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Splits In Euro Zone Emerge Amid Debt Crisis

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http://www.nytimes.com/2010/11/30/business/global/30euro.html?_r=1&ref=business

Even as Europe struggles to contain its latest debt crisis, fresh fissures are emerging that show the euro zone diverging into two — or even three — different economic parts that threaten to compound the problems even further.

After publication of new figures Monday, a senior European Union official acknowledged for the first time that a two-speed euro zone might now be developing, with Germany racing ahead while debt-laden countries on the Continent’s periphery battle stagnation.

“It has to be admitted, there is a certain dualism in Europe,” Olli Rehn, the European commissioner for economic and monetary affairs, said Monday while announcing the commission’s autumn economic forecasts.

Germany has “rebounded very forcefully from the financial crisis and economic recession with a strong growth of exports — increasingly spilling over to the domestic demand,” Mr. Rehn said. Ireland and some countries in the south of Europe, by contrast, “have faced significant difficulties,” he said.

Adding to the complexity, other European officials say, is a third group of economies that includes France and Italy, which did not suffer as much during the recession because they are not as reliant on global trade — but have not recovered as well, either, as trade has rebounded.

Significant economic differences have always existed between the euro zone’s northern and southern countries. But some economists now believe that, exacerbated by the shocks of the financial crisis, these multiple differences threaten the future of the euro itself.

“I don’t think it’s sustainable in the absence of a much greater degree of political and economic integration,” said Simon Tilford, chief economist at the Center for European Reform, a research institute based in London.

Er no it's not developing there was always a two speed Europe it just the political morons in the EU decided to pretend there wasn't. Guess what reality always wins, you can lie for awhile people might believe that lie but eventually the lie is revealed.

No one can really be shocked by this admission the Eurozone was never harmonised economically to begin with. The whole project was rushed for ego reasons.

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That old adage: The market always wins, proves itself to be true once again.

The USE does not equal the USA. Economic cohesion lasts as longs as political consensus lasts. History demonstrates that a USE is a political impossibility without a Dictatorship (Rome, Napoleon, Hitler etc.).

A 2 stage Euro--even if workable--would simply be a step closer to reversion to historical status quo.

I would sell Euros if I had any (I have 35 of them left over from my visit to Spain a week ago--you can smell the fear down there).

The political will is eroding fast--we are about to see the biggest political and economic implosion in history unless a strong and charismatic leader emerges to save the day. :ph34r:

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Speaking of charismatic leader emerging...Remember when Tony Blair almost became the EU president? But instead they chose Herman Van Rumpleroy, who obviously doesn't hold any power because he is weak.

Tony Blair would be speaking about the crisis everyday on the Euro media, and moving action to integrate politically and economically to stop the crisis. But some Euro states were scared of letting Tony Blair be president for exactly that reason. They were not ready to scede sovereignty.

Edited by aa3

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Speaking of charismatic leader emerging...Remember when Tony Blair almost became the EU president? But instead they chose Herman Van Rumpleroy, who obviously doesn't hold any power because he is weak.

Tony Blair would be speaking about the crisis everyday on the Euro media, and moving action to integrate politically and economically to stop the crisis. But some Euro states were scared of letting Tony Blair be president for exactly that reason. They were really ready to scede sovereignty.

Well let us count our lucky stars that we dont have Tony Blair at the helm then. The last thing Europe needs is someone to try and unite it.

Mind you, I think that you overestimate Tony Blair. The thing about dishonesty is once you are caught, you lose all credibility. Tony Blair lost his by invading a sovereign state on a false premise. Once lost, it never returns.

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Speaking of charismatic leader emerging...Remember when Tony Blair almost became the EU president? But instead they chose Herman Van Rumpleroy, who obviously doesn't hold any power because he is weak.

Tony Blair would be speaking about the crisis talking sh!t everyday on the Euro media, and moving action to integrate politically and economically to stop the crisis speed up the crisis (no bad thing) via social non acceptance . But some Euro states were scared of letting Tony Blair be president for exactly that reason for his inability to think of anything other than Tony Blair. They were really ready to scede sovereignty.

Fixed that for you

Edited by Tamara De Lempicka

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"The political will is eroding fast--we are about to see the biggest political and economic implosion in history unless a strong and charismatic leader emerges to save the day. :ph34r:

"How about this bloke. He is strong and charismatic :D

ahmadinedzad-afp540.jpg

post-25434-0-97038900-1291106020_thumb.jpg

Edited by LittleSteroid

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Speaking of charismatic leader emerging...Remember when Tony Blair almost became the EU president? But instead they chose Herman Van Rumpleroy, who obviously doesn't hold any power because he is weak.

Tony Blair would be speaking about the crisis everyday on the Euro media, and moving action to integrate politically and economically to stop the crisis. But some Euro states were scared of letting Tony Blair be president for exactly that reason. They were really ready to scede sovereignty.

Tony took on the religion of the old Holy Roman Empire for political positioning. He may not be finished yet. There is a growth trend in the Roman church at present, possibly due to fear of the future which may make the ground right for another big religious move in Europe that history bears witness to (Constantine's revolution, the Reformation). History repeats as most will agree. The scene may be set for another religious resurgence and I do NOT think it will be a positive thing. Never underestimate the power of religious fanaticism that is a large part of human psyche today as it always has been.

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Well let us count our lucky stars that we dont have Tony Blair at the helm then. The last thing Europe needs is someone to try and unite it.

Mind you, I think that you overestimate Tony Blair. The thing about dishonesty is once you are caught, you lose all credibility. Tony Blair lost his by invading a sovereign state on a false premise. Once lost, it never returns.

The WMD issue really damaged him, and rightfully so. However even after that he won a majority government.

Look at events right now in Europe, its usually Angela Merkel the media is going to, to find out where things are going. Herman Van Rumpleroy is rarely even mentioned. Whereas I guaruntee Tony Blair would be in the center of things if he was the EU president.

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The WMD issue really damaged him, and rightfully so. However even after that he won a majority government.

Look at events right now in Europe, its usually Angela Merkel the media is going to, to find out where things are going. Herman Van Rumpleroy is rarely even mentioned. Whereas I guaruntee Tony Blair would be in the center of things if he was the EU president.

Hindsight might (might) vindicate him and he could (could) emerge as a hero. Example, lets say a 9/11 type event occurred on British soil and the political backlash against the ME in general may (may) follow (the WMD did exist but not in Iraq when the Coalition got there for example).

The world is shifting rapidly. Looks like N Korea may soon be history as China gives the green light to unification, the EU as we know it disintegrates to be replaced with a sort of dictatorship to run things until democracy is restored. Russia feels increasingly isolated and aligns itself ever closer to the disgruntled ME powers (Iran, Syria for example). ME tensions grow as the Sino-US-EU dictatorship look for a solution to settle global recession and political powderkegs. Someone pushes the button and...........................................

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"Tony took on the religion of the old Holy Roman Empire for political positioning."

Oh yeah, Tony's wanted to be pope for ages.

Not Pope but a modern day EU dictator (Holy Roman Emperor). Political-religious partnership that will control the minds of the desperate. Hitler was a master of this and very nearly pulled it off by combining religion (worship of Dictator and his ideals) and political power (3rd Reich). Constantine pulled it off in the 4th Century and preserved the power of the Roman Empire through what became the Roman Catholic (universal) "Church." All very Hegelian IMO.

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Hindsight might (might) vindicate him and he could (could) emerge as a hero.

I doubt it, unless you have a time machine and can make iraq have WMD (as claimed vehemently and repeatedly by Tony Blair)

Example, lets say a 9/11 type event occurred on British soil and the political backlash against the ME in general may (may) follow (the WMD did exist but not in Iraq when the Coalition got there for example).

Being a hero would normally involve getting it right enough to have an effect on the outcome

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But if the market produces financial crashes and global warming then its pre-ordination isn't a comforting conclusion.

IMO its the abuse of the market that leads to the market correcting itself. The Brown years have put us where we are today and the market is deflating the bubbles as a reaction to the earlier abuse.

Solution is to obey the market's laws. Don't borrow more than you can repay based on a realistic assessment of your future income would be a good place to start.

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I sadly agree that there's plenty of miles left in Tony yet, look at how Mandelson has bounced back every time he was de-frocked. :lol:

Please. I've just had me brekkie.

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Hindsight might (might) vindicate him and he could (could) emerge as a hero. Example, lets say a 9/11 type event occurred on British soil and the political backlash against the ME in general may (may) follow (the WMD did exist but not in Iraq when the Coalition got there for example).

The world is shifting rapidly. Looks like N Korea may soon be history as China gives the green light to unification, the EU as we know it disintegrates to be replaced with a sort of dictatorship to run things until democracy is restored. Russia feels increasingly isolated and aligns itself ever closer to the disgruntled ME powers (Iran, Syria for example). ME tensions grow as the Sino-US-EU dictatorship look for a solution to settle global recession and political powderkegs. Someone pushes the button and...........................................

My money is on a Nordic Euro/deutschemark with Russia (it might be a new Hanseatic League type federation) backed by gold and Russia's natural resourses. The Goths get the natural resourses the Slavs get finance/technical know how as it was pre WW1.

History never repeats but it does rhyme.....

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After publication of new figures Monday, a senior European Union official acknowledged for the first time that a two-speed euro zone might now be developing, with Germany racing ahead while debt-laden countries on the Continent’s periphery battle stagnation.
Germany has “rebounded very forcefully from the financial crisis and economic recession with a strong growth of exports — increasingly spilling over to the domestic demand,” Mr. Rehn said. Ireland and some countries in the south of Europe, by contrast, “have faced significant difficulties,” he said.

It's amazing how well a country can survive a recession compared to others by taking the simple measure of making it illegal to make people redundant.

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It's amazing how well a country can survive a recession compared to others by taking the simple measure of making it illegal to make people redundant.

No, that alone wont do it.

Re : former USSR

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It's amazing how well a country can survive a recession compared to others by taking the simple measure of making it illegal to make people redundant.

It doesn't necessarily work in these days of multinats.

I don't know what you mean by 'illegal' exactly - in my experience there are penalties in the EU if you dump people onto the social.

But multinats can - and do - pay up and close factories if they can switch to cheaper labour countries.

I remember this happening in two places in Belgium. There was a lorry plant in Mechelen that cost more to close than it did to build in the first place. I think the same for the Renault place in Vilvoorde, just North of Brussels.

It's difficult to know what Governments can do against multinats. Ireland benefits from 'Ghost' companies that have left other countries without tax revenues but employ almost no-one locally. Almost any national legislation is circumvented these days.

That's the problem with the next revolution. It isn't clear exactly who to shoot and string up, or exactly which other country they are in.

Edited by copydude

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It doesn't necessarily work in these days of multinats.

I don't know what you mean by 'illegal' exactly - in my experience there are penalties in the EU if you dump people onto the social.

In Germany it is actually illegal. You can't make people redundant without both the permission of the staff themselves and the permission of the local government... and German local governments are very powerful and very defensive and almost NEVER allow redundancies... why would they?
But multinats can - and do - pay up and close factories if they can switch to cheaper labour countries.
Not in Germany they can't. YOU CAN'T MAKE PEOPLE REDUNDANT. The only way to do it would be to give everyone early retirement with a big enough pension to ensure they never have to work again.
I remember this happening in two places in Belgium. There was a lorry plant in Mechelen that cost more to close than it did to build in the first place. I think the same for the Renault place in Vilvoorde, just North of Brussels.

It's difficult to know what Governments can do against multinats. Ireland benefits from 'Ghost' companies that have left other countries without tax revenues but employ almost no-one locally. Almost any national legislation is circumvented these days.

Still not Germany where it's illegal to make people redundant.

Multinationals are forced to close profitable plants in other european countries and keep German plants open because they simply CAN'T close them. On top of that, the German unions are completely out of control... you can't sack people for going in strike, you can't make them redundant. German employment terms are way ahead of every other country in Europe as a result.

What the German government did was have laws that encouraged companies to move to0 Germany for a couple of decades, then CHANGE employment laws to LOCK IN THE EMPLOYMENT, preventing companies from leaving.

It's hard to accept that Germany is doing this for 2 reasons:

1) It was an amazing plan and no-one can believe they pulled it off.

2) It's going to decimate manufacturing in surrounding countries.

Eventually once companies have closed all their factories outside Germany and are still losing money, Germany can just relax it's employment terms. Companies wont just leave since Germany will be the only western european country left with the infrastrucure left to support the manufacturing.

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Not Pope but a modern day EU dictator (Holy Roman Emperor).

Well he failed there, the Masons at the EU could not forgive him for the Iraq War and his battle with Brown for not taking the UK into the Euro and losing the argument ( it is said that they had terrible rows over it, Blair YES Brown NO ) at least we should be thankful to Brown for winning that argument. ;)

Instead we had that **** Ashton his mate being backed by Brown in becoming the most powerful and highest paid woman in politics. She has come a long way since her position as treasurer of CND still refusing to say where their funds came from. You just can`t make it up. :rolleyes:

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In Germany it is actually illegal. You can't make people redundant without both the permission of the staff themselves and the permission of the local government... and German local governments are very powerful and very defensive and almost NEVER allow redundancies... why would they?

Not in Germany they can't. YOU CAN'T MAKE PEOPLE REDUNDANT. The only way to do it would be to give everyone early retirement with a big enough pension to ensure they never have to work again.

Still not Germany where it's illegal to make people redundant.

Multinationals are forced to close profitable plants in other european countries and keep German plants open because they simply CAN'T close them. On top of that, the German unions are completely out of control... you can't sack people for going in strike, you can't make them redundant. German employment terms are way ahead of every other country in Europe as a result.

What the German government did was have laws that encouraged companies to move to0 Germany for a couple of decades, then CHANGE employment laws to LOCK IN THE EMPLOYMENT, preventing companies from leaving.

It's hard to accept that Germany is doing this for 2 reasons:

1) It was an amazing plan and no-one can believe they pulled it off.

2) It's going to decimate manufacturing in surrounding countries.

Eventually once companies have closed all their factories outside Germany and are still losing money, Germany can just relax it's employment terms. Companies wont just leave since Germany will be the only western european country left with the infrastrucure left to support the manufacturing.

Very interesting post.

I'm not clear whether you are saying that this is a good thing or a bad thing.

Multinats that had placed factories and business in East Germany (during perestroika) did indeed shift out the minute labour/EU regimes become more expensive.

Upon the Unification of Germany, nearly half the people in East Germany lost their jobs. That Germany took some measures to protect that happening again is reasonable, yes?

At what point that kind of legislation becomes overkill, I don't know. There's still disproportionately high unemployment in the former old East as far as I know.

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  • 311 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
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      • Even
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      • up 5%



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