Labour and the Euro summit

pqrdef

CLAPTON wrote: »

in which case why can't europe sort out the relatively trivial debt problems within the euro zone?

Because the Germans are so terrified of Weimar that they can't understand confidence or credit or the difference between paying a debt and guaranteeing it.

If they'd handled it correctly, it would have cost them a lot of promises and some theoretical risks, but very little actual money. The crucial thing was to keep eurozone government bond yields down. But that went out of the window as soon as Merkel said "haircut".

If one good thing has come out of Brussels, there does now seem to be an agreement that there will not be any more haircuts.

julieq

You can agree there'll be no more boom and bust, that doesn't make it true.

Until the ECB is allowed to act like a central bank, the eurozone is just a tracery of twigs and sellotape being kicked down the road. Eventually bits will drop off. The connection with Weimar is just an excuse given by apologists for the Euro. There is no realistic chance of hyperinflation and there is no "cultural memory" of that driving policy any more than there's a cultural memory of the potato famine in Eire driving agricultural policy there.

This is all to do with the general public in German and the idea that a strong currency is a good thing, and you will find that attitude pretty much whoever you talk to in Germany. In many respects is a very similar piece of received wisdom that leads to conclusions here such as that only manufacturing is a valuable occupation. There is some truth in both views but they're simplistic.

Thrugelmir

CLAPTON wrote: »

in which case why can't europe sort out the relatively trivial debt problems within the euro zone?

The debt problems within the Eurozone are hardly trivial.

UK based banks are well ahead of their Euro counterparts in recapitalising and deleveraging their balance sheets.

pqrdef

julieq wrote: »

Do you seriously think that the vote of the BoE on interest rate policy would have trumped the Germans supported by the French?

I don't think the French agree with the Germans on very much really. But Sarkozy is having the time of his life as Merkel's sockpuppet, and she really needs him for that.

ILW

julieq wrote: »

You can agree there'll be no more boom and bust, that doesn't make it true.

Until the ECB is allowed to act like a central bank, the eurozone is just a tracery of twigs and sellotape being kicked down the road. Eventually bits will drop off. The connection with Weimar is just an excuse given by apologists for the Euro. There is no realistic chance of hyperinflation and there is no "cultural memory" of that driving policy any more than there's a cultural memory of the potato famine in Eire driving agricultural policy there.

This is all to do with the general public in German and the idea that a strong currency is a good thing, and you will find that attitude pretty much whoever you talk to in Germany. In many respects is a very similar piece of received wisdom that leads to conclusions here such as that only manufacturing is a valuable occupation. There is some truth in both views but they're simplistic.

A view that allowing high inflation to erode savings and pensions seems pretty reasonable to me.

CLAPTON

Thrugelmir wrote: »

The debt problems within the Eurozone are hardly trivial.

UK based banks are well ahead of their Euro counterparts in recapitalising and deleveraging their balance sheets.

I think we are really agreeing here

the 'relatively trivial' comment was is response to the argument that the UK was weak and doomed to be even weaker in comparision with the enormously 'powerful' Euroland (which can't sort out it's own debt problem).

julieq

You don't boost pensions by destroying industry and making it uncompetitive. Where do you think pensions come from exactly?

As for savings, there is nothing virtuous in sitting on savings and getting a safe return. You need to recycle money and use it to generate returns. The "shrink wrapped meat" mentality (i.e. you buy nicely packaged meat without having to actually kill animals) is often seen where people just think they have a right to above interest returns without considering that those returns have to come from things they disapprove of doing themselves - lending for mortgages being the classic one, but also this means taking the money and investing it. Moderate inflation is a good thing because it provides the wind that drives investment and growth.

CLAPTON

pqrdef wrote: »

Because the Germans are so terrified of Weimar that they can't understand confidence or credit or the difference between paying a debt and guaranteeing it.

If they'd handled it correctly, it would have cost them a lot of promises and some theoretical risks, but very little actual money. The crucial thing was to keep eurozone government bond yields down. But that went out of the window as soon as Merkel said "haircut".

If one good thing has come out of Brussels, there does now seem to be an agreement that there will not be any more haircuts.

now I agree with you but
so why are you so keen to join a disfunctional outfit?

sheffield_lad

pqrdef wrote: »

But it's too big for us. We've got banks in London whose balance sheets are bigger than our GDP - and they're a threat. The rescue of RBS needed to be a European problem, because we couldn't afford it. Another big rescue now would wipe us out.

We had the opportunity to get the financial muscle of Europe behind London. But we wimped out.

From where we are now, London can only decline, as we continue to slide down the economic league table, and our credit declines, and the pound declines, in importance as well as value. A vicious spiral is setting in.

Have you any idea of how big London is in terms of finance? Out of the tobin tax £50b would have been raised £34b from the city of London!

There is no other European city in the top 10 bar Zurich and miles behind in terms of power.

Mercozy know this and want more ££ from finance but it rests in our lap and the tax generated goes straight into our coffers that's what they don't like about the current situation.

StevieJ

Graham_Devon wrote: »

This is the problem for me at the moment.

Labour is in opposition. That does not mean that they have to literally oppose everything that's done, talked about, or put forward. But that certainly seems that's their understanding of their "job".

This, today, wasn't even opposing. It was blatent nonsense spouted in the hope that what they were saying would stick.

It seems we really are at the stage where labours foreign secretary is not at all concerned with how big this item is, and is far more concerned with spreading malice.

Perhaps they could Liberally oppose instead

Amid undisguised fury from senior Liberal Democrats, the Deputy Prime Minister said he had told Mr Cameron the result of last week's European Council summit was "bad for Britain".
Mr Clegg, who had initially given carefully-worded approval to the Prime Minister's actions, pointed out that Mr Cameron had failed to bring back any new safeguards for the UK economy.
"I'm bitterly disappointed by the outcome of last week's summit, precisely because I think now there is a danger that the UK will be isolated and marginalised within the European Union," he told BBC1's Andrew Marr Show

http://www.google.com/hostednews/ukpress/article/ALeqM5jzN6zUj5RNXqUGK8Q932Wi3eZcVw?docId=N0384821323572276264A