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Berlusconi going, going, gone?
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Thrugelmir wrote: »Europe requires fresh blood to effect the necessary change.
Seems as if the Chinese will extract a high price for any support. As Euro doesn't appear to have the financial firepower to resolve the problems internally.
People talk about Chinese bond buying as if it would be something new, they already have a couple of trillions worth.0 -
The first necessary step is to understand what the underlying problems are. We must hope that Supermario might, where Trichet evidently didn't.Do you think it can be saved?
Neither Sarkozy or Merkel look likely to win their next elections, but just removing them won't solve the underlying problems of the Euro.
Unfortunately two of the underlying problems are France and Germany."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 -
We need them to buy Italian bonds. Buying German bonds doesn't help, because the Germans don't seem very keen to borrow money to lend to Greeks and Italians.People talk about Chinese bond buying as if it would be something new, they already have a couple of trillions worth.
Of course the Chinese could get higher yields by buying UK gilts, and we're models of financial rectitude with our AAA-rated austerity programme. But we don't seem too keen to borrow money to lend to Greeks and Italians either.
Which makes it harder for us to criticise the Germans. But we may have to decide whether it's just a eurozone problem or whether it's really important to the UK."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 first necessary step is to understand what the underlying problems are. We must hope that Supermario might, where Trichet evidently didn't.
Unfortunately two of the underlying problems are France and Germany.
Well it is that the PIIGS economies were always basically bankrupt anyway.
Joining the Euro stopped them playing the "devaluation get out of jail free" card.
The straightjacket of the Euro has merely exposed their insolvency.
.....and they merely carried on in their own way after joining.
To solve the problem you need massive transfer of funds from the wealth generating parts to the poor parts. Much like in the UK the taxes generated by London go towards regional aid of some form and I include in that social security payments in deprived areas.
The problem of course is while in the UK the central gov can control how these payments are spent - the Germans cannot really control how the Greeks for example spend it.
So the conclusion - what was stated from the begining of the Euro is that you cannot have a currency union without some sort of political/economic/taxation union.
To solve the current crisis in my opinion you either need the ESB to print money - except the Bundesbank rejected that as unacceptable only a day or so ago, or you need the richer nations - that means Germany to pay up along with German control of the receiver countries economics - Can't see that happening either.
Maybe Germany might leave the Euro - which could then be allowed to sink/devalue: I personally think this is the best solution. That would put German exporters as a huge disadvantage but it depends on which solution costs the Germans less in the end.0 -
Well, Italian bonds are falling again. Merkel and Sarkozy seem to have done the trick with their bright idea of sending Berlusconi away to come back with a little letter describing how he was going to screw up the Italian economy.
The Italians had a budget surplus, and no banking crisis, and an economy that more or less worked if left alone, even if it didn't grow. The only thing they didn't have was a working central bank."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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Thrugelmir wrote: »Chinese play the long game. They'll want more than bond paper.
Agreement not to criticise human rights and the ability to buy up infrastructure assets?Please stay safe in the sun and learn the A-E of melanoma: A = asymmetry, B = irregular borders, C= different colours, D= diameter, larger than 6mm, E = evolving, is your mole changing? Most moles are not cancerous, any doubts, please check next time you visit your GP.
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I loved the piece on the BBC this AM about Italian bond yields hitting 7% which ended 'one piece of good news, German trade surplus hits a new record'. They still don't get it that the German trade surplus is the problem.I think....0
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They still don't get it that the German trade surplus is the problem.
It's half of the problem surely. The balance of payments must always be in balance by definition!
You're right though. If Germany has a surplus there must be an equal and opposite deficit somewhere.
They'll get it in the end, one way or another. Either they'll consume more or bankrupt their customers,0 -
I loved the piece on the BBC this AM about Italian bond yields hitting 7% which ended 'one piece of good news, German trade surplus hits a new record'. They still don't get it that the German trade surplus is the problem.
They just hit 7.43% :eek: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
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