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Have the Greeks Actually DONE Anything to Address Their Deficit?
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No one can say the Germans were not warned:
House of Commons, 30 October 1990 –
Mr. Terence Higgins (Worthing) Will my right hon. Friend [the PM, Mrs Thatcher] take time between now and the conference in December to explain to her European colleagues what any first-year economic student could tell them, which is that the imposition of a single currency, as opposed to a common currency, would rule out for all time the most effective means of adjusting for national differences in costs and prices? Will she explain that that in turn would cause widespread unemployment, which would probably exist on a perpetual basis, and very serious financial imbalances?
The Prime Minister Yes, I agree entirely with my right hon. Friend. It would do just that. It would also mean that there would have to be enormous transfers of money from one country to another. It would cost us a great deal of money. One reason why some of the poorer countries want it is that they would get those big transfers of money. We are trying to contest that. If we have a single currency or a locked currency, the differences come out substantially in unemployment or vast movements of people from one country to another. Many people who talk about a single currency have never considered its full implications.
“The ideas of debtor and creditor as to what constitutes a good time never coincide.”
― P.G. Wodehouse, Love Among the Chickens0 -
I believe the European stress test did not include write down on sovereign EUR bonds so not surprisingly people do not trust them.
Article in the WSJ on this today:
The European Union is looking at a range of options for making its bank stress tests more credible, including tougher scrutiny of banks' sovereign debt holdings, after the tests published in July did little to ease market concerns about the region's banks, an EU official said Saturday.........But the tests didn't take full account of what would happen to bank capital if a euro-zone government goes through a major default. That has become a more pressing concern as Greece's budget reforms haven't worked as expected; meanwhile, yields on Italian and Spanish debt spiked in August to their highest levels since the introduction of the euro.
WSJ
Err, stable door, horse bolted.....:doh:There is a pleasure in the pathless woods, There is a rapture on the lonely shore, There is society, where none intrudes, By the deep sea, and music in its roar: I love not man the less, but Nature more...0 -
Whether such a thing happens is entirely a matter of political choice by the eurozone's so-called leaders. Why would they want stress tests against a decision they aren't going to make?worldtraveller wrote: »But the tests didn't take full account of what would happen to bank capital if a euro-zone government goes through a major default.
If they did such tests, what next? Many banks would fail. Then the politicians would have to rule out the option absolutely and convincingly, or they'd have to increase the capital of the banks.
But if they did that, they'd be pre-announcing their intention of allowing a default. People aren't going to put capital into banks knowing that it's required for the purpose of being lost.
Stress tests against sovereign default might just about finish the system off. So why is it not surprising to read that they're thinking about it?"It will take, five, 10, 15 years to get back to where we need to be. But it's no longer the individual banks that are in the wrong, it's the banking industry as a whole." - Steven Cooper, head of personal and business banking at Barclays, talking to Martin Lewis0 -
The bailouts are for the benefit of French and German banks that lent the money to the Greeks in the first place. They are the ones who would lose out the most if Greece defaulted.
Greece made the mistake of getting advice off a bank, Goldman Sachs in this case, who had an idea of hiding their debts in 'clever' ways. Problem is a banker's idea of clever is usually just deceit and obfuscation that only works short term as it was in this case. But what do they care, they get their bonuses in the short term and its Greece and its financiers, sorry the tax payers who are propping up their finaciers, problem in the future.
Bankers the world over really do seem to be arrogant, ineffective, immoral, self-serving parasites.
Still they fund our political parties and provide cushy jobs for them after they leave politics so nothing will be done about it. We'll just get told that we're backing down or deferring punishment for their actions because they might leave. Given the abortion they've made of so many nations finances it is questionable that our banks have anywhere to run to but its good PR and will never get really challenged in our tame press. B4stards.0 -
The Greeks in Athens are trying - according to a Greek commentator on Newsnight bartering is back - those who can't cope are heading for the hills and going back to subsistence farming.
Now why did I read that as subsidised farming?
Much safer to be doing a bit of dog & stick farming in the hills than being part of the unpaid unemployable mob in the capital.
The age of bread and circuses, to pacify the mob and buy votes, is over, as someone must have said a couple of millennia ago.
The EU as an organisation, is losing touch with reality0 -
As I think I've already said, some states of the USA effectively subsidise other states. In fact the same thing happens within the UK. It's the only way to hold a single currency zone together. Otherwise the gap between the rich parts and the poor parts will just keep getting wider.You seem to be suggesting that keeping on throwing cash at them forever is the answer."It will take, five, 10, 15 years to get back to where we need to be. But it's no longer the individual banks that are in the wrong, it's the banking industry as a whole." - Steven Cooper, head of personal and business banking at Barclays, talking to Martin Lewis0 -
Lots of rumours floating about this afternoon that Greece may announce default soon.0
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As I think I've already said, some states of the USA effectively subsidise other states. In fact the same thing happens within the UK. It's the only way to hold a single currency zone together. Otherwise the gap between the rich parts and the poor parts will just keep getting wider.
I would suspect that a majority of the German electorate are happy to see themselves getting richer whilst other nations get poorer. Add to that, that the average Greek retires 10 or 15 years earlier than the average German and you can see their point.0 -
Yes. If Greece leaves the euro it won't solve anything, but the departure of Germany from the euro would solve a lot of problems.I would suspect that a majority of the German electorate are happy to see themselves getting richer whilst other nations get poorer."It will take, five, 10, 15 years to get back to where we need to be. But it's no longer the individual banks that are in the wrong, it's the banking industry as a whole." - Steven Cooper, head of personal and business banking at Barclays, talking to Martin Lewis0
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