The death of the Euro

[pap]

Was listening to the Today programme on the return leg of the school run. Today is massive for the Euro. Italy is auctioning bonds on the market in an attempt to shore up its finances, is on or around the magic 7% interest rate ( which prompted the Greek and Irish bailouts ).

 

The last time that a country hit these thresholds, it was bailed out two weeks later. The problem is that Italy is perceived as being too big to bail out, with national debt in the trillions.

 

Last days of Rome, or does it go further? Is this the real beginning of the end for political union in Europe?

[keithd]

Talk in the town about France being next, not sure on the validity of those claims mind you. Listening to R4 last night on way home they were saying they (Italy) are due to borrow something like £340 billion next year just to pay off interest on their loans? Is that right? Lordy bloody hell.

 

I'd say the end is nigh for the Euro Zone. Cant see how it can continue. But then again I am not political or economic genius, I just go on what I hear and read....

[pap]

Aye, it's not looking good for anyone in the Euro. Even the Germans must be kicking themselves after injecting so much cash into something that is ultimately doomed to failure.

 

Spain is apparently the next one approaching 'danger levels'.

[Kingsland Codger]

Is the time now right for the UK to invite Germany to join the pound? ;-)

[Colinjb]

These would be the same countries that have been experiencing excellent economic growth in the last few months. Houses built on sand and all that.

[pap]

Is the time now right for the UK to invite Germany to join the pound? ;-)

 

Weirdly enough, many Germans would prefer to return to the Mark - yet that is something you do not hear a lot about.

[alpine_saint]

How ironic that the EU started with (the Treaty of) Rome and will end in Rome..............

 

I wonder if we are back to European conflicts soon. Only this time, Britain cant shine the solitary beacon of freedom like it did in the past, and military intervention would end worse than Dunkirk.

[Gemmel]

and military intervention would end worse than Dunkirk.

 

Not sure we are quite at that stage alps

[pap]

How ironic that the EU started with (the Treaty of) Rome and will end in Rome..............

 

I wonder if we are back to European conflicts soon. Only this time, Britain cant shine the solitary beacon of freedom like it did in the past, and military intervention would end worse than Dunkirk.

 

There's certainly enough historical enmity to be stoked up. Germans and Polish, Germans and Dutch, French and Germans, Belgium and Germans

 

And that's the half-joking list.

[Sour Mash]

If it wasn't for the fact that this could have seriously detrimental repercussions for our economy, I would be cracking up at this.

 

Having failed at taking over Europe via various wars, France and Germany have failed again after trying the economic route. The southern European countries are finally paying the price for their lazy, public sector heavy, inefficient way of life, I have little sympathy for any of them.

[OldNick]

Politicians determined to keep the European dream on track, who have no idea about monetary issues will always mess up.

It has a remarkable resemblance to Pompey being kept alive by the PL to keep the brands name. Brussels cannot sanction Greece going, as it would harm their image (although the rest of the world know the situation).

In a realistic situation, run by economists not politicians Greece would never have been allowed in until it had sorted out its tax and pensions system. (im told that Greece only has a few citizens registered as millionaires!!!!) a society that like Italy that avoids tax to a mammoth degree.

We are at the precipice and the developed world could fall into a black hole. it is a scary situation and could mean the end of a modern consumer society, and years of strife, even war.

[pedg]

Problem is that at lot of the decisions about what is going to happen to europe are being taken by city traders. Even if governments make sensible moves to get things back on track it only needs one moment of herd mentality from the traders and its all going to go pop anyway. The level of debt for Italy has been known for years and the traders have been happy to charge them the going rate for borrowing more. Now one wiff of panic and the rates rocket up. What should have happened is that the rate for Italy borrowing should have gone up steadily as they got more indebt to give them the incentive to reduce their borrowing but instead they have managed to get in over their heads on cheap money.

[CB Saint]

Politicians determined to keep the European dream on track, who have no idea about monetary issues will always mess up.

It has a remarkable resemblance to Pompey being kept alive by the PL to keep the brands name. Brussels cannot sanction Greece going, as it would harm their image (although the rest of the world know the situation).

In a realistic situation, run by economists not politicians Greece would never have been allowed in until it had sorted out its tax and pensions system. (im told that Greece only has a few citizens registered as millionaires!!!!) a society that like Italy that avoids tax to a mammoth degree.

We are at the precipice and the developed world could fall into a black hole. it is a scary situation and could mean the end of a modern consumer society, and years of strife, even war.

 

One of the big problems they face in the southern european countries is endemic levels of tax evasion. to give some examples

 

Greeece - there is a tax on swimming pools as part of their property tax. Their IRS had 300 on record - when google earthturned up, it was found that there were 15,000 in athens alone.

 

Italy - Forbes magazine estimates that there are 200,000 millionaires in Italy. Their IRS thinks there are 700.

 

Spain - When you sell a house there are two prices. The first , lower price is what you declare to the government and pay stamp duty on, the secong higher real price is what you actually pay. The difference is paid in cash between the buyer and the seller when the lawyer has to leave the room "convienently" to take a phone call.

 

The euro is a basket case and the sooner the eurocrats face up to the fact that the euro cannot survive in its curent format the better.

[hypochondriac]

God I hope so. I really really do.

[HK_Phoey]

Unfortunately one of the problems with democracy at the moment is that politicians that are relying on a popular vote are in charge of fiscal policy. Budgets should be like judiciary and should be independent and not under the control of someone whose position is secured by popular vote

[Gingeletiss]

Ummmmmm! They can always do a 'Poopey', and get the courts to write their debts off!

[Foxstone]

Send for Androniku !!

 

He knows how to balance books...

[Window Cleaner]

One of the big problems they face in the southern european countries is endemic levels of tax evasion. to give some examples

 

Greeece - there is a tax on swimming pools as part of their property tax. Their IRS had 300 on record - when google earthturned up, it was found that there were 15,000 in athens alone.

 

Italy - Forbes magazine estimates that there are 200,000 millionaires in Italy. Their IRS thinks there are 700.

 

Spain - When you sell a house there are two prices. The first , lower price is what you declare to the government and pay stamp duty on, the secong higher real price is what you actually pay. The difference is paid in cash between the buyer and the seller when the lawyer has to leave the room "convienently" to take a phone call.

 

The euro is a basket case and the sooner the eurocrats face up to the fact that the euro cannot survive in its curent format the better.

 

 

Add to this;

France: Within reason you can knock the sum you spend travelling to work every day (they don't even ask at less than 80 kmround trip per day) off of your imposable revenue (gross-NHS deductions which are hefty). You don't have to explain why you have a BMW instead of a 2CV.

 

So if you live 40km from your work because it's nicer or cheaper that means you can take off 80x235x0.500 (depends on fiscal rating of car) =9400 euros,you can then knock off another 235x4 euros for lunches taken outside your home because you have an inalienable right to home comforts or equivalent.

 

So before you start any other deductions (like money given to children for subsistence allowance) you can whip 10K euros or something off your taxable revenue,all this with no questions asked and perfectly legal.If you keep the receipts you can swing a whole lot more, work clothes,books,union adherance all sorts of crap.

Most people don't pay much tax at all but still expect big packets of "aquis sociaux" as an inalienable right.

Edited 10 November, 2011 by Window Cleaner

[alpine_saint]

If it wasn't for the fact that this could have seriously detrimental repercussions for our economy, I would be cracking up at this.

 

Having failed at taking over Europe via various wars, France and Germany have failed again after trying the economic route. The southern European countries are finally paying the price for their lazy, public sector heavy, inefficient way of life, I have little sympathy for any of them.

 

I thought like you until recently, but if the Euro and EU do disintegrate AND skirmishes across Europe kick off, the level of sheer human misery is going to reach a level not seen since WW2, and that only beats this because of the Holocast.

[alpine_saint]

Add to this;

France: Within reason you can knock the sum you spend travelling to work every day (they don't even ask at less than 80 kmround trip per day) off of your imposable revenue (gross-NHS deductions which are hefty). You don't have to explain why you have a BMW instead of a 2CV.

 

So if you live 40km from your work because it's nicer or cheaper that means you can take off 80x235x0.500 (depends on fiscal rating of car) =9400 euros,you can then knock off another 235x4 euros for lunches taken outside your home because you have an inalienable right to home comforts or equivalent.

 

So before you start any other deductions (like money given to children for subsistence allowance) you can whip 10K euros or something off your taxable revenue,all this with no questions asked and perfectly legal.If you keep the receipts you can swing a whole lot more, work clothes,books,union adherance all sorts of crap.

Most people don't pay much tax at all but still expect big packets of "aquis sociaux" as an inalienable right.

 

This sort of tax scheme is not restricted to France, I think you'll find it is more the norm across the Eurozone.

[doddisalegend]

How ironic that the EU started with (the Treaty of) Rome and will end in Rome..............

 

I wonder if we are back to European conflicts soon. Only this time, Britain cant shine the solitary beacon of freedom like it did in the past, and military intervention would end worse than Dunkirk.

 

Is NATO coming to an end?

[1976_Child]

Death of the Euro?

 

God I really do hope so.

 

Maybe then we can come out of the EUSSR completely as well.

[trousers]

[pedg]

 

I do like the missing in fraud section given one of their MEP's was convicted for fraud w.r.t. his expenses.

[CB Saint]

I do like the missing in fraud section given one of their MEP's was convicted for fraud w.r.t. his expenses.

 

He must think he is the most unluckiest person in the EU. Fraud being committed on a grand scale by nation states and he gets his collar felt for a few poxy expenses.

[pedg]

He must think he is the most unluckiest person in the EU. Fraud being committed on a grand scale by nation states and he gets his collar felt for a few poxy expenses.

 

I think if he had not been caught it would have been 180,000 euro's so not exactly poxy.

[BigShadow]

If it wasn't for the fact that this could have seriously detrimental repercussions for our economy, I would be cracking up at this.

 

Having failed at taking over Europe via various wars, France and Germany have failed again after trying the economic route. The southern European countries are finally paying the price for their lazy, public sector heavy, inefficient way of life, I have little sympathy for any of them.

 

The thing is though - it will be UK, Germany and France largely paying the price too! We may get off lightly compared to the other two, but nonetheless there is a lot at stake.

 

Even with my basic grasp of A-level economics - I could see the Euro was doomed to fail from Day One. The real goal is a Federal European State with significant centralised control over taxation and spending. That is the only way this could ever work and the politicians knew it would be almost impossible to get the voters to sign up for it. So, they have spent the last 25 years trying to get there by a series of compromises and backdoor legislation. They didn't learn from the ERM fiasco, and even right now they are desperately scrambling with a series of short term measures to keep the Euro going - but the end game is the same. A federal europe to make it work - or admit defeat and disband the EuroZone.

 

That said, similar to oil price speculators driving oil to unsustainable levels, I can't help feeling the markets are almost pushing the Euro to breaking point in a desire to see it fail. Someone needs to come up with a plan for the Eurozone for the next 10 years - not temporary measures to get Italy/Greece/Portugal/Spain/Ireland through the next 12 months.

[pap]

I do like the missing in fraud section given one of their MEP's was convicted for fraud w.r.t. his expenses.

 

Doubt it was for 45 million, though

 

The only year we got more back than we put in was, funnily enough, the year that Britain had a referendum on the subject

[CB Saint]

I think if he had not been caught it would have been 180,000 euro's so not exactly poxy.

 

Poxy was meant as a figure of speech, however when put up against was is currently going on in the EU, it is.

 

http://www.publicserviceeurope.com/article/1105/eu-accounts-4-6bn-in-fraud-waste-and-irregularities

[Lord Duckhunter]

 

Even with my basic grasp of A-level economics - I could see the Euro was doomed to fail from Day One. The real goal is a Federal European State with significant centralised control over taxation and spending. That is the only way this could ever work and the politicians knew it would be almost impossible to get the voters to sign up for it. So, they have spent the last 25 years trying to get there by a series of compromises and backdoor legislation. They didn't learn from the ERM fiasco, and even right now they are desperately scrambling with a series of short term measures to keep the Euro going - but the end game is the same. A federal europe to make it work - or admit defeat and disband the EuroZone.

.

 

Spot on, I was amazed that anyone could want The UK to join the Euro after the ERM fiasco and particulary what happened to us after we left.

 

The whole project has been about creeping federalism, about going so far inch by inch, but not too far in case the people want a vote.

 

The ironic thing is that the present crisis will have the effect of closer intergration. You have a Tory leader and Chancellor basically calling for more fiscal union and this is what Merkel said yesterday “Because the world is changing so much, we must be prepared to answer the challenges. That will mean more Europe, not less Europe." Yet the EU's answer will be more of what got us into the mess in the first place.

 

That said, we are where we are, and much as I despise the Euro it's break up would have a terrible effect on the recovery in this country. This could have been sorted out months ago( and for a lot less money), but because the EU did not get the consent of their people to enter the Euro, policically, the Northern Eurozone countries have to tread carefully or they will be thrown out of office. The answer is staring them in the face. The Northern Eurozone countries taxpayers (most particulary the Germans) will have to bail out the failed states, and be prepared to finance their debt interest with their own AAA status. It will mean German and French taxpayers paying more debt interest (as they will more than likely lose the AAA) to ensure that Italy pay less debt interest. Had the Germans held a referendum before joining the Euro and these things were spelt out to them, then Merkel would have the political autherity to move in this direction. As it is, it would be political suicide to do so, so we lurch from one crisis to another, pouring millions down a never ending drain.

[OldNick]

Spot on, I was amazed that anyone could want The UK to join the Euro after the ERM fiasco and particulary what happened to us after we left.

 

The whole project has been about creeping federalism, about going so far inch by inch, but not too far in case the people want a vote.

 

The ironic thing is that the present crisis will have the effect of closer intergration. You have a Tory leader and Chancellor basically calling for more fiscal union and this is what Merkel said yesterday “Because the world is changing so much, we must be prepared to answer the challenges. That will mean more Europe, not less Europe." Yet the EU's answer will be more of what got us into the mess in the first place.

 

That said, we are where we are, and much as I despise the Euro it's break up would have a terrible effect on the recovery in this country. This could have been sorted out months ago( and for a lot less money), but because the EU did not get the consent of their people to enter the Euro, policically, the Northern Eurozone countries have to tread carefully or they will be thrown out of office. The answer is staring them in the face. The Northern Eurozone countries taxpayers (most particulary the Germans) will have to bail out the failed states, and be prepared to finance their debt interest with their own AAA status. It will mean German and French taxpayers paying more debt interest (as they will more than likely lose the AAA) to ensure that Italy pay less debt interest. Had the Germans held a referendum before joining the Euro and these things were spelt out to them, then Merkel would have the political autherity to move in this direction. As it is, it would be political suicide to do so, so we lurch from one crisis to another, pouring millions down a never ending drain.

I wonder f the the worlds money men are slowly sniping each and every country. There must be big bucks to be made, the sad thing is if they push a little bit too far they lose everything as well as us

[pedg]

I think those on here revelling in the 'death' of the Euro are perhaps doing so a bit prematurely? This probably marks the point at which the countries adopting the euro stops growing and probably shrinks a bit (i.e. Greece) but it does not mean that the central european countries are going to give up the Euro in the near future.

[pap]

I wonder f the the worlds money men are slowly sniping each and every country. There must be big bucks to be made, the sad thing is if they push a little bit too far they lose everything as well as us

 

Indeed. How long before enough people start asking "why are we still sticking with this money lark when it hasn't served us very well".

 

The problem is unbridled greed, and the reality that capitalism isn't just a means of re-distributing wealth; it's economic warfare. The problem is, absent some genius that allows you to make it "big" ( and big is relative to us, not them ), the money men have had the best weapons for centuries.

 

Some people made a lot of money out of the Great Depression. The same sort of people will make even more money out of this. Sure, they may have to put a few trillion in ( which they can invent from nothing ) but they'll get it back in spades, with us footing the bill.

[Saintandy666]

I don't know why a lot of you are wishing for the end of the Euro. It would be us completely ****ed too. The euro can and will work, they just need to set it up properly this time rather than fast tracking parts of it.

 

If the Euro collapsed, the UK would be completely screwed. All(largest amount) our trade is with Europe.

[CB Saint]

I don't know why a lot of you are wishing for the end of the Euro. It would be us completely ****ed too. The euro can and will work, they just need to set it up properly this time rather than fast tracking parts of it.

 

If the Euro collapsed, the UK would be completely screwed. All(largest amount) our trade is with Europe.

 

The only way to get the euro to work is complete fiscal integration with central taxes and bonds. Unfortunately that is not palatable to a great many residents of the euro area which is why it wasn't set up like that in the first place. The euro was a political fudge and this is now coming home to roost.

 

I would like nothing better than the euro to work out. that way the world might return to normal, but it is fundamentally flawed . I want the next best thing which is a managed removal from the euro of some of the more unstable nations. The longer the politicians dither the worst the medicine will taste when the euro finaaly implodes.

[View From The Top]

As predicted by many, the Euro will end up as a Northern European currency and become very, very strong in doing so.

[hypochondriac]

I don't know why a lot of you are wishing for the end of the Euro. It would be us completely ****ed too. The euro can and will work, they just need to set it up properly this time rather than fast tracking parts of it.

 

If the Euro collapsed, the UK would be completely screwed. All(largest amount) our trade is with Europe.

 

Short term pain for long term gain I'm afraid.

[hypochondriac]

The only way to get the euro to work is complete fiscal integration with central taxes and bonds. Unfortunately that is not palatable to a great many residents of the euro area which is why it wasn't set up like that in the first place. The euro was a political fudge and this is now coming home to roost.

 

I would like nothing better than the euro to work out. that way the world might return to normal, but it is fundamentally flawed . I want the next best thing which is a managed removal from the euro of some of the more unstable nations. The longer the politicians dither the worst the medicine will taste when the euro finaaly implodes.

 

Brilliant post. The Euro is flawed and countries should stay politically separate.

[dubai_phil]

The Euro was a great concept.

 

Then Politicians and National Ego's got involved.

 

As such Countries were allowed to join at the wrong Exchange Rates

 

Then those Countries ignored the basics of the rules.

 

Many people pointed this out but were branded as idiots or Eurosceptics. William Hague was probably the most accurate in calling it but he was another dumbf\/ck Tory who wasn't toeing the let's do it line.

 

It was a great invention of Jacques Delors - and the French. However it has been Germany who has MOST benefitted from having an artifically low Exchange Rate as everyone bought German cars & technology at affordable prices.

 

Now the cows are coming home to roost in the Rhubarb Trees. Everyone knows what that really means but nobody wants to explain it.

 

My ONLY question in all of this sadly predictable mess is this.

 

Why is it that the SAME people who told us that the Euro was a fantastic thing are now the people telling us that the world will be doomed without it?

 

The Euro IS unsustainable in it's current framework and form. The German people (rightly) do not want to pay for Greeks to retire at 57 and avoid their taxes. The PAIN of the collapse will be horrific, BUT if it is managed it will be short lived and EVERYONE can grow again and Democracy COULD regain a foothold in Europe.

 

Or they can muddle on.

 

Ambrose Prichard-Evans nailed it in an article 4 years ago in the Torygraph. he's been right ever since then. The Euro is dead, sort it out and get a new one FAST and everyone can move on and take short term pain.

 

The longer the mess lasts the longer the pain will be when it fails.

[Saintandy666]

Short term pain for long term gain I'm afraid.

 

If the eurozone goes bust... it won't be 'short term pain', it'll be long term economic catastrophe that could take 10 years plus to recover from... at least.

[ART]

Someone somewhere is making one hell of a lot of money out of this euro chaos. You're not going to tell me the odd couple of corrupt speculators were the only ones at it. They were just the tip of the iceberg. You don't hear the Russians or Chinese complaining these days. This all goes way beyond our wildest imagination.

[Saintandy666]

Someone somewhere is making one hell of a lot of money out of this euro chaos. You're not going to tell me the odd couple of corrupt speculators were the only ones at it. They were just the tip of the iceberg. You don't hear the Russians or Chinese complaining these days. This all goes way beyond our wildest imagination.

 

It's hardly in China's interests for us to go bust... if we can't buy their goods, they'll go down as well as their internal market isn't big enough to support themselves. Maybe it's in their interests for them to loan us money as some point though. Through financial might will come policy influence.

[hypochondriac]

If the eurozone goes bust... it won't be 'short term pain', it'll be long term economic catastrophe that could take 10 years plus to recover from... at least.

 

Yep. It's going to happen at some point without political union. Ten years is nothing in currency terms. Getting rid of the Euro in the form it is is inevitable so better it happens sooner rather than later.

[Saintandy666]

Yep. It's going to happen at some point without political union. Ten years is nothing in currency terms. Getting rid of the Euro in the form it is is inevitable so better it happens sooner rather than later.

 

It won't be good for most people at all(For example, in my case my Dad works for an Italian company. If the Eurozone goes kaput, I'm more than a little bit worried about that. My dad is 50... so 10 years is a long time). The jobs will go and there won't be anymore because there won't be any money. It's start a circle of decline.

[scotty]

If the eurozone goes bust... it won't be 'short term pain', it'll be long term economic catastrophe that could take 10 years plus to recover from... at least.

 

The eurozone wont "go bust". The finance is still there, its just a question of who has the money and in what form. Remember the Lamont speech the day before we baled out of the ERM? "The ERM is at the core of our economic policy, and we will take whatever measures are necessary to stay in it......" Next day we're out of it and back to a floating pound, and thats exactly when our economy started to pick up. The eurozone is the same problem on a european scale, once Greece, Italy, probably Spain and possibly Ireland are out of it they will start seeing decent growth and the general economy will improve. The Germans and French wont have this idiotic self-inflicted millstone round their necks anymore so they will start growing as well. Merkel and sarko have already admitted as much when they started talking about Greece having to leave the euro, six weeks ago there was "no exit mechanism....."

[Saintandy666]

The eurozone wont "go bust". The finance is still there, its just a question of who has the money and in what form. Remember the Lamont speech the day before we baled out of the ERM? "The ERM is at the core of our economic policy, and we will take whatever measures are necessary to stay in it......" Next day we're out of it and back to a floating pound, and thats exactly when our economy started to pick up. The eurozone is the same problem on a european scale, once Greece, Italy, probably Spain and possibly Ireland are out of it they will start seeing decent growth and the general economy will improve. The Germans and French wont have this idiotic self-inflicted millstone round their necks anymore so they will start growing as well. Merkel and sarko have already admitted as much when they started talking about Greece having to leave the euro, six weeks ago there was "no exit mechanism....."

 

A northern Euro is an interesting concept.

 

So I put this to people... if the the Euro had the so called 'desirable countries' in it, i.e your northern countries like France and Germany and not Greece and so on, would people be more interested? It'd only make the Euro more attractive 20 years down the line.

[hypochondriac]

It won't be good for most people at all(For example, in my case my Dad works for an Italian company. If the Eurozone goes kaput, I'm more than a little bit worried about that. My dad is 50... so 10 years is a long time). The jobs will go and there won't be anymore because there won't be any money. It's start a circle of decline.

 

It's a long time for you personally but not long at all in terms of society. The sooner the Euro project is scrapped, the sooner we can get back on track and money will be save long term.

[hypochondriac]

A northern Euro is an interesting concept.

 

So I put this to people... if the the Euro had the so called 'desirable countries' in it, i.e your northern countries like France and Germany and not Greece and so on, would people be more interested? It'd only make the Euro more attractive 20 years down the line.

 

No. The Euro will only work with political union. Political Union should never ever happen so I oppose anything that brings political union closer.

[scotty]

A northern Euro is an interesting concept.

 

So I put this to people... if the the Euro had the so called 'desirable countries' in it, i.e your northern countries like France and Germany and not Greece and so on, would people be more interested? It'd only make the Euro more attractive 20 years down the line.

 

The only direct experience we've had was the ERM, and that was an unmitigated disaster. If the weaker economic countries left the euro it would keep it trucking on for a while longer, but imho that would just be delaying the inevitable, unless France and Germany actually decided to form a separate country with a single government and pick who to invite into it. I dont see how else it could work.

[hypochondriac]

The only direct experience we've had was the ERM, and that was an unmitigated disaster. If the weaker economic countries left the euro it would keep it trucking on for a while longer, but imho that would just be delaying the inevitable, unless France and Germany actually decided to form a separate country with a single government and pick who to invite into it. I dont see how else it could work.

 

This is the right answer.