What now? EU

money-spending-expert

Hi,

I have been following Pound Sterling forecast dot com and Euro Rate Forecast dot com for updates on this situation and how it may effect the Pound.. Complete non biased opinions on the sites and useful information for sure :j

abaxas

howee wrote: »

Exactally the reason we needed to protect it CITY=8% GDP

Few years ago some guy in Newsnight argued that the bank bailout actually meant that since the creation of money banks had not paid any tax.

Interesting point....

Really2

Graham_Devon wrote: »

I
How long will this all go on for? It's really tedious now!!! I bet this is still goign on in 2013.

Although not said I think that is the end game, how long can they keep it on life support so others can leave orderly.

It's a bit like a struggling company, if you can get rid of the parts making losses you may have a chance of surviving.
Carrying on and pretending it is not happening or shutting up shop are not really options, not when there is a slim chance you can turn it round for the majority.

sheffield_lad

money-spending-expert wrote: »

Hi,

I have been following Pound Sterling forecast dot com and Euro Rate Forecast dot com for updates on this situation and how it may effect the Pound.. Complete non biased opinions on the sites and useful information for sure :j

Depends what you want
cheap holidays = strong £
cheap exports = weak £

Happy to pay a little bit more for my Meythos if it helps the manufactures with the exports.

sheffield_lad

Really2 wrote: »

Although not said I think that is the end game, how long can they keep it on life support so others can leave orderly.

It's a bit like a struggling company, if you can get rid of the parts making losses you may have a chance of surviving.
Carrying on and pretending it is not happening or shutting up shop are not really options, not when there is a slim chance you can turn it round for the majority.

Greece will have left by the summer, Spain next

julieq

The financial transaction tax would be a disaster, but it's an easy card for the French to play as a sop to public opinion. They'll be able to play off populist prejudice against the Anglo-Saxon cultural approach to business but if the entire financial services industry took the A380 to Singapore it'd make on the skinny side of FA difference to the French and Germans.

If it was agriculture you'd see different behaviour.

Ultimately both France and Germany are structurally weak and in danger of serious decline. Where I think we tend towards self flagellation and looking outwards for excellence, both France and Germany believe they are doing nothing wrong and the world will eventually fall into line behind them providing they protect their local markets. One of the most serious costs of the EU comes from protectionism, and we'd have far lower costs for a great many things if that was removed. But you can't hold back the tide for ever.

I woke up this morning worrying about the Eurozone. As I took in what's happened, I'm oddly more relaxed. It's up to the Eurozone now to fix their problems. We're arguably far better off outside that process looking in. I think we need to be prepared to help provide guarantees and some breathing space, but what the eurozone will have to contemplate is that they can't spend like sailors on shore leave on social policy unless they raise more in tax on a sustained basis in regions that show no inclination at all to want to pay it. Interesting times.

Degenerate

Graham_Devon wrote: »

How long will this all go on for? It's really tedious now!!! I bet this is still goign on in 2013.

There is an awful lot of sovereign debt due to be rolled-over early next year. If PIIGS bond yields continue heading in the direction they are, it simply won't be possible for them to raise enough cash at an affordable rate. This will be real crunch when they simply won't have enough money and will default on their debt, fail to pay their workers, or both.

Then we can look forward to:

- A total financial clusterf*ck of cascading defaults through Europe's banking system.
- Widespread deprivation and poverty as people lose their savings, companies collapse, unemployment soars and some can no longer afford the basic necessities.
- Massive civil unrest.

How long do you think this can last before Governments are toppled and their successor regimes see sense and leave the Euro? The reason for a country to fear leaving is the financial chaos that would ensue. If a financial catastrophe is happening anyway, you might as well take off the straightjacket and escape.

jjlandlord

julieq wrote: »

Ultimately both France and Germany are structurally weak and in danger of serious decline.

I'm sorry to be a wake up call, but France and Germany are both bigger economies that the UK.
Germany is actually the number 1 exporter in the world, and one would argue that France's industry is in much better shape than the UK's. And overall the UK remains the most indebted industrialised country (or right behind Japan).

Every country has his own strengths and weaknesses, but if the UK's strength is to be an off-shore financial centre, tax heaven style, we should all be worried because that is structurally weak.

sheffield_lad

jjlandlord wrote: »

I'm sorry to be a wake up call, but France and Germany are both bigger economies that the UK.
Germany is actually the number 1 exporter in the world, and one would argue that France's industry is in much better shape than the UK's.

Every country has his own strengths and weaknesses, but if the UK's strength is to be an off-shore financial centre, tax heaven style, we should all be worried because that is structurally weak.

Not exactly correct Germany are very strong as the benefit of the euro was cheaper exports, but they will be weaker when Greece and Spain pull out and devalue. As for France they have a slightly bigger economy than us although manufacturing we are actually bigger than them.

Suggestion lets start questioning the argicultural policy and suggest a tax on farmers do you think Mr Sark would be so we are all Europeans then?

Ummm.

julieq

jjlandlord wrote: »

I'm sorry to be a wake up call, but France and Germany are both bigger economies that the UK.
Germany is actually the number 1 exporter in the world, and one would argue that France's industry is in much better shape than the UK's.

Every country has his own strengths and weaknesses, but if the UK's strength is to be an off-shore financial centre, tax heaven style, we should all be worried because that is structurally weak.

That doesn't mean they're not structurally weak and in decline. It's one of these classic received wisdoms that Germany is in brilliant shape because it's a big manufacturer, but it has unsustainable social provision and big problems with paying for housing into retirement. The French social and pensions provision is also unsustainable on any realistic view of costs, but impossible to reform because of the strength of the unions there.

It's fine if you can lock your borders and sustain your own industry, but in competition with the rest of the world you're in trouble. Germany in particular has seen problems with the smaller privately owned manufacturing companies being swallowed up and outsourced to the East. It's not a gaping wound yet, but it's a growing problem. They will need to sort it out. You're seeing the first landslip on the tectonic faultline with this crisis, and it's telling that the solution involves imposition of technocrats to run economies and reduce deficits.

It's very fashionable to bash ourselves and look enviously at France and Germany. And in essence that's why we're likely to come out of this better in the longer game, because we are self critical. It's not that we're perfect and we do need to up our game in terms of productivity or we'll sink away, but we do see problems to solve where France and Germany I think genuinely believe it's the rest of the world that needs to fix itself.

There's absolutely no reason why banking is a less virtuous industry than making stuff by the way. The problem we have is that it's a portable activity, hence Cameron's efforts to remove any incentives to move it.