Thursday, November 25, 2010

More problems in the Eurozone

Desperate fight to save the euro

The article now introduces Belgium into the fray. Hasn't anyone learned yet that we can't all party while our investments in property rise giving us a chance to pay off our overweight Mastercard debts? Anyone heard of insolvency? Referring to Madrid, Jennifer McKeown,says: "Such concerns are understandable, given Spain's resemblance to Ireland. Public borrowing there surged during the recession after a property-fuelled boom. Its banks are fragile and sky-high unemployment and falling house prices point to a risk of further huge defaults on domestic loans".

Posted by alan @ 10:12 AM (2239 views)
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21 thoughts on “More problems in the Eurozone

  • Don’t blame me, I voted UKIP 🙂

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  • Blame me, I voted for the Libs. 🙁

    Belgium…? WTF? The rudest word in the Universe according to Douglas Adams is “Belgium man, Belgium.”

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  • Just think how lucky we all are that Ireland is not like Greece
    And Portugal is not like Ireland
    And Spain is not like Portugal
    And Belgium is not like Spain
    Otherwise this could get expensive.

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  • That headline is disingenuous. Ireland or Portugal could default on their debts while staying in the Euro. Why do politicians and the media constantly muddle the two?

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  • Drewster, in financial terms, of course they could. A large UK company which owes in GBP could go bankrupt without that affecting the viability of GBP as an international currency.

    However, the Euro is largely a political thing, with some economic advantages and a lot of economic/political disadvantages. The EU/ECB have taken it upon themselves to use European taxpayers’ money to bail out these countries and their banks, as a matter of political pride/posturing as much as anything. It would make the Euro-zone a laughing stock if some countries defaulted.

    It would be the same for the USD if a very large US state like California, or a large US bank (Freddie, Fannie, Citi) defaulted on its IOUs, and we know that these have been and will be bailed out until every last cent of taxpayers’ money has disappeared into a black hole.

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  • 1. mark wadsworth said…”Don’t blame me, I voted UKIP :-)”

    We have little in common, but common sense. UKIP was the smartest vote.

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  • 4. drewster said…’That headline is disingenuous. Ireland or Portugal could default on their debts while staying in the Euro.’

    Default is the only sensible option. The debts are too large, in that they are endless and to some degree fictitious. IMHO.

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  • Drewster,
    What MW says and…There are a lot of emotional links between the member states and the Euro. Angela Merkel is constantly linking the two things. The technical differences may still save the German taxpayers from Spanish stupidity if they unbundle these two things quickly enough.

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  • ‘Would the Greek economy recover more quickly with a new Drachma?’

    In a word, YES. Don’t know what they are waiting for.

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  • Reuters say:
    “No risk of euro zone breakup in Irish crisis – EU”
    http://uk.reuters.com/article/idUKTRE6AO1NY20101125

    Bundesbank’s Axel Weber, a powerful member of the European Central Bank’s governing council, said he was convinced EU leaders would do whatever it takes to repel what he called an “opportunistic attack” on the currency area.

    No worries, then! We all believe him, don’t we?

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  • 11. mark said…it appears someone is reporting all my posts and articles, not sure why? it seems a strange way to treat a blog

    I’ll give it some thought.

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  • it seems it is clear someone on here hates me with a passion..

    well i suppose i had better get a life rather than posting on here then..

    lol

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  • Mark…. its contagious 🙂

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  • A bit OTT when poor lambsy gets reported. Lambs to the slaughter?

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  • 14. mark said…

    it seems it is clear someone on here hates me with a passion..

    well i suppose i had better get a life rather than posting on here then..

    ……does ‘getting a life’ include the ceasation of grizzling to the moderator?

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  • MW,

    I see your point; but I think the politicians are wrong. Which is worse: a slightly awkward one-off default, or years of low growth and continued uncertainty?

    More importantly. why has there been a media black-out on the subject? Every mainstream article talks about “helping” Ireland, or about “bail-outs”. The option of default is rarely discussed; and when it is, it’s only alongside the appalling prospect of leaving the Euro.

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  • Munchy @6……voted for UKIP

    I find that surprising – I take it you don’t paint sunsets, or any other broad horizon?

    i’m disappointed – didn’t anyone point out Mallorca was in the EU?

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  • mark wadsworth says:

    Drewster 21: >”MW… Which is worse: a slightly awkward one-off default, or years of low growth and continued uncertainty?”

    I assume that’s a rhetorical question, but in case it isn’t, I think the former. That’s what I’d be doing, like Iceland, that just let its banks and bondholders (and foreign creditors) go hang. I might be wrong in this, but hey.

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  • tenyearstogetmymoneyback says:

    This may be a stupid idea but what if the whole Eurozone massively devalued its currency.

    This might appear to be bad for Germany, but as they would be selling twice as many Mercedes
    to China (already a major market) all the German workers could have massive pay rises. In fact the
    German Government could go as far saying, we know the currency is going to be devalued but next
    year all benefits such as pensions will go up by an amount corresponding to the devaluation.

    Meanwhile the financial position of the weaker countries wouldn’t be as perilous and all the unsold
    houses in Spain could be offloaded to the Germans for say six months salary each.

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  • Drainweed, we are back to ‘three point perspective’ again. I will vote for the current naughty boys everytime.

    I would paint a rough seascape over a sunset any day, plenty of room for nonesense and happy accidence.

    There lies the natural action & beauty.

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