Saturday, May 8, 2010

Just when we had enough trouble of our own article 122 is to be used to bailout Greece

British taxpayers ordered to bail out euro

Looks like we will be on the hook for 10% of any Greek default with Spain, Portugal and others waiting in the wings irrespective of our own position. Read, analyse and comment as it looks like we will be stitched up by article 122 whether we like it or not!

Posted by enuii @ 11:29 PM (2197 views)
Please complete the required fields.



16 thoughts on “Just when we had enough trouble of our own article 122 is to be used to bailout Greece

  • Lovely!!! What next?? We will end up bailing out Greece, Spain, Portugal, Ireland and everyone else who decides to borrow over their head.

    I really wonder who will be left to bail us out !!!!!!!!

    WWIIII anyone?

    Reply
    Please complete the required fields.



  • Seeing as Britain will be going cap in hand next, it seems like rather a good deal.

    Reply
    Please complete the required fields.



  • mark wadsworth says:

    1. This is not news. This is what we signed up to with the Lisbon Treaty (and the provisions were already included in the treaty before that).

    2. Even if there were no EU, our ‘commercial’ banks have merrily lent the Greeks, Spain, Portugal, self-certified UK borrowers, US mortgage repackagers etc stupendous amounts of money, and our government being as stupid/timid/corrupt* (*delete according to taste) as it is, our government will bail out the banks anyway, thus indirectly bailing out Greece and other reckless borrowers.

    3. Banks in countries outside the EU (i.e. Switzerland) are just as deeply in the doo-doo, and taxpayers in Switzerland are being forced to bail out their banks.

    Reply
    Please complete the required fields.



  • It’s quite ironic
    1) That the pound is weak against the Euro so we will pay more
    2) That despite there being 27 votes we end up with 10% of the burden- so no proportional representation there!!

    Reply
    Please complete the required fields.



  • mick rupert says:

    @Mark W

    Cool, so we can rely on them when it’s our turn in the doo-doo?

    [n.b. not a facetious question, I genuinely do not know. Cheers.]

    Reply
    Please complete the required fields.



  • as we now live in a world where booms are uncontained and busts are all bailed out, is safe to assume the only way out of this western world bail-out culture is high inflation.

    Thus, nominal house prices will never fall. Only real house prices will fall, which doesn’t help people like me with a prudently saved deposit, who are sitting here wondering why buying my young family their first house feels like sitting at the casino wheel with my life savings, trying to decide between red and black.

    Two houses we looked at 6 months ago, which sold, are back on the market again. One for 8% more, the other 15% more. Is it time to admit that this this mess is just too big for it to swing in favour of the contrarian this time and that we should just buy up large and fix at a 5 year rate?

    Reply
    Please complete the required fields.



  • mark wadsworth says:

    @ Mick Rupert, the key is the wording of s122: “[if] a member state is in difficulties or is seriously threatened with severe difficulties caused by natural disasters or exceptional occurrences beyond its control, the council, on a proposal from the commission, may grant, under certain conditions, union financial assistance.”

    So ‘the council’ has to declare that what happened to Greece is “beyond its control” but that what has happened to us is entirely down to our own stupidity. To be fair, I don’t anybody to bail out the UK, I want the government to get spending down so that we don’t have a deficit.

    @ Sir M, I say no, sit tight (and I am in the same position as you). If I am wrong I am wrong. Those two haven’t sold yet, have they?

    Reply
    Please complete the required fields.



  • @5, mark wadworth
    Mark you have harderned up quite a bit that we should sit tight. I understand your sentiment. The question I have always asked as feared br Sir M is inflation. As long as inflation is controlled at around 4% then I do not think we have much to fear but if the inflation satrts to go beyond that and no corrective measures to control it then we could have a problem. But the property prices in my opinion will not go up as the wages will not able to go up as the private sectors employers will not be able to afford it. The problem however is the public sector where they almost are guaranteed a pay rise every year. They could be in the region of 2% to 3% but over a period of 5 years can be in the region of 12% to 18% which could keep the prices up. So what really is going to happen to property market is in the laps of god but if the money markets start showing no confidence in British bonds and it ends similar to Portugal, Spain or Ireland then things coul become interesting.

    Reply
    Please complete the required fields.



  • house – if that is your greatest fear, buy some gold and relax.

    Reply
    Please complete the required fields.



  • @7 in breda
    I am considering it but is it really inflation proof. The $64k question is will the Western Governments will allow inflation to rip. I do not think so. What do you think ?

    Reply
    Please complete the required fields.



  • 8. house

    Currencies are being devalued. That’s a better way of looking at this. How much longer can you afford to wait.

    Reply
    Please complete the required fields.



  • Personally I inflation-proofed myself by taking a job in the public sector. Nice work if you can get it but you do actually have to be good enough to be taking a pay cut to get a look-in.

    From the fiscal and monetary perspective, I can’t think of anything the UK has done right in the last five years, so logic dictates it should only be a matter of time before we are shown the red card by the markets.

    Reply
    Please complete the required fields.



  • mark wadsworth says:

    @ House, as far as inflation is concerned, there is a golden rule that you only have really high (monetary) inflation if there are also currency controls. I say ‘monetary’ inflation as opposed to imported inflation, i.e. if GBP sinks, then all things being equal, we would expect imported goods and commodities to become more expensive (and yes, GBP fell quite a lot a year or two ago, and this is feeding through into higher import prices, fair enough – but all things being equal this is bad for house prices as people’s surplus income goes down).

    The funny thing, it makes little difference whether a country is trying to prop up its own currency, devalue its own currency, whether it has official buying and selling rates or limits on the amount you can buy or sell for specific purposes – all of these seem to lead to inflation.

    As the Japanese experiment with money printing over the last ten or twenty years showed, if you print like mad but allow people to buy and sell, borrow and invest in that currency quite freely, this will not lead to inflation (they had deflation, as it happened). Even more bizarrely, once the carry trade bubble popped, JPY is back to more or less where it was before they started money printing aka QE.

    Reply
    Please complete the required fields.



  • Looks like Darling is putting his foot down:

    AFP: Britain cannot support EU stability fund: Darling

    LONDON — Chancellor of the Exchequer Alistair Darling said Sunday that Britain cannot and will not support a European Union bailout fund to help struggling eurozone economies.

    “I’m very, very clear that if there’s a proposal to create a stability fund for the euro, that’s got to be a matter for the eurogroup countries,” he told Sky News television in Brussels, where he was attending an EU meeting.

    “What we will not do and what we can’t do is provide support for the euro… the responsibility for supporting the euro must be for the eurogroup members”.

    Darling added: “I think it’s important that we do everything we can to stabilise the markets to show we’re coming through what is a difficult period”.

    Talks are to take place on an EU bailout fund worth some 60 billion euros (76 billion dollars) to help indebted euro nations in the wake of the Greek financial crisis.

    Copyright © 2010 AFP. All rights reserved.

    Reply
    Please complete the required fields.



  • markj69 str05 says:

    Looks like Darling has grown a ‘pair’!

    Good to see something decisive coming from our political arena. Even if de does work for a bigot.

    Reply
    Please complete the required fields.



  • 11. drewster said…’Looks like Darling is putting his foot down:’

    That’s the headline – but we still have to bail out the Euro via the IMF if that becomes necessary. Potential cost to the UK is beween £8billion and £15billion (depending on which publication you read). Darling kept that one quiet.

    Reply
    Please complete the required fields.



Add a comment

  • Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
  • Please note that any viewpoints published here as comments are user´s views and not the views of HousePriceCrash.co.uk.
  • Please adhere to the Guidelines

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes:

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>