[the-demi-god]

I listened to tonights news where the boffins have been saying well if the Greece monetry system collapses we might be ok "Governments should not panic" Oh and "We are having a summit in the morning" The "if" is beginning to sound an awful lot like "when" the there is no panic more like We know what to panic about so we'll panic for you.

Most folks are tired of listening to it now but are we really on the countdown and is it only to Greeces departure or will it sound the deathknell for the Euro itself, and what will it do to the rest of us?

[Rasczak]

I don't think Greece will leave the Euro - the country will be propped up come what may. The consequences of Greece leaving are too severe - it would raise the possibility of a Spanish, Irish or even Italian default and critically undermine the Euro. Furthermore most Greek people do not want to leave the Euro.

[Wild Weasel]

This latest crisis summit is the 18th on this matter I believe. Clearly they haven't a clue what to do. Expect more dither, drift and the can will go bouncing down the road a little further.

If the EU regime doesn't cut off their gangrenous extremities soon, the whole body will surely die.

[dc8900]

Originally Posted by Wild Weasel

This latest crisis summit is the 18th on this matter I believe.

It's amazing how many summits they seem to have, it's like there is no real sense of urgency or reality amongst the top political elite of Europe

[Jamezinho]

Germany and the powers that be within the EU will do all they can to keep Greece within the Euro, not for the benefit of the Greek people, but because I believe there is a real fear that a Greek exit will undermine the whole Euro project.

They know that Greece - with a devalued Drachma - will be on the road to recovery much quicker than they would under years of German imposed austerity. Greek exports will be more appealing and it will become a cheap tourist destination once again. Then the likes of Spain and Portugal will consider leaving the Euro too.

The whole Euro vanity project could unravel rather quickly if the Greek economy returns to growth while the rest of the EU is in the doldrums.

[pandemic]

Putting my conspiracy theorist hat on for this post

All this scaremongering benefits one country more than others in the EU, that being Germany. As fears in the Eurozone increase the value of the €uro decreases, which means more export trade business for the Germans. This all (or partially) depends on Greece actually sticking with the Euro and the outlined austerity measure (even if they are made a bit more lax).

Taking off the hat;

If Greece really do leave the Euro in the short term it's going to be really bad for them, in the long term they may succeed. However, the effect will screw up all those nations and banks that have lent them money. If there is a domino effect, that goes as far as affecting the Spanish or worse the Italians. I guess it could be the end of the Euro, which would be bad for us all.

[kav]

The possibility is being taken very very seriously in the financial sector. Contingency plans galore preparing for the day it all falls apart. It's speculated it would happen over a weekend - announcement on a Friday, and the weekend to adjust currency in systems worldwide, and then up and running for the Monday. Theoretically...

[Ed Selley]

Originally Posted by kav

It's speculated it would happen over a weekend - announcement on a Friday, and the weekend to adjust currency in systems worldwide, and then up and running for the Monday. Theoretically...

It has been done before- the Slovaks did it in a weekend.

The problem is that the painful series of events has pretty much shown that Greece and very possibly other countries cannot realistically sustain their place in the Euro. The markets believe that the process is inevitable and at the same time the Euro countries haven't done enough at any stage to calm the fears. An exit won't be good but it is never going to get better so if the next Greek election fails to form a government with a consensus to stay, they should go and be done with it.

I thought that this FT article had a good idea on how to actually get ahead of the markets and the contagion. It is (free) subscription only so I'll break the habit of a lifetime and put the important part here;

Originally Posted by The FT

Allowing the fate of the euro to be driven by a succession of market panics would be the worst possible way of breaking up the single currency. It would involve the loss of billions of euros of public money as the EU burnt through its firewall. The political and economic turmoil that followed would cause public panic and discredit the politicians in charge.

It would be infinitely preferable if EU leaders were to make a rational assessment of which countries are willing and able to stay in the euro – and announce plans to work on an amicable and orderly divorce between the stayers and the goers. Only by acting in this way might they finally achieve their oft-stated goal of “getting ahead of events”. Almost all euro-users adopted the currency without a referendum, and they could leave the same way.

It is true that even a “velvet divorce” for the eurozone would involve enormous dangers. But at least it would offer a believable exit from the present maze. As a (very) German proverb puts it – “Better an end with horror, than a horror without end.”

[CAS FAN]

The Euro was doomed from the start. You can't have countries with such strong economies as Germany and France in the same currency such weak economies as Greece. The standard of living and the price of goods in Greece were just so different to the likes of Germany and France. It's a nice idea but when you have the same currency that governs many things in your economy and you are subject to currency fluctuations etc.outside of your control and influence.

The only way I see the Euro working is with a select band of countries with the economies strong enough to be a member before they are allowed to join. There was too much haste to build the Euro zone IMO and countries like Greece should never have been allowed to join at the level they were at. The only other possibility is really for the whole euro zone to invest in itself, which means the stronger economies pumping money into other countries to bring them to the right level of infrastructure and economic presence. Given the economic problems the world is facing that seems very unlikely.

The actual act of Greece leaving is not the main issue. Sure it will have an effect, but it's more the symbolic effect that's the problem and the issues will really come when Spain and Italy leave!

But hey, this is all doom and gloom. Look on the bright side! Booze cruises are economically viable again

[Wild Weasel]

Yes, to paraphrase Captain Blackadder, there was a tiny flaw in the plan. It was ********.

[Sonic67]

Ladbrookes have stopped taking bets on it.

UK bookmakers suspend betting on a Greek euro exit | Reuters

[Rasczak]

Originally Posted by kav

The possibility is being taken very very seriously in the financial sector. Contingency plans galore preparing for the day it all falls apart. It's speculated it would happen over a weekend - announcement on a Friday, and the weekend to adjust currency in systems worldwide, and then up and running for the Monday. Theoretically...

Well, let's hope not:
Greek euro exit would be disaster for us, says Nick Clegg - Telegraph

[Wild Weasel]

Nick Clegg LOL. Euro-traitors like him don't represent Britain's interests whatsoever.

[icstm]

Parking for the moment whether you think the Euro is a good idea or whether you think it was correctly designed in the first place, the question now is what does it mean for Germany and Greece for either option (in or out) and what would Germany need to conceed for either option.

The path out is possible, the UK left the ERM.
Look at the "crises" in the late 90s, SE Asia, South America, Russia - these are outperforming UK/EU and have done for some time. So defaults and currency devaluations can be a good thing once you take the pain for a couple of years.
However as this has been a slow car crash, there has been pain for the last 2 years with no meaningful adjustments.

The issue economically for Germany is whether it costs more for a Greece default or costs more to essentially create Eurobonds (real ones, or the current govt. bonds but with implicet German backing). Politically the Germans need to understand that they were benifactors in the last 10 years too, and their medicine is in the form of giving back some of the money they got from the rest of the EU buying German products (ie Germany had a trade surplus to the other Euro nations and this got bigger (read worse) with the introduction of the Euro. Most Germans think this was a sign of a successful Germany, but in fact this was a sign of a potential design fault in the Euro.

[dc8900]

^ In the early years of the Eurozone, Germany was known as the sick man of Europe compared with the rest of Europe as it experienced below average growth. Also, wages in Germany had fallen by 35% to make their good more competitive. Coupled with the pain of unification, the Germans have already had a quite nasty medicine to swallow.

[johntheexpat]

. It would involve the loss of billions of euros of public money as the EU burnt through its firewall.

Where would that money go and how can I position myself so that I benefit from some of the 'lost' billions?

[Sonic67]

If we are quoting Europhile Nick Clegg then here’s an alternative view:

Farage: Break up the euro and restore human dignity | News | UKIP MEPs

[Sonic67]

More here too:

BBC Analysis and the possible exit of Greece from the Euro – a very poor programme

A follow up to a BBC programme.

[Rasczak]

Originally Posted by Sonic67

If we are quoting Europhile Nick Clegg then here’s an alternative view:

Farage: Break up the euro and restore human dignity | News | UKIP MEPs

That isn't an alternate view - it is a different point. The message the UK Government has been communicating is that Greece leaving the Euro would be bad news for the UK. The point Farage is making in that post is that it would be better for Greece if they left the Euro, he doesn't mention the benefits for the UK. Quite the contrary in fact, he seems to take delight in the fact that Greece leaving might be the catalyst for Spain and Portugal and 'many other countries' to also leave the Euro. Again he fails to even comment on the devasting effect this may have on our own economy.

The omissions in his statement will be missed on most UKIP voters who will lap up his comments with glee. But even he doesn't deny the crisis that is coming to the UK if the Euro collapses.

[the-demi-god]

Doesn't it feel as if the "slow car crash" has a level of orchestration or control about it. Do we really believe that the IMF who are not usually backward about coming forward are sitting twiddling their thumbs like Nero as Rome burned. I rather thought it felt like a desensitisation job, so that by the time they really do leave there will be less panic because everyone will be so relieved that it is finally over therefore the losses will or should be less. If they had left when they defaulted on the first occasion the markets would have collapsed again.
Now when there is a more than reasonable chance they actually will leave the market flutters for an hour or two and then ignores it. So if they do leave will it modify actual losses or will they just be as bad but we won't care as much because we are tired of it.
In the few reports that you hear from the ordinary Greek people they really seem as if they would be glad to be out, I do not blame them, for most of the ordinary folk going in must seem a big mistake, cost them a lot and they cannot see what they got out of it.



Is it paranoia if they really are out to get you

[Rasczak]

Originally Posted by the-demi-god

In the few reports that you hear from the ordinary Greek people they really seem as if they would be glad to be out, I do not blame them, for most of the ordinary folk going in must seem a big mistake, cost them a lot and they cannot see what they got out of it.

I don't have a link immediately to hand, but I am sure the BBC quoted something like 60% of Greeks wanted to stay in the Euro. It is the austerity measures they do not like or support. As long as someone else pays for them to stay in the Euro, then they are all for it.

[sidicks]

Originally Posted by Rasczak

I don't have a link immediately to hand, but I am sure the BBC quoted something like 60% of Greeks wanted to stay in the Euro. It is the austerity measures they do not like or support. As long as someone else pays for them to stay in the Euro, then they are all for it.

The words 'cake', 'eat' and 'it' spring to mind....

[Sonic67]

Originally Posted by Rasczak

That isn't an alternate view - it is a different point. The message the UK Government has been communicating is that Greece leaving the Euro would be bad news for the UK.

I'm interested in someone other than Nick Clegg making pronouncements or the Government. Nick Clegg is a well known Europhile so not going to give a neutral view. The Government also has bonded us to the EU and wouldn’t give us a referendum. I’d like to see a truly independent opinion on it. I don’t trust UKIP to do that either but saying Nick Clegg says Greece leaving the Euro is a bad thing is like a turkey saying Christmas is bad.

[Rasczak]

Originally Posted by sidicks

The words 'cake', 'eat' and 'it' spring to mind....

Well quite - but if someone else is paying for the cake then can you blame them?

[Osamede]

Originally Posted by Wild Weasel

Nick Clegg LOL. Euro-traitors like him don't represent Britain's interests whatsoever.

Old-school POV. Mostly useful only if one has nostalgia for the days when the entire continent was constantly at war somewhere or another. Time to move on.

Today even the politicians who fool you couldnt care less about Britains interests. They are happy to serve whatever multinational, global bank or filthy rich royals that will line their pockets the best, for the service of delivering them the assent of hordes of blinkered jingoists who have no idea what the game being played is.

[icstm]

Originally Posted by dc8900

^ In the early years of the Eurozone, Germany was known as the sick man of Europe compared with the rest of Europe as it experienced below average growth. Also, wages in Germany had fallen by 35% to make their good more competitive. Coupled with the pain of unification, the Germans have already had a quite nasty medicine to swallow.

thanks for your comments.
You are right that the Germans have had their own internal re-organisation, but this was

1) their choice
2) a great choice as their whole economy can make economic contributions, unlike the UK where London/South East and Scotland contribute and the rest of the country is a "public sector" entity on balance.

So their medicine does not relate to the Euro, what I was pointing out was that the Euro was the medicine that fixed Germany faster than if it was just taking the DMark.

[sidicks]

Originally Posted by icstm

thanks for your comments.
You are right that the Germans have had their own internal re-organisation, but this was

1) their choice
2) a great choice as their whole economy can make economic contributions, unlike the UK where London/South East and Scotland contribute and the rest of the country is a "public sector" entity on balance.

So their medicine does not relate to the Euro, what I was pointing out was that the Euro was the medicine that fixed Germany faster than if it was just taking the DMark.

I thought Scotland was (significantly) subsidised?

[logiciel]

Originally Posted by Osamede

if one has nostalgia for the days when the entire continent was constantly at war

You're one of those who support the theory that the, or a, purpose of the European Economic Community was to stop war?

[SanPedro]

Pretty good article here on why the Euro was a crap idea in the 1st place

Why the euro is doomed to fall apart: it was an incredibly stupid idea in the first place – Telegraph Blogs

No fiscal unity. Simples.
Germany has benefited hugely from an undervalued Euro (compared to the DM) whereas the Euro is hugely overvalued for, well, just about everybody else in the Euro.

It's time for the Eurozone to bite the bullet on fiscal unity... become the same as the USA, where the poorer regions are propped up by the more prosperous regions. This is how a single currency works eu guys... the Germans can't have their sausage and eat it.

All the bailouts are doing is supplying yet more loans to Spain, Ireland, Greece et al, much of which is going straight back the banks and other lenders.

Watching Pestons programme the other night on the Euro... Kohl and Mitterand thought a single currency would unite Europe. And neither were interested in the economics of it all. Nobody stuck to the 'rules' on deficits and suchlike.

Pretty much sums it up really.

[BISHI]

The books of the EC have never balanced, corruption is rife. Germany and France broke their own rules when it suited. The Euro made German exports much more affordable in Europe and the rest of the world and massively increased the value of the German economy. The fact is that the foundations of the pedestal upon which the Euro was put was built on very shaky ground.
The whole EU needed root and branch reform before the Euro was put in place, and even then it should have been a northern preserve that those inefficient, even more corrupt and incapable southern governments should have aspired to after getting their own ***t in order. The Euro does not deserve to succeed IMO and if this mess is not handled properly will result in the fragmentation of Europe insted of its unification. We are best out of it now and in the future.