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'one In Seven' Chance That Nations Will Abandon Euro

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http://www.telegraph.co.uk/finance/currency/8427703/One-in-seven-chance-that-nations-will-abandon-euro.html

The risk is roughly one in seven that Europe's ongoing debt crisis will push member nations to abandon the shared currency, raising the spectre of the "effective end of the euro area," the Economist Intelligence Unit has warned.

Attempts to restore investors' confidence in debt-laden nations' ability to honour their commitments could see the weaker eurozone members grow ever wearier of the demands placed on them, according to a new report from the research body.

Meanwhile, those countries whose finances are in better shape could lose patience with propping up other member nations, in this worse case or "ultimate risk" scenario.

The pressure on politicians from voters at home to leave the shared currency could then become "irresistible", resulting in either stragglers like Portugal or Ireland or a robust economy such as Germany deciding to leave, before other members follow suit.

"This scenario posits that sooner or later, the cement that has held European countries together for decades cracks and the progression towards ever-closer union comes to a spectacular halt," said researchers, who gave it a likelihood of 15pc.

The report's central scenario - put at a 50pc probability - is that the eurozone will muddle through the crisis, with the most indebted countries accepting the harsh reforms needed to cut their deficits and stronger members reluctantly offering enough support to contain the crisis.

So there is 50% probability that the Eurozone can contain the debt crisis by issuing more debt and crashing the economies of those indebted nations? Sounds like a reasonable plan, the irony that this plan itself will force those indebted nations to leave appears lost on the authors.

There has been no cement holding the EU together, it's the political elite troughing together that's held it together it's not a club run for the people of Europe.

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I am always minded of the pre-crash forecast(s) just as TSHTF of the UK going into recession: weren't 'economists' putting it at 10% chance of recession and similar to the housing market going -ve? These people just don't want to admit it when something is seriously up and so they put silly percentages in their predictions as it makes them look like they know what they are talking about as opposed to picking the numbers out of thin air!

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If popular support constitutes cement then I disagree. I talk with continental Europeans all the time, and I come across very, very few who don't support the Euro.

The irony is that, in my experience, it's nationals from the countries that have gained the most from the Euro (Germany and Holland) that show at least some reservations and scepticism, while nationals from the countries that are being battered because they can't adjust their currency down (Spain, Ireland, Greece, Portugal) are childlike in their unalloyed enthusiasm.

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If popular support constitutes cement then I disagree. I talk with continental Europeans all the time, and I come across very, very few who don't support the Euro.

The irony is that, in my experience, it's nationals from the countries that have gained the most from the Euro (Germany and Holland) that show at least some reservations and scepticism, while nationals from the countries that are being battered because they can't adjust their currency down (Spain, Ireland, Greece, Portugal) are childlike in their unalloyed enthusiasm.

Probably because they have never had it so good as the last 15 years or so minus the last couple.

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Probably because they have never had it so good as the last 15 years or so minus the last couple.

That's a fair comment, if it is sentiment that's holding up. You would expect those with currency pegs, but still own currency, to jump ship first. The pegs are hurting, particularly countries like Latvia. But they are still hanging in.

And you still have countries queuing to join. Wasn't the grand plan for 40 countries? I know Croatia and Iceland are supposed to be next up in 2014.

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The pegs are hurting, particularly countries like Latvia. But they are still hanging in.

Is it fear that is keeping them hanging in? I mean, in a global environment are they simply afraid of the threat of being frozen out of international trade by those who remain in the euro? I'd ask that for Ireland, Greece, Portugal etc: are they simply afraid of the implied threat of what will happen if they drop out of the euro and default on a portion of their debt?

Maybe this fear / threat is what is keeping them all together at the minute?

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If popular support constitutes cement then I disagree. I talk with continental Europeans all the time, and I come across very, very few who don't support the Euro.

The irony is that, in my experience, it's nationals from the countries that have gained the most from the Euro (Germany and Holland) that show at least some reservations and scepticism, while nationals from the countries that are being battered because they can't adjust their currency down (Spain, Ireland, Greece, Portugal) are childlike in their unalloyed enthusiasm.

These are folks who run their own business or ?

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That's a 6 in 7 chance the euro will survive.

Not bad odds considering the doom-mongering from the Torygraph since the euro arrived over 10yrs ago. And they were foaming with joy in 2008-09 when it's implosion was "imminent" :rolleyes:

This article might just be a subtle endorsement of the Euro from the Torygraph B)

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These are folks who run their own business or ?

I know some people in sth of France running their own businesses. They wouldn't be fans of going back to the franc/lira etc.

They can go over the border to Italy, buy their stock, pay with their french card etc. At no extra cost. Their accounts s/w handles the euro much easier than the 15 different currencies previously. And if they want to employ an Italian living 30kms away, they can do so in the knowledge the salary in euros won't fluctuate. All positives.

Sure there are negatives, but overall it works better than 15yrs ago...

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That's a fair comment, if it is sentiment that's holding up. You would expect those with currency pegs, but still own currency, to jump ship first. The pegs are hurting, particularly countries like Latvia. But they are still hanging in.

And you still have countries queuing to join. Wasn't the grand plan for 40 countries? I know Croatia and Iceland are supposed to be next up in 2014.

Iceland? who is next - Greenland? :lol:

Still , Iceland has a long reputation of strong banks and financial conservatism ; they'd be a great addition.

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I know some people in sth of France running their own businesses. They wouldn't be fans of going back to the franc/lira etc.

They can go over the border to Italy, buy their stock, pay with their french card etc. At no extra cost. Their accounts s/w handles the euro much easier than the 15 different currencies previously. And if they want to employ an Italian living 30kms away, they can do so in the knowledge the salary in euros won't fluctuate. All positives.

Sure there are negatives, but overall it works better than 15yrs ago...

That's kind of what I was thinking.

Business people I can see being in favour of it due to their ability to avoid paying for tax based infrastructure. Those left with the now increased bill, lower wages, less secure employment and so on might be of a different mind (and crucially for a democracy are going to massively outnumber the business folks.)

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Iceland? who is next - Greenland? :lol:

Still , Iceland has a long reputation of strong banks and financial conservatism ; they'd be a great addition.

Here are all the great additions coming up for you: :)

Source

My current assessment of which EP elections will be the first a particular country’s citizens vote in.

2014

Croatia

Iceland

2019

Albania

2024

Armenia

Bosnia and Herzegovina

Georgia

Macedonia

Moldova

Montenegro

Serbia

Not long after the EU chooses to let it in

Turkey

Ten years after they sort themselves out

Azerbaijan

Belarus

Ukraine

Not all will adopt the Euro, but it makes sense for Croatia - next door to Montenegro, which has adopted the Euro even while not being EU - and it's likely that many will go on currency pegs as did the Baltics.

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That's a 6 in 7 chance the euro will survive.

Not bad odds considering the doom-mongering from the Torygraph since the euro arrived over 10yrs ago. And they were foaming with joy in 2008-09 when it's implosion was "imminent" :rolleyes:

This article might just be a subtle endorsement of the Euro from the Torygraph B)

When the Euro was launched I always felt it's first real test would be in a recession, if it could eliminate the structural differences between the economies it would probably survive. If those structural imbalances remained I was never convinced it would survive. If I have been running the Euro project I would have wanted to avoid a major recession for at least 10 years, preferable 20 year to ensure economic harmonisation

It's going to take a lot of political effort for the Euro to survive in it's current form.

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I don't really see what everybody is getting so excited about. So what if Greece and Ireland leave the euro? Their economies are tiny compared to the France-Germany-Benelux core.

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I don't really see what everybody is getting so excited about. So what if Greece and Ireland leave the euro? Their economies are tiny compared to the France-Germany-Benelux core.

It will prove it is possible, which means the first time the euro becomes onerous for anyone involved their populations will demand out.

Marriages don't work long term if she leaves you for the milkman the first time you fall out.

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That's kind of what I was thinking.

Business people I can see being in favour of it due to their ability to avoid paying for tax based infrastructure. Those left with the now increased bill, lower wages, less secure employment and so on might be of a different mind (and crucially for a democracy are going to massively outnumber the business folks.)

Yep, always used to get me steamed up when I'd hear that one of the reasons for joining was that it would be wanted by business.

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Yep, always used to get me steamed up when I'd hear that one of the reasons for joining was that it would be wanted by business.

And if the customer wanted it, then the market would already be providing.

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  • 309 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% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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