Eu Central Bankers Ponder Greece Euro Exit

[The Masked Tulip]

It's get f*ck all to do with bankers

I don't know, when people are jobless, homeless, sick and starving they tend to form mobs, revolt and find a target - I think the banksters m ight suddenly find it not a good thing to stick on their CV when the mob is at the door.

[dances with sheeple]

Here is one view of what might happen and how.

http://www.marketora...ticle34625.html

The advising getting into UK property bit is a bit hard to take seriously? The NS&I/Tesco stuff more realistic? I have an ING account, and he now has me worried. *******! Suppose you can`t have the collapse without the fallout

[zugzwang]

He reckons Spain and Portugal would leave the Euro within 6 months of Greece defaulting for the reasons he outlines. Frankly, if what he reckons will happen happens I reckon Portugal and Spain leaving would be a matter of days not months.

It's Nadeem Walayat, the 'stealth boom' loon. I wouldn't place too much store in his analysis, he's basically a City shill with stock to distribute.

By definition, a monetary union is both a political project and an economic project. The European Union has been a thundering success on both counts, which is why despite the current travails there's a half dozen countries still queuing up to get in (and quite unlike the British Union, whose national constituents can barely stand the sight of each other). Today, the German economy is arguably the most successful in the world. Yet the world was a very different place when the EU was conceived and Europe stood before an invincible military machine facing near-certain annihilation. Who expected the Soviet Union to fall apart in the manner it did? No one. Not a single pundit, politician or military strategist. This aspect of the EU's origins is almost never examined.

Greece has the potential to collapse the euro, no question, and perhaps ultimately the European Union itself, but only if Germany is prepared to stand aside and let it. Despite the prodromic utterances of the Tory press, who seem more interested in confirming their longstanding Atlanticist biases than anything else, at present the Greece 'crisis' is a crisis for Greece alone. They have to default, the alternative is barbaric and has no democratic mandate, but a mechanism (very nearly) exists to let them do so and still remain within the eurozone - a default into the new European Stability Mechanism. The permanent ESM, which comes into effect from July 1st, is too small to cope with both Greece and Spain defaulting as is, but that could be rectified by majority vote. It could then issue bonds mutualising the debt of defaulting governments. That debt would be financed partly through the ECB, partly by those eurozone govts still solvent i.e. Germany - and anybody else who wanted a piece. A debt now backed by the full faith and credit of the ECB and the Bundesbank, of course.

Ultimately it comes down to this: can the German political establishment terrify the German public sufficiently into letting go the inflation reins so that the ECB can print away the eurozone peripheral debt, as the BoE is doing for the UK? Maybe they'll let Greece fail chaotically just to provide a example of what has to be done to avert the same fate befalling Spain.

[Allez_L'OM]

It's Nadeem Walayat, the 'stealth boom' loon. I wouldn't place too much store in his analysis, he's basically a City shill with stock to distribute.

Amen.

This person is a muppet who doesn't appear to be able to see beyond the end of their nose.

[madpenguin]

It's Nadeem Walayat, the 'stealth boom' loon. I wouldn't place too much store in his analysis, he's basically a City shill with stock to distribute.

By definition, a monetary union is both a political project and an economic project. The European Union has been a thundering success on both counts, which is why despite the current travails there's a half dozen countries still queuing up to get in (and quite unlike the British Union, whose national constituents can barely stand the sight of each other). Today, the German economy is arguably the most successful in the world. Yet the world was a very different place when the EU was conceived and Europe stood before an invincible military machine facing near-certain annihilation. Who expected the Soviet Union to fall apart in the manner it did? No one. Not a single pundit, politician or military strategist. This aspect of the EU's origins is almost never examined.

Greece has the potential to collapse the euro, no question, and perhaps ultimately the European Union itself, but only if Germany is prepared to stand aside and let it. Despite the prodromic utterances of the Tory press, who seem more interested in confirming their longstanding Atlanticist biases than anything else, at present the Greece 'crisis' is a crisis for Greece alone. They have to default, the alternative is barbaric and has no democratic mandate, but a mechanism (very nearly) exists to let them do so and still remain within the eurozone - a default into the new European Stability Mechanism. The permanent ESM, which comes into effect from July 1st, is too small to cope with both Greece and Spain defaulting as is, but that could be rectified by majority vote. It could then issue bonds mutualising the debt of defaulting governments. That debt would be financed partly through the ECB, partly by those eurozone govts still solvent i.e. Germany - and anybody else who wanted a piece. A debt now backed by the full faith and credit of the ECB and the Bundesbank, of course.

Ultimately it comes down to this: can the German political establishment terrify the German public sufficiently into letting go the inflation reins so that the ECB can print away the eurozone peripheral debt, as the BoE is doing for the UK? Maybe they'll let Greece fail chaotically just to provide a example of what has to be done to avert the same fate befalling Spain.

+1

Best summation I have seen so far

As with the house price crash we have seen these things don't happen quickly and dramatically but slowly and over time, and in the end boring men in suits shake hands over something to fix or end the crisis in Europe (except in rare cases like Iceland).

The press like Armageddon like crash predictions because it draws in readers and helps to confirm the prejudices of their readership

(One particularly annoying trend with the Telegraph at the moment is their habit of inserting "Europe" in headlines of stories which are substantially about the British economy if there's bad news)

Edited May 13, 2012 by madpenguin

[Sir Harold m]

It's Nadeem Walayat, the 'stealth boom' loon. I wouldn't place too much store in his analysis, he's basically a City shill with stock to distribute.

By definition, a monetary union is both a political project and an economic project. The European Union has been a thundering success on both counts, which is why despite the current travails there's a half dozen countries still queuing up to get in (and quite unlike the British Union, whose national constituents can barely stand the sight of each other). Today, the German economy is arguably the most successful in the world. Yet the world was a very different place when the EU was conceived and Europe stood before an invincible military machine facing near-certain annihilation. Who expected the Soviet Union to fall apart in the manner it did? No one. Not a single pundit, politician or military strategist. This aspect of the EU's origins is almost never examined.

Greece has the potential to collapse the euro, no question, and perhaps ultimately the European Union itself, but only if Germany is prepared to stand aside and let it. Despite the prodromic utterances of the Tory press, who seem more interested in confirming their longstanding Atlanticist biases than anything else, at present the Greece 'crisis' is a crisis for Greece alone. They have to default, the alternative is barbaric and has no democratic mandate, but a mechanism (very nearly) exists to let them do so and still remain within the eurozone - a default into the new European Stability Mechanism. The permanent ESM, which comes into effect from July 1st, is too small to cope with both Greece and Spain defaulting as is, but that could be rectified by majority vote. It could then issue bonds mutualising the debt of defaulting governments. That debt would be financed partly through the ECB, partly by those eurozone govts still solvent i.e. Germany - and anybody else who wanted a piece. A debt now backed by the full faith and credit of the ECB and the Bundesbank, of course.

Ultimately it comes down to this: can the German political establishment terrify the German public sufficiently into letting go the inflation reins so that the ECB can print away the eurozone peripheral debt, as the BoE is doing for the UK? Maybe they'll let Greece fail chaotically just to provide a example of what has to be done to avert the same fate befalling Spain.

You are correct in your conclusion but a bit way off the mark in some points in my opinion.

Firstly, the British union may have its problems and they may be more vocal but it's a different kettle of fish . The uk is a sovereign nation , the eu crats want that but are a million political miles away from even touting it to their people's ( recent french elections saw an anti eu party poll nearly 20 over cent and the French are meant to be the eu flag bearers) ,

The fact that the only solution to the euro issue is to get German backing for bonds shows that after fifty years of trying the eu still hasn't yet been able to persuade its constituents to align as an economic unit.

The other problem not discussed is regardless how strong the German economy is, would its absorption into an eu or euro state destroy Germany also.

It's financial strength would be diluted immensely having to incorporate very large welfare states in France, Italy, Spain etc and it's competitiveness has largely been built on screwing the bejaysus out of southern states like these by lending them money to buy German goods and then sending the bills to the kids of their clients.

I can't see Germany remaining competitive with china , the states or India if it has the largest laziest workforce in the world to fund.

The euro and eu are ******ed, the question for Germans is do they want to join them or take a milder cut in living standards by cutting loose their client states and leaving them to stew .

Is there a single intelligent person alive who thinks that the French miracle economy can survive six months without German largesse?

Whether the French would allow a German secession is another matter and I honestly think thus will influence the Germans as much as anything . The French have food, energy, and guns. The Germans don't.

My guess: a northern euro will emerge and Spain, Italy, Greece, Portugal will be left spinning into the abyss .

Edited May 13, 2012 by Sir Harold m

[JohnLennon]

"By definition, a monetary union is both a political project and an economic project. The European Union has been a thundering success on both counts,"

What fvcking planet do you live on?

.

.

.

.

Edited May 13, 2012 by JohnLennon

[dances with sheeple]

"By definition, a monetary union is both a political project and an economic project. The European Union has been a thundering success on both counts,"

What fvcking planet do you live on?

.

.

.

.

A great success and ego boost for those at the top maybe, but after the credit boom the sheeple might not think so any more? The roots of the union, after the war years , probably didn`t see swathes of sheeple, high on credit, running around buying five cars for their family + holidays etc? Those at the top are going to lose influence, those at the bottom are going to have to cop themselves on to the economic realities IMO.

Edited May 13, 2012 by dances with sheeple

[wonderpup]

It's financial strength would be diluted immensely having to incorporate very large welfare states in France, Italy, Spain etc and it's competitiveness has largely been built on screwing the bejaysus out of southern states like these by lending them money to buy German goods and then sending the bills to the kids of their clients.

Yep- this mini mercantilist strategy is what makes the official German position of moral rectitude pure humbug- by definition not everyone could play this game.

The sublime irony here is that the EUSSR will be taken down by a democratic process it has learned to despise and would- if it had the means- subvert in a heartbeat.

Wether the Greeks are right or wrong to choose the path toward exiting the Euro- that choice is theirs to make- not some EU apparatchik.

[interestrateripoff]

By definition, a monetary union is both a political project and an economic project. The European Union has been a thundering success on both counts, which is why despite the current travails there's a half dozen countries still queuing up to get in (and quite unlike the British Union, whose national constituents can barely stand the sight of each other). Today, the German economy is arguably the most successful in the world. Yet the world was a very different place when the EU was conceived and Europe stood before an invincible military machine facing near-certain annihilation. Who expected the Soviet Union to fall apart in the manner it did? No one. Not a single pundit, politician or military strategist. This aspect of the EU's origins is almost never examined.

Ultimately it comes down to this: can the German political establishment terrify the German public sufficiently into letting go the inflation reins so that the ECB can print away the eurozone peripheral debt, as the BoE is doing for the UK? Maybe they'll let Greece fail chaotically just to provide a example of what has to be done to avert the same fate befalling Spain.

The EU has been a thundering economic success? Really?

How many times have the accounts been signed off in the last 15 years?

And all we need is inflation to rectify all our ills, how many times has it worked in the past?

It failed in France twice in the 1700's and it failed in the Weimar, what makes this time so different?

[Chuffy Chuffnell]

"By definition, a monetary union is both a political project and an economic project. The European Union has been a thundering success on both counts,"

What fvcking planet do you live on?

.

.

.

.

The EU is an economic disaster. The Eurozone even more so. As for political success... yes, for the political elite. Of course the EU (and again, more so the Eurozone) is actually an affront to democracy. We're now moving into stage 2, with countries giving up their governments to the Eurocrats/Germans/banksters... eg Italy.

Not only the institutions themselves, but the member countries. Some here on HPC think we have it bad in the UK... things are MUCH worse in many Eurozone countries. And they have no way out - they gave up their currencies for 10 years of debt-fuelled boom - but now they face the consequences.

I don't think anyone will leave the Eurozone btw - the political elite won't allow it. Will of course make matters worse for the average citizen in the Eurozone, but who cares about them? Certainly not the Eurocrats, let alone their own politicians.

Quite what this continent will look like in 10 years time.. the only country I can see benefiting from the Euro, pre and post crash of '08, is Germany. The rest of the Eurozone is now effectively conquered and will be politically and economically enslaved by the Germans.

Thank heavens (or Hague) we didn't join the Euro!

Edited May 13, 2012 by Chuffy Chuffnell

[MarkG]

I don't think anyone will leave the Eurozone btw - the political elite won't allow it. Will of course make matters worse for the average citizen in the Eurozone, but who cares about them? Certainly not the Eurocrats, let alone their own politicians.

Greece is heading for civil war or maybe just the traditional military coup if they're compelled to stay in the Euro. The only way to keep them and keep them happy would be for the Germans to throw huge amounts of cash their way, which would piss off the German people. Anti-EU parties are on the rise all over Europe.

How is the EU going to survive, unless the boom times come again to paper over the gaps?

Which won't happen while the EU itself is one of the biggest impediments to economic growth in Europe...

[sims]

Greece is heading for civil war or maybe just the traditional military coup if they're compelled to stay in the Euro. The only way to keep them and keep them happy would be for the Germans to throw huge amounts of cash their way, which would piss off the German people. Anti-EU parties are on the rise all over Europe.

Compelled? You do realise that recent polls indicate ~70% of the Greek population are in favour of remaining in the Euro.

[Chuffy Chuffnell]

Compelled? You do realise that recent polls indicate ~70% of the Greek population are in favour of remaining in the Euro.

Indeed.

Having watched Portillo's recent programme about Greece I am as amazed as he is about the Greeks' attitude. Basically they want to remain in the Euro but don't understand what that entails. They just think "but things were really good when we joined, we can have that again". They just don't get it. Perhaps a couple of years of total turmoil may change their minds.

Remember, people around the world are sheep in one way or another. In many European countries people just accept that the European project is 1) good and 2) inevitable. For all the daftness of our own British breed of sheep, they at least are wary of pan-European governance and stuff... the chances of the UK joining the Euro within the next 40 years are now 'nil', down from 'very slight' a few years ago.

Edited May 13, 2012 by Chuffy Chuffnell

[The Masked Tulip]

Indeed.

Having watched Portillo's recent programme about Greece I am as amazed as he is about the Greeks' attitude. Basically they want to remain in the Euro but don't understand what that entails. They just think "but things were really good when we joined, we can have that again". They just don't get it. Perhaps a couple of years of total turmoil may change their minds.

Remember, people around the world are sheep in one way or another. In many European countries people just accept that the European project is 1) good and 2) inevitable. For all the daftness of our own British breed of sheep, they at least are wary of pan-European governance and stuff... the chances of the UK joining the Euro within the next 40 years are now 'nil', down from 'very slight' a few years ago.

Roger Bootle was talking to Jeff Randal last week about this - he said that if you had asked Brits in the 1920s if they should stay on the gold standard then most would have said yes. It is no different for the Greeks today.

He said that they all seem to think that the Euro is the best for them when it clearly isn't.

[MarkG]

Having watched Portillo's recent programme about Greece I am as amazed as he is about the Greeks' attitude. Basically they want to remain in the Euro but don't understand what that entails.

Bingo. They're the Greek equivalent of my friends in the UK who wanted Britain to join the Euro because 'then I wouldn't have to pay commission to exchange money when I go to Europe'.

[The Masked Tulip]

If Greece Exits, Here Is What Happens

http://www.zerohedge.com/news/if-greece-exits-here-what-happens

[The Masked Tulip]

Roger Bootle's take on it.

The big danger for the rest of the eurozone is not that Greece makes a complete horlicks of monetary independence but rather that it makes a comparative success of it. For this to happen, life in the proximity of Syntagma Square does not have to become a cakewalk; it just needs to be better than the current situation of economic collapse without prospect of relief.

Suppose that within a year or so of exit, it looks as though the Greek economy is starting to recover. How then would the governments of Portugal, Spain, Ireland and Italy persuade their electorates that there is no alternative to austerity stretching out until the crack of doom? The game would be up.

http://www.telegraph.co.uk/finance/comment/rogerbootle/9263156/The-final-death-throes-of-the-euro.html

[tonytramcar]

I wonder what would happen if we awoke tomorrow morning to find that Greece had the colonels back in a coup d'etat.

What would the implications be then ?

[The Masked Tulip]

I wonder what would happen if we awoke tomorrow morning to find that Greece had the colonels back in a coup d'etat.

What would the implications be then ?

I am trying to think of a joke but I am sadly unable to think of one.

Edited May 13, 2012 by The Masked Tulip

[interestrateripoff]

Compelled? You do realise that recent polls indicate ~70% of the Greek population are in favour of remaining in the Euro.

I'm not surprised they just keep getting free cash and can buy stuff. You'd have to be an idiot to turn it down. Keep stealing until you are forced to stop.

[interestrateripoff]

I wonder what would happen if we awoke tomorrow morning to find that Greece had the colonels back in a coup d'etat.

What would the implications be then ?

Brown trouser time at the EU. A coup in theory would mean immediate ejection from the Euro and Eurozone, however I'm sure they'd fudge it somehow that it was transitional and Greece shouldn't be ejected.

Which would probably just make things even worse and create even more anti EU sentiment across Europe.

[JohnLennon]

Brown trouser time at the EU. A coup in theory would mean immediate ejection from the Euro and Eurozone, however I'm sure they'd fudge it somehow that it was transitional and Greece shouldn't be ejected.

Which would probably just make things even worse and create even more anti EU sentiment across Europe.

I think the EU would be quite happy if a Euro Army took over to 'create stability' though, and remove the need for any more of those nasty democratic elections

In fact I think they would fvcking love it

[Sir Harold m]

I think the EU would be quite happy if a Euro Army took over to 'create stability' though, and remove the need for any more of those nasty democratic elections

In fact I think they would fvcking love it

Great poster , I just dropped my bacon butty .

[sims]

Great poster , I just dropped my bacon butty .

Have to say though, the guy is clearly a double agent, considering he's got a US Dollar sign on his collar.