A Greek crisis may well become Germany’s problem

StevieJ

Rochdale_Pioneers wrote: »

No doubt as Greece falls over the Mail and Express will still be telling people that the situation in Britain is worse than anywhere else.

Or Mr Mumble will

Mr_Mumble

StevieJ wrote: »

Or Mr Mumble will

Rochdale (welcome back btw!) shows off Blighty's decline by having to continually lower the bar of the comparative country. A few months ago it was Spain and now it is Greece. By the end of the year it may well be... 'we're still better off than North Korea!'

kennyboy66_2

Mr_Mumble wrote: »

Greece is to reduce its deficit from 13% of GDP to 3% in 3 years.
Britain is to reduce its deficit from 13% of GDP to 5.5% in 4 years.

Yeah, we can really act all superior about Greece's situation

If 'journalists' were doing their job they'd be asking Brown/Cameron/Clegg if they would use British taxpayer money to bail out Greece. It would be nice to see who will put the interests of the taxpayer before that of the political elite in Brussels.

You sort of ignores that fact that Greece estimated that last years deficit at 3.7% then had to revise it to 12.7% (and rumoured to be closer to 14.5%).
It also has higher Government debt to being with.
Finally wages and prices have increased in Greece faster than they have in Germany or France so their comparitive position is getting worse.
At least being out of the Euro means that our comparitive cost position has improved.

tomterm8

Really2 wrote: »

So have you got the bit which says all EU members are liable?

Sorry for not answering quicker, I couldn't because MSE is playing up. The provision is Article 122 of the Treaty of the European Union, as ammended.

JP45

kennyboy66 wrote: »

At least being out of the Euro means that our comparitive cost position has improved.

Precisely. As the Item report discussed elsewhere on this forum makes clear, the key ray of hope for the UK economy is that the recent devaluation of sterling will give rise to a significant boost in exports. Without that competitive devaluation our prospects would be far worse.

So as an earlier poster said, we should at least acknowledge that this is one thing that Gordon Brown got right. As I recall, he remained deeply opposed to us joining the Euro whilst Blair seemed quite keen.
.

Rochdale_Pioneers

JP45 wrote: »

So as an earlier poster said, we should at least acknowledge that this is one thing that Gordon Brown got right. As I recall, he remained deeply opposed to us joining the Euro whilst Blair seemed quite keen.

Because Brown looked at the economics, Blair looked at the politics. From the latter perspective the Euro was a no-brainer. One massive currency to compete with the world's other massive currencies, the same money in use across Europe in a true free market. the problem being that it trully WAS a no-brainer. How you manage diverging economies within the Eurozone was never answered, with the entry criteria fudged from the start.

Brown gets a proper slagging off as usual though. The one thing he got right? If a decade of low interest rates, low inflation and low unemployment is wrong, I don't want to be right. Yes we hit a crash - us and the rest of the developed world. We had a long long spell - 15 years - of economic good times. When was the last time that happened? And yes, credit to Ken Clarke for being the only Tory chancellor in those 18 years not to reign pain and misery down on everyone.

Mr_Mumble

kennyboy66 wrote: »

You sort of ignores that fact that Greece estimated that last years deficit at 3.7% then had to revise it to 12.7% (and rumoured to be closer to 14.5%).

They've got dodgy politicians and the deficit was shown to be bunk after a general election. Perhaps we should wait until after the May election before we chuck stones in our similarly sized Greenhouse. :eek:

It also has higher Government debt to being with.

That is very pertinent, and is why Britain is not, yet, in the same boat. But the reduction in deficit required is similar and will cause just as much pain in London as it will in Athens. I just find it odd that the deficit reduction plan of Greece is considered so improbable while Britain's is considered a foregone conclusion.

Finally wages and prices have increased in Greece faster than they have in Germany or France so their comparitive position is getting worse.

They've still got a comparative advantage though, wages are far below that of France and Germany.

At least being out of the Euro means that our comparitive cost position has improved.

Ironically Sterling is now at a 4 month high against the Euro (and Yen). The beggar-thy-neighbour strategy of devaluing your currency can work in the short-term to boost trade and exports but it is the road to ruin. Long-term it is those countries with strong export markets (e.g. Germany and Japan) that have strong currencies while countries who devalue too readily become basket cases (e.g. Zimbabwe).

StevieJ

Mr_Mumble wrote: »

Ironically Sterling is now at a 4 month high against the Euro (and Yen). The beggar-thy-neighbour strategy of devaluing your currency can work in the short-term to boost trade and exports but it is the road to ruin. Long-term it is those countries with strong export markets (e.g. Germany and Japan) that have strong currencies while countries who devalue too readily become basket cases (e.g. Zimbabwe).

You mean like when the Tories were ejected out of the ERM kicking and screaming and we never looked back

Degenerate

Mr_Mumble wrote: »

The beggar-thy-neighbour strategy of devaluing your currency can work in the short-term to boost trade and exports but it is the road to ruin. Long-term it is those countries with strong export markets (e.g. Germany and Japan) that have strong currencies while countries who devalue too readily become basket cases (e.g. Zimbabwe).

This utter tosh perfectly demonstrates your total economic illiteracy.

It's not worth wasting too much time trying to correct such mind-boggling ineptitude, so I'll simply pose one question:

What has China's currency strategy been?

StevieJ

Degenerate wrote: »

This utter tosh perfectly demonstrates your total economic illiteracy.

It's not worth wasting too much time trying to correct such mind-boggling ineptitude, so I'll simply pose one question:

What has China's currency strategy been?

You don't mince your words do you