Who's next? Spain? Italy?

HAMISH_MCTAVISH

Rochdale_Pioneers wrote: »

When the head of the IMF told Cameron in Davos that cutting spending would trigger a double dip recession were you listening? He was, hence the abrupt reversal in policy.

I don't agree with much you post.

However you are spot on with this one.

The Tories have U-Turned on rapid cuts faster than an F1 driver chasing a tax free residence in Monaco.

When "Dave" went to Davos, he was told in no uncertain terms by every economist in sight all the way up to the head of the IMF, that it would be financial suicide to cut too much too soon, and they are finally listening, despite their rather dogmatic previous position to the contrary. SO perhaps you can teach an old dog new tricks after all.

chucky

HAMISH_MCTAVISH wrote: »

And our National Debt to GDP ratio is actually far better than many others....

you're right Hamish IMO but our debt is longer term than most of the other countries - that's a bit of a worry and doesn't mean that we're out of the woods unfortunately

worldtraveller

European Union leaders set a precedent by bailing out Greece and other euro zone countries such as Portugal would have a strong case for tapping the region for funds if they needed to, Erik Nielsen, chief European economist at Goldman Sachs, told CNBC.com Thursday.

"If I was the Portuguese finance minister needing this one day, I would think I have a strong case," Nielsen said.

Now that EU leaders agreed to effectively backstop Greece's debt, they would struggle to say no to other euro-zone economies in the same difficult situation, he said.

Yahoo/CNBC

Who's next? :think:

Rochdale_Pioneers

HAMISH_MCTAVISH wrote: »

When "Dave" went to Davos, he was told in no uncertain terms by every economist in sight all the way up to the head of the IMF, that it would be financial suicide to cut too much too soon, and they are finally listening, despite their rather dogmatic previous position to the contrary. SO perhaps you can teach an old dog new tricks after all.

We agree on the key point - the Tories have got the economy wrong. A year ago it was unfashionable to say the government were right - it was all their fault surely? Yet the government did lead the rest of the world in a stimulus package, and its for a very good reason that the Tories were so alone in objecting to such measures - they were dead wrong.

This is why we see the Tory majority evaporate after their conference. Its easy to hate Brown, and very easy in a mid term opinion poll to say you'll vote for the other lot. But ever since Cameron proclaimed the golden age of austerity, and Osborne said we're all in this together, people have had to actually look at what the other lot would do. And it scares them.

The IMF and the world economic community told Dave that his policies would crash the UK alone back into a deep recession. He's now trying to row back from the dogmatic pro-deficit cut anti-jobs position and has created a big row in his party who still want to cut hard and deep and fast. Anyone worried about the stability of their job, or keeping their roof over their head will not vote for a Tory party who seemingly wants to sacrifice them on the bonfire in order to reduce a debt statistic that doesn't directly affect them. Turkeys do not vote for Christmas, people do not vote themselves out of a job.

Cameron can turn this around - maybe - by becoming clear and coherent about what his policy ambitions and priorities are. Except that he can't because what his party wants and what the public will accept are different and growing apart. Hatred of Brown is not enough to push enough voters into the Tory camp - not when they fear economic recovery. What we will see instead is a fragmentation of the vote and a lot of people not voting for the big three.

Labour are not going to lose the election. Just you watch. Cameron will get more votes - of that I'm sure. Just less seats. And as he has so wedded himself to the stupidity of First Past the Post he can't complain when the result is skewed....

Emy1501

HAMISH_MCTAVISH wrote: »

Because, amongst other things, we are still the worlds 5th largest economy, the worlds 6th largest manufacturer, one of the worlds top 3 financial centres, and we have an independant currency, which can be devalued if needed and has interest rates set for our economic conditions, not Germany or France's......

And our National Debt to GDP ratio is actually far better than many others....

US: 97.5%,

UK: 72.7%,

Germany: 86.6%,

France: 80.3%,

Italy: 121.1%,

Japan 227.4%

Probably worth mentioning Japan hasn't had any trouble financing it's debt....... After 2 decades of running excessive deficits and significant QE.

Probably also worth mentioning that our unemployment is significantly lower than most of the other major countries on that list as well, and that although we have exited recession later, and with lower growth, it wasn't that much later, nor that much lower than some others, and it's a price well worth paying for maintaining a higher level of economic activity and employment during the recession, which we did.....

Gordon Brown deserves a lot of flack for a lot of things.

Being an authoritarian, illiberal, socialist, big government loving, high taxing, nanny state promoting, twit...... for example. Much like all Labour party members.

But his response to this economic crisis has been exactly the right thing to do. Even if we can rightly despise him for running up such a large structural imbalance in search of his socialist utopia prior to it.

Aren't their house prices still lower than 20 years ago? No doubt the Uk won't go bust but if we carry on the way we are we will be in trouble soon

HAMISH_MCTAVISH

worldtraveller wrote: »

Who's next? :think:

Nobody.

This is the age of the bailout. It seems everyone has learned their lessons from the 70's, 80's and 90's.

The contagion will not be allowed to spread, because in a globalised environment, EVERYONE eventually loses if it does.

HAMISH_MCTAVISH

Emy1501 wrote: »

Aren't their house prices still lower than 20 years ago?

Yes.

But even after a 20 year decline, they are still higher than the UK's were at peak.

The Japanese bubble saw entire districts where real estate traded north of $1,000,000 a square metre...... Thats one million US dollars..... For one metre of a building.

To put it in perspective, my kitchen cupboard would be valued at 2 million dollars. My bathroom would be worth 15 million dollars. My kitchen over 20 million dollars. My house around 200 million dollars. Or a cool half a billion US dollars if you included the garden and garage.

When we see that here, then talk to me about a bubble and a 20 year decline.;)

HAMISH_MCTAVISH

Rochdale_Pioneers wrote: »

We agree on the key point - the Tories have got the economy wrong.

No mate, in the long term, the Tories have it spot on.

We do need to cut the size of the state. We do need to cut the numbers of public sector jobs, and not just a little, but a lot. Perhaps as much as 50%.

We do need to slash and burn our way through public sector waste, pensions, non jobs, the nanny/surveillance/welfare state, and every other repulsive thing New Labour stands for.

I would love to see Gordon Brown and his sycophantic followers publically humiliated and cast into the wilderness for decades.

But we cannot do this overnight, and we must first create a low tax, private sector friendly, enterprise driven, aspirational society so that we don't cut off our nose to spite our face.

In that regard, Dave's previous position of cutting first and asking questions later was dead wrong. But they have realised this, which is why the U-turn.

My only fear is that it is too late.... And they won't commit themselves to renouncing the dogmatic cutting and austerity message until it is too late, and we end up with a hung parliament, or worse, another term of Labour.

Rochdale_Pioneers

HAMISH_MCTAVISH wrote: »

we must first create a low tax, private sector friendly, enterprise driven, aspirational society so that we don't cut off our nose to spite our face.

In that regard, Dave's previous position of cutting first and asking questions later was dead wrong. But they have realised this, which is why the U-turn.

And I am happy to have debates about economics when they're on a firm footing - BTW I absolutely agree with you about cutting out waste, that'll happen anyway. The government have already implemented the Grafton report and started the process of cutting.

You have to ask then why the policy was cut now and deeply when it was so glaringly obvious that it was wrong? Its not rocket science to see what it would do to the economy yet it was going to be done anyway. Is the damage to the country the price worth paying for the few to profiteer from everyone else's misery. Again?

worldtraveller

As Greece wins at least temporary respite from its debt troubles, will Italy be the next to face a crisis?

The chronically underachieving nation is saddled with an astonishing level of debt, no real prospect for growth, and a a leader mired in scandal.

True to form, Italians, by nature prone to living in the moment, don't seem too concerned: they have high levels of savings, tourism, iconic brands and a habit of muddling through.

Economists and investors are debating whether the 'i' in PIGS — the unkind moniker used to single out the sluggish economies and big deficits of Portugal, Italy, Greece and Spain — really stands for struggling Ireland, not Italy. Some propose extending the acronym to PIIGS.

But many Italians take the attitude: If you have a pig, make prosciutto. :cool:

AP

Don't you just love 'em!