effectively fiscal transfers) for an OCA to work.
You are right.
But there is no public support in Germany for it. (Which is why it didn’t happen in Greece).
Essentially the German voters quite like having their cake and eating it. As well as everyone else’s cake.
Unless those countries wth large surpluses are prepared to countenance serious fiscal transfers, then the Euro is going to be in serious trouble. The German surplus of close to €1trn is distorting the whole European economy.
Come on, this is the EU we are talkingend well.
As I said the solution for Italy is to leave the EMU, renominate all of its domestic debt into Lira and then inflate it away. If the ECB doesn't like being paid in Lira then it really is their problem, not Italy's. What are they going to do, roll in a panzer division and demand the money back?
Tough one
what do you reckon would happen when the dust settles ?
Euro rises as its weaker members peel off - big hit to German industry Euro falls due to uncertainty - Germans get a bigger surplus
If the Euro outside of the EU (or in Italy's case EMU) so I expect trade embargoes etc... to be threatened. The most dangerous thing for the EU is someone leaving and being successful on the outside. That's true for the UK as much as it is true for Italy.
The UK, Italy, Poland. This is an existential crisis for the EU. I see three outcomes:
a) A smaller EU focussed on countries that want to be in the Euro and with a central federal government.
b) The EU kicking the can a bit further down the road somehow, but storing up worse problems.
c) War or significant civil-strife.
I just don't get why the Belgians and luxemburgers don't just dissolve their countries and become part of Germany or France
I doubt you'll get any arguments against from @williamglenn lol
It is the only solution for any EU member. If you support Remain and are against full Euro membership and a single budget you are angling for a Italy/Greece scenario in the Uk.
I doubt you'll get any arguments against from @williamglenn lol
It is the only solution for any EU member. If you support Remain and are against full Euro membership and a single budget you are angling for a Italy/Greece scenario in the Uk.
Why 'single' budget? US states have their own budgets, taxes, legislatures, etc. Do you think the US model is going to implode at any moment?
For hat it's worth, I think even if Italy left (I don't think it will) the eurozone and EU will continue on for a while. But I have long said I think the EU will not outlive me (assuming I have normal life expectancy).
I doubt you'll get any arguments against from @williamglenn lol
It is the only solution for any EU member. If you support Remain and are against full Euro membership and a single budget you are angling for a Italy/Greece scenario in the Uk.
Why 'single' budget? US states have their own budgets, taxes, legislatures, etc. Do you think the US model is going to implode at any moment?
US states, counties , cities can go bankrupt. An option not available to Euro countries.
They would refuse to accept collateral from Italian banks. Which means that they would have no drawing rights in respect of Euros. Which means unless an alternative currency is up and running immediately the entire banking system collapses. Which means no pay, no pensions, no sales, nothing. Who the hell needs tanks? That is so 20th century.
Call 5 days of public holidays, renominate all bank accounts into Lira, all shop prices into Lira, capital controls and float the currency into a +/-10% band of the Euro.
That's the easy part tbh, the harder part will be getting the mattress money converted into Lira and stopping shops accepting payment in Euros. The only way to do that will be mandatory search, seizure and conversion of large cash amounts at the Italian border.
Once the banking system is converted to Lira, drawing rights for Euros become irrelevant.
And in the second minute, when that +/- band of 10% is challenged what do they do then? How do they protect the Lira from rapid depreciation? Italy, like all Euro countries, does not even have a fully operative central bank. The most important Treasury functions are performed by the ECB. In the modern world how do they stop currency flight? It would happen electronically.
I doubt you'll get any arguments against from @williamglenn lol
It is the only solution for any EU member. If you support Remain and are against full Euro membership and a single budget you are angling for a Italy/Greece scenario in the Uk.
Why 'single' budget? US states have their own budgets, taxes, legislatures, etc. Do you think the US model is going to implode at any moment?
The US federal budget is absolutely massive compared to what the EU spends. 21% in the US vs about 1%in the EU.
They would refuse to accept collateral from Italian banks. Which means that they would have no drawing rights in respect of Euros. Which means unless an alternative currency is up and running immediately the entire banking system collapses. Which means no pay, no pensions, no sales, nothing. Who the hell needs tanks? That is so 20th century.
Call 5 days of public holidays, renominate all bank accounts into Lira, all shop prices into Lira, capital controls and float the currency into a +/-10% band of the Euro.
That's the easy part tbh, the harder part will be getting the mattress money converted into Lira and stopping shops accepting payment in Euros. The only way to do that will be mandatory search, seizure and conversion of large cash amounts at the Italian border.
Once the banking system is converted to Lira, drawing rights for Euros become irrelevant.
And in the second minute, when that +/- band of 10% is challenged what do they do then? How do they protect the Lira from rapid depreciation? Italy, like all Euro countries, does not even have a fully operative central bank. The most important Treasury functions are performed by the ECB. In the modern world how do they stop currency flight? It would happen electronically.
They would refuse to accept collateral from Italian banks. Which means that they would have no drawing rights in respect of Euros. Which means unless an alternative currency is up and running immediately the entire banking system collapses. Which means no pay, no pensions, no sales, nothing. Who the hell needs tanks? That is so 20th century.
Call 5 days of public holidays, renominate all bank accounts into Lira, all shop prices into Lira, capital controls and float the currency into a +/-10% band of the Euro.
That's the easy part tbh, the harder part will be getting the mattress money converted into Lira and stopping shops accepting payment in Euros. The only way to do that will be mandatory search, seizure and conversion of large cash amounts at the Italian border.
Once the banking system is converted to Lira, drawing rights for Euros become irrelevant.
And in the second minute, when that +/- band of 10% is challenged what do they do then? How do they protect the Lira from rapid depreciation? Italy, like all Euro countries, does not even have a fully operative central bank. The most important Treasury functions are performed by the ECB. In the modern world how do they stop currency flight? It would happen electronically.
It is fantastically difficult.
they could entrust all the IT to BT Openreach
they'll bloody lucky to get a pixel let alone move money
They would refuse to accept collateral from Italian banks. Which means that they would have no drawing rights in respect of Euros. Which means unless an alternative currency is up and running immediately the entire banking system collapses. Which means no pay, no pensions, no sales, nothing. Who the hell needs tanks? That is so 20th century.
Call 5 days of public holidays, renominate all bank accounts into Lira, all shop prices into Lira, capital controls and float the currency into a +/-10% band of the Euro.
That's the easy part tbh, the harder part will be getting the mattress money converted into Lira and stopping shops accepting payment in Euros. The only way to do that will be mandatory search, seizure and conversion of large cash amounts at the Italian border.
Once the banking system is converted to Lira, drawing rights for Euros become irrelevant.
And in the second minute, when that +/- band of 10% is challenged what do they do then? How do they protect the Lira from rapid depreciation? Italy, like all Euro countries, does not even have a fully operative central bank. The most important Treasury functions are performed by the ECB. In the modern world how do they stop currency flight? It would happen electronically.
It is fantastically difficult.
they could entrust all the IT to BT Openreach
they'll bloody lucky to get a pixel let alone move money
They would refuse to accept collateral from Italian banks. Which means that they would have no drawing rights in respect of Euros. Which means unless an alternative currency is up and running immediately the entire banking system collapses. Which means no pay, no pensions, no sales, nothing. Who the hell needs tanks? That is so 20th century.
Call 5 days of public holidays, renominate all bank accounts into Lira, all shop prices into Lira, capital controls and float the currency into a +/-10% band of the Euro.
That's the easy part tbh, the harder part will be getting the mattress money converted into Lira and stopping shops accepting payment in Euros. The only way to do that will be mandatory search, seizure and conversion of large cash amounts at the Italian border.
Once the banking system is converted to Lira, drawing rights for Euros become irrelevant.
And in the second minute, when that +/- band of 10% is challenged what do they do then? How do they protect the Lira from rapid depreciation? Italy, like all Euro countries, does not even have a fully operative central bank. The most important Treasury functions are performed by the ECB. In the modern world how do they stop currency flight? It would happen electronically.
It is fantastically difficult.
That's why the capital controls would be implemented. Italy has a huge amount of gold, they would easily be able to defend a new Lira from a rapid devaluation. Also, in order to get the first few Lira auctions off the ground they could sell gold-bonds to start raising money.
There are solutions to leaving the EMU.
I suspect par value for the Lira would be something like €0.77-0.80, and it would take about a year for it to settle at that level. Just as it has taken about a year for Sterling to settle at about it's par value of $1.30-1.40.
They would refuse to accept collateral from Italian banks. Which means that they would have no drawing rights in respect of Euros. Which means unless an alternative currency is up and running immediately the entire banking system collapses. Which means no pay, no pensions, no sales, nothing. Who the hell needs tanks? That is so 20th century.
Call 5 days of public holidays, renominate all bank accounts into Lira, all shop prices into Lira, capital controls and float the currency into a +/-10% band of the Euro.
That's the easy part tbh, the harder part will be getting the mattress money converted into Lira and stopping shops accepting payment in Euros. The only way to do that will be mandatory search, seizure and conversion of large cash amounts at the Italian border.
Once the banking system is converted to Lira, drawing rights for Euros become irrelevant.
And in the second minute, when that +/- band of 10% is challenged what do they do then? How do they protect the Lira from rapid depreciation? Italy, like all Euro countries, does not even have a fully operative central bank. The most important Treasury functions are performed by the ECB. In the modern world how do they stop currency flight? It would happen electronically.
It is fantastically difficult.
I'm sure London could offer some services...
If you believe Varoufakis (and some don't) he and Osborne really struggled to find anything to disagree about in terms of what Greece needed and what should be done. But when it came to Finance Minister Meetings Osborne sat silent and did not support him. Bluntly, it wasn't our problem and Osborne's priority was to avoid UK involvement in any bailout. You don't do that by getting involved.
Why would London want to fall out catastrophically with the ECB when we are still discussing our access to the EZ post Brexit?
Big test of UK broadcast media now. German EU Commissioner caught saying the financial markets will make Italians change their votes. Tweet then disappears but has been caught by screen shot. Massive story about EU being anti-democratic. Will UK TV news give it due prominence?
They would refuse to accept collateral from Italian banks. Which means that they would have no drawing rights in respect of Euros. Which means unless an alternative currency is up and running immediately the entire banking system collapses. Which means no pay, no pensions, no sales, nothing. Who the hell needs tanks? That is so 20th century.
Call 5 days of public holidays, renominate all bank accounts into Lira, all shop prices into Lira, capital controls and float the currency into a +/-10% band of the Euro.
That's the easy part tbh, the harder part will be getting the mattress money converted into Lira and stopping shops accepting payment in Euros. The only way to do that will be mandatory search, seizure and conversion of large cash amounts at the Italian border.
Once the banking system is converted to Lira, drawing rights for Euros become irrelevant.
And in the second minute, when that +/- band of 10% is challenged what do they do then? How do they protect the Lira from rapid depreciation? Italy, like all Euro countries, does not even have a fully operative central bank. The most important Treasury functions are performed by the ECB. In the modern world how do they stop currency flight? It would happen electronically.
It is fantastically difficult.
I'm sure London could offer some services...
If you believe Varoufakis (and some don't) he and Osborne really struggled to find anything to disagree about in terms of what Greece needed and what should be done. But when it came to Finance Minister Meetings Osborne sat silent and did not support him. Bluntly, it wasn't our problem and Osborne's priority was to avoid UK involvement in any bailout. You don't do that by getting involved.
Why would London want to fall out catastrophically with the ECB when we are still discussing our access to the EZ post Brexit?
Because the ECB may not survive for very long if Italy make a success of leaving. Longer term it is in our interests for the EU to disintegrate, at least now that we're leaving.
Mr. Saddo/Mr. Max, I agree, though I'd be surprised if the law changes in the short term.
There has to a line. That for me is the point the doctors say there's nothing we can do to stop the cancer, but we can offer pain relief. At that point, the poor person concerned deserves a choice of ending things or carrying on.
I think dementia and Alzheimer's should be treated similarly. It's no life at all. The person is a shell of their former selves and they and the family and other loved ones are stuck in perpetual state of purgatory waiting (and sadly sometimes looking forward) for death.
I agree. My mother was a very intelligent witty dignified lady who sadly got dementia. She knew what was happening and just wanted to die. It took her four years to die during which time she lost all her dignity and was very unhappy. Unfortunately my memory of her is totally clouded by her last years.
We look back at the times when homosexuality was a criminal offence in the UK and caused great unhappiness and in some cases suicide, and think - how could people be so uncaring and mistaken? I think in 20 years time we will be looking back at today's laws on assisted dying and saying the same thing.
Yes, having seen my own grandfather deteriorate over the last year I find myself in complete agreement. As a country we should have a debate about old age, care, dementia, assisted dying and our current policy of unlimited prolongation of life.
For terminal illness then Dignitas would certainly be my death of choice. The real worry is that Alzheimers and Dementia take away the mental capacity to do anything about your situation and take away the Dignitas option so you are consigned to years of misery for yourself and those around you, zero quality of life, simply being physically kept alive and for the sake of it.
Hopefully there will soon become a time when you can give advanced directives of what you want to happen should you be diagnosed with Alzheimer's or Dementia. Sadly it will take take time to overcome the religious lobby who can't seem to stop themselves imposing their beliefs on those that don't even share them.
They would refuse to accept collateral from Italian banks. Which means that they would have no drawing rights in respect of Euros. Which means unless an alternative currency is up and running immediately the entire banking system collapses. Which means no pay, no pensions, no sales, nothing. Who the hell needs tanks? That is so 20th century.
Call 5 days of public holidays, renominate all bank accounts into Lira, all shop prices into Lira, capital controls and float the currency into a +/-10% band of the Euro.
That's the easy part tbh, the harder part will be getting the mattress money converted into Lira and stopping shops accepting payment in Euros. The only way to do that will be mandatory search, seizure and conversion of large cash amounts at the Italian border.
Once the banking system is converted to Lira, drawing rights for Euros become irrelevant.
And in the second minute, when that +/- band of 10% is challenged what do they do then? How do they protect the Lira from rapid depreciation? Italy, like all Euro countries, does not even have a fully operative central bank. The most important Treasury functions are performed by the ECB. In the modern world how do they stop currency flight? It would happen electronically.
It is fantastically difficult.
That's why the capital controls would be implemented. Italy has a huge amount of gold, they would easily be able to defend a new Lira from a rapid devaluation. Also, in order to get the first few Lira auctions off the ground they could sell gold-bonds to start raising money.
There are solutions to leaving the EMU.
I suspect par value for the Lira would be something like €0.77-0.80, and it would take about a year for it to settle at that level. Just as it has taken about a year for Sterling to settle at about it's par value of $1.30-1.40.
The whole point of this would be to return to the happier days of a gently declining currency, higher inflation and a reduction in the overwhelming backlog of debt. That essentially rules out a par value over any extended period of time. It would not be impossible but the economic consequences would be extremely negative in the short term, almost certainly bringing down any government that went for it.
Would it be tactless at this point for our negotiators to point out to the EU the advantages of having access to Europe's premier financial centre and that placing obstacles in the way of such access might not be in anyone's interests?
Big test of UK broadcast media now. German EU Commissioner caught saying the financial markets will make Italians change their votes. Tweet then disappears but has been caught by screen shot. Massive story about EU being anti-democratic. Will UK TV news give it due prominence?
Wow....
flicking through the german media its clear the germans are worried and reaching for their cattle prods
The Italians have a deficit of 442bn. The Germans a surplus of 923bn. Spain has a deficit of 381bn. The Netherlands a surplus of 112bn. These kinds of balances have really only developed since 2008. Before that the balances at the ECB for everyone were very small. This is how the ECB has kept the yields of Euro denominated debt low, even of countries with excess debt like Italy. It has kept the show on the road but is it really sustainable? That is the key to what happens next.
What you are saying is that there needs to be a debt write off (effectively fiscal transfers) for an OCA to work.
You are right.
But there is no public support in Germany for it. (Which is why it didn’t happen in Greece).
Essentially the German voters quite like having their cake and eating it. As well as everyone else’s cake.
Unless those countries wth large surpluses are prepared to countenance serious fiscal transfers, then the Euro is going to be in serious trouble. The German surplus of close to €1trn is distorting the whole European economy.
Come on, this is the EU we are talkingend well.
As I said the solution for Italy is to leave the EMU, renominate all of its domestic debt into Lira and then inflate it away. If the ECB doesn't like being paid in Lira then it really is their problem, not Italy's. What are they going to do, roll in a panzer division and demand the money back?
Tough one
what do you reckon would happen when the dust settles ?
Euro rises as its weaker members peel off - big hit to German industry Euro falls due to uncertainty - Germans get a bigger surplus
If the Euro survives it would be the former. However, if Italy leaves the EMU then I think the whole thing falls apart. There's no way France and Spain would be able to live with a competitive devaluation in Italy. Much like Brexit, though, the EU will want to prove to the rest of the members that there is no life outside of the EU (or in Italy's case EMU) so I expect trade embargoes etc... to be threatened. The most dangerous thing for the EU is someone leaving and being successful on the outside. That's true for the UK as much as it is true for Italy.
Indeed, which is why the UK needs to make a clean break. Tying us in to the EU systems and institutions after we leave is designed to prevent the UK from making a success of it.
Big test of UK broadcast media now. German EU Commissioner caught saying the financial markets will make Italians change their votes. Tweet then disappears but has been caught by screen shot. Massive story about EU being anti-democratic. Will UK TV news give it due prominence?
Wow....
Its quite depressing that that is thought to be news. I mean, after Greece? This is what remainers want us to keep signed up for.
Big test of UK broadcast media now. German EU Commissioner caught saying the financial markets will make Italians change their votes. Tweet then disappears but has been caught by screen shot. Massive story about EU being anti-democratic. Will UK TV news give it due prominence?
Wow....
Its quite depressing that that is thought to be news. I mean, after Greece? This is what remainers want us to keep signed up for.
We are stuck with the financial markets, in or out. As Corbyn might one day discover.
Would it be tactless at this point for our negotiators to point out to the EU the advantages of having access to Europe's premier financial centre and that placing obstacles in the way of such access might not be in anyone's interests?
Nope. More Euros are traded every day in London than in the whole of the EZ put together. If there is to be a storm that is where it will break.
The whole point of this would be to return to the happier days of a gently declining currency, higher inflation and a reduction in the overwhelming backlog of debt.
Would it be tactless at this point for our negotiators to point out to the EU the advantages of having access to Europe's premier financial centre and that placing obstacles in the way of such access might not be in anyone's interests?
Nope. More Euros are traded every day in London than in the whole of the EZ put together. If there is to be a storm that is where it will break.
I expect London to double deal in the event of Italy leaving the EMU. Not only will we continue to be the world's largest Euro trading centre, we will also help the Italians get back on their feet.
The whole point of this would be to return to the happier days of a gently declining currency, higher inflation and a reduction in the overwhelming backlog of debt.
Would it be tactless at this point for our negotiators to point out to the EU the advantages of having access to Europe's premier financial centre and that placing obstacles in the way of such access might not be in anyone's interests?
It’s what we should have said to them a year ago. We should have started the negotiations from the perspective of adding to WTO terms, rather than subtracting from the status quo.
Would it be tactless at this point for our negotiators to point out to the EU the advantages of having access to Europe's premier financial centre and that placing obstacles in the way of such access might not be in anyone's interests?
It’s what we should have said to them a year ago. We should have started the negotiations from the perspective of adding to WTO terms, rather than subtracting from the status quo.
The Italians have a deficit of 442bn. The Germans a surplus of 923bn. Spain has a deficit of 381bn. The Netherlands a surplus of 112bn. These kinds of balances have really only developed since 2008. Before that the balances at the ECB for everyone were very small. This is how the ECB has kept the yields of Euro denominated debt low, even of countries with excess debt like Italy. It has kept the show on the road but is it really sustainable? That is the key to what happens next.
What you are saying is that there needs to be a debt write off (effectively fiscal transfers) for an OCA to work.
You are right.
But there is no public support in Germany for it. (Which is why it didn’t happen in Greece).
Essentially the German voters quite like having their cake and eating it. As well as everyone else’s cake.
Unless those countries wth large surpluses are prepared to countenance serious fiscal transfers, then the Euro is going to be in serious trouble. The German surplus of close to €1trn is distorting the whole European economy.
Come on, this is the EU we are talking about here. The Germans are not told that E1trn of their taxes are at risk, the Italians and the Spanish are not made aware of the huge new liabilities that they are incurring and everything is just rolled over in the vague hope it will go away. So we still have Greece with debts of 179% of its GDP and everyone extends and pretends that one day some of that will get paid back.
This only becomes a crisis when the debtors indicate that they might stop pretending as Greece did when trying to force through a default and as Italy are threatening to do now. It will be made clear to them that the consequences of doing so and stopping the pretense are severe. And don't think the views of the Italian populace matter a damn either. We've been down that road already and it did not end well.
Its worse than that. If Italy defaults on its Target2 debt, Germany will be the one with the problem. The Target2 debt is not simply an amount owed to the German taxpayer that they can write off - the Germans simultaneously have the same liability to their banking system - so Germany will suddenly have to find this money from somewhere.
The whole point of this would be to return to the happier days of a gently declining currency, higher inflation and a reduction in the overwhelming backlog of debt.
Yes. When I went to Germany with my father in the early 70s the official exchange rate was 7.40DM to the £. I remember the desperate battle to hold onto 3DM during the run up to black Wednesday. That would be the equivalent of 1.53 Euros now so we are well down on that. At best we can say the rate of decline has slowed as our inflation rate came more into line.
A mistake to assume that it is only the religious lobby which is against this.
There is nothing stopping anyone taking their own life. What is at issue is when a person is unable to do so and needs someone else to put an end to their life.
In those circumstances it is not just about the rights of the person suffering but about the obligations that a society would be placing on others to, let's be blunt, kill someone. Now people, including doctors, have been "mercy" killing for years and a very few people have ever been charged let alone convicted. Given the recent CPS guidelines I would be surprised if this were to change.
But once you create a right to be killed by others, you create an obligation on a third party, you have to define the circumstances in which that obligation can be carried out & when it can't, you have to deal with actual & potential conflicts of interest - should someone who benefits financially from the death of the person concerned ever be involved in the decision, for instance?, you have to deal with those who make money out of such a business & you have to deal with subtle & not so subtle pressure on those who are suffering to take the easy way out / save others' money. These are not easy questions & there are good reasons why all civilised societies have had a taboo about the deliberate taking of a life, particularly of the most vulnerable.
So it trivialises the issue to turn it into some priest stopping someone ending their own life & that's all there is to it.
I don't know what the answer is. I have had people in my own family suffer in such a way. If I were to end up in such a position I would refuse to have pointless medical interventions & simply seek palliative care & if that meant that strong drugs hastened my end so much the better. Living wills may be one answer.
This is a difficult & delicate topic. Those who for all sorts of compassionate reasons think that assisted dying should be made legal need to accept that it crosses a boundary which can lead to all sorts of unforeseen consequences, some of which will not be desirable & which may make matters worse for some. A compassionate society is one which looks properly after the weakest & most vulnerable, not one which places cost above other factors and sees only the strong and sentient as worthy. We do not need to look far into our own history to know what happens when such views take hold.
I am a great supporter of the hospice movement & have raised money for it. It is one charitable endeavour which needs far more support than it gets.
The whole point of this would be to return to the happier days of a gently declining currency, higher inflation and a reduction in the overwhelming backlog of debt. That essentially rules out a par value over any extended period of time. It would not be impossible but the economic consequences would be extremely negative in the short term, almost certainly bringing down any government that went for it.
If governments have difficulty collecting tax, to put it slightly euphemistically, then inflation can work pretty well as a substitute via seigniorage. It's not ideal, but it works to a point.
Of course, one of the reasons the Italians wanted to join the Euro was that they were fed up with that inflation
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That's the easy part tbh, the harder part will be getting the mattress money converted into Lira and stopping shops accepting payment in Euros. The only way to do that will be mandatory search, seizure and conversion of large cash amounts at the Italian border.
Once the banking system is converted to Lira, drawing rights for Euros become irrelevant.
The UK, Italy, Poland. This is an existential crisis for the EU. I see three outcomes:
a) A smaller EU focussed on countries that want to be in the Euro and with a central federal government.
b) The EU kicking the can a bit further down the road somehow, but storing up worse problems.
c) War or significant civil-strife.
The new factor is the Target2 mechanism which is why I keep going on about it. The SM has encouraged Italians to diversify their savings beyond Italy in a large way. The banks have met the solvency shortfall by providing collateral to the ECB to allow them to draw Euros to distribute. The ECB has become by far the largest holder of Italian bonds and its investors will suffer if there is a default.
It is fantastically difficult.
I'm sure London could offer some services...
they'll bloody lucky to get a pixel let alone move money
There are solutions to leaving the EMU.
I suspect par value for the Lira would be something like €0.77-0.80, and it would take about a year for it to settle at that level. Just as it has taken about a year for Sterling to settle at about it's par value of $1.30-1.40.
Why would London want to fall out catastrophically with the ECB when we are still discussing our access to the EZ post Brexit?
@oflynnmep
Big test of UK broadcast media now. German EU Commissioner caught saying the financial markets will make Italians change their votes. Tweet then disappears but has been caught by screen shot. Massive story about EU being anti-democratic. Will UK TV news give it due prominence?
Wow....
Hopefully there will soon become a time when you can give advanced directives of what you want to happen should you be diagnosed with Alzheimer's or Dementia. Sadly it will take take time to overcome the religious lobby who can't seem to stop themselves imposing their beliefs on those that don't even share them.
Long run GBP vs Euro/Mark https://tinyurl.com/ya6r8xvh
Long run GBP vs US Dollar https://tinyurl.com/yd9rpued
People who want to understand the true depravity of the Target2 system should read this: http://openaccess.city.ac.uk/19674/
There is nothing stopping anyone taking their own life. What is at issue is when a person is unable to do so and needs someone else to put an end to their life.
In those circumstances it is not just about the rights of the person suffering but about the obligations that a society would be placing on others to, let's be blunt, kill someone. Now people, including doctors, have been "mercy" killing for years and a very few people have ever been charged let alone convicted. Given the recent CPS guidelines I would be surprised if this were to change.
But once you create a right to be killed by others, you create an obligation on a third party, you have to define the circumstances in which that obligation can be carried out & when it can't, you have to deal with actual & potential conflicts of interest - should someone who benefits financially from the death of the person concerned ever be involved in the decision, for instance?, you have to deal with those who make money out of such a business & you have to deal with subtle & not so subtle pressure on those who are suffering to take the easy way out / save others' money. These are not easy questions & there are good reasons why all civilised societies have had a taboo about the deliberate taking of a life, particularly of the most vulnerable.
So it trivialises the issue to turn it into some priest stopping someone ending their own life & that's all there is to it.
I don't know what the answer is. I have had people in my own family suffer in such a way. If I were to end up in such a position I would refuse to have pointless medical interventions & simply seek palliative care & if that meant that strong drugs hastened my end so much the better. Living wills may be one answer.
This is a difficult & delicate topic. Those who for all sorts of compassionate reasons think that assisted dying should be made legal need to accept that it crosses a boundary which can lead to all sorts of unforeseen consequences, some of which will not be desirable & which may make matters worse for some. A compassionate society is one which looks properly after the weakest & most vulnerable, not one which places cost above other factors and sees only the strong and sentient as worthy. We do not need to look far into our own history to know what happens when such views take hold.
I am a great supporter of the hospice movement & have raised money for it. It is one charitable endeavour which needs far more support than it gets.
Of course, one of the reasons the Italians wanted to join the Euro was that they were fed up with that inflation
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