Bank Run In Greece

[CrashConnoisseur]

That assumes they would have let us join, even in the "good" years our deficits were always in excess of the limits imposed by the growth and stability pact. I guess we could have always called up Goldman and paid them to barbecue the books.

The UK deficit was comfortably below the 3% 'limit' in every year from 1996 to 2004. Then it edged over at 3.1% before falling back to 2.6% in 2006/07 and 2.7% in 2007/08. In most years the UK was the only major EU economy to meet all the Maastrict criteria. In 2004, for example, both France and Germany had deficits reaching 4.2%.

'Convergence Criteria for Euro':

http://www.economics...e-criteria.html

In practice many European countries were allowed to join the Euro even though they didn't meet the strict convergence criteria. Others such as the UK, met the criteria but decided not to join.

'UK budget deficit breaches Maastricht treaty limits' [February 2004]:

http://www.heraldsco...-limits-1.92244

The UK government has breached the budget deficit limits set out by the Maastricht Treaty for the first time since 1996, official figures showed yesterday. The Office for National Statistics said net borrowings for 2003 were (pounds) 33.9bn compared with (pounds) 15.2bn in 2002. This equates to 3.1% of gross domestic product compared with 1.5% the year before. This is the first time the deficit/GDP ration has exceeded 3%, the reference value in the treaty's protocol for an excessive deficit for seven years, but is much lower than countries like France and Germany, which are running deficits that have hit 4.2% of GDP this year. Jonathan Loynes, at Capital Economics, said: ''I'm not surprised by these figures which are not out of line with the 3.3% figure the chancellor predicted himself for the fiscal year of 2004.'' Despite the budget deficit figures the government's gross consolidated debt at 2003 was (pounds) 438.4bn, equivalent to 39.8% of the gross domestic product, well below 60%-plus figure in the major eurozone economies.

'The Truth About The UK deficit' [February 2011]:

http://extranea.word...the-uk-deficit/

At the time the banking crises began to hit the world in 2007 the level of deficit in the tax year 2007/08, in other words the difference between the tax take and the amount spent by government, was 2.7% of GDP and £38.7 billion. In 2006/07 it was 2.6% of GDP. (ONS, 2008)

[jonb]

The UK deficit was comfortably below the 3% 'limit' in every year from 1996 to 2004. Then it edged over at 3.1% before falling back to 2.6% in 2006/07 and 2.7% in 2007/08. In most years the UK was the only major EU economy to meet all the Maastrict criteria. In 2004, for example, both France and Germany had deficits reaching 4.2%.

'Convergence Criteria for Euro':

http://www.economics...e-criteria.html

'UK budget deficit breaches Maastricht treaty limits' [February 2004]:

http://www.heraldsco...-limits-1.92244

'The Truth About The UK deficit' [February 2011]:

http://extranea.word...the-uk-deficit/

However, bring in the off balance sheet pension and pfi liabilities, and the deficit would look much bigger than it did.

[CrashConnoisseur]

Are people in Greece actually bothered by any of this, or do they just have a beer and sit on the beech in the sun? Actually, that's probably what got them into this mess.

What got them into this mess was joining the euro. It was a barking mad idea from the start.

[CrashConnoisseur]

However, bring in the off balance sheet pension and pfi liabilities, and the deficit would look much bigger than it did.

The deficit is defined as the difference between the tax take and the amount spent by government in a particular tax year. Same for all countries.

[jonb]

The deficit is defined as the difference between the tax take and the amount spent by government in a particular tax year. Same for all countries.

Some other countries have funded pension schemes, and the payments into them count as government expenditure. Most countries pay for their capital items directly, so the full capital cost is government expenditure in year 0, rather than just the regular PFI repayments when they are paid.

[Guest sillybear2]

The UK deficit was comfortably below the 3% 'limit' in every year from 1996 to 2004. Then it edged over at 3.1% before falling back to 2.6% in 2006/07 and 2.7% in 2007/08. In most years the UK was the only major EU economy to meet all the Maastrict criteria. In 2004, for example, both France and Germany had deficits reaching 4.2%.

Things were fine until 2001 because they followed they plans they inherited. From then on UK figures were increasingly cooked using PFI, loads of off balance sheet liabilities were piling up, once you include that (and all the agency debt) the headline figures didn't look so rosy. Especially when all the fair weather taxes and illusory banksterism windfalls dropped away and went into reverse. I guess all ponzi schemes appear magical when everyone seems to be winning and the imminent losers are still blinded by the light.

I agree though, they set out criteria and even the main players proceeded to ignore it, which seems to imply all these new rules are also unworkable in the real world, the politics will always trump finance. The Euro is becoming like the 'The Dissolution of the Austro-Hungarian Empire' Mk II, the IMF wrote a paper on that years ago, how prescient

"This paper investigates the currency reforms undertaken subsequent to the dissolution of the Austro-Hungarian Empire in 1918. The reforms were motivated by the lack of coordination of monetary policy and the absence of a rule for sharing seigniorage. Because the Successor States` reforms were not carried out simultaneously, individuals could choose where to convert their crowns based on where their real value was greatest. The cross-border flows of notes was substantial, to the detriment of Hungary which was last to reform. The Austrian and Hungarian currencies were stabilized only with the help of League of Nations financial programs."

Anyway chaps, the only currency I'm going to deal in from here on out is beer.

As ever we remain doomed, etc, etc.