Greece, Italy...Spain?
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Tani Coyote
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That or the Europe needs to cook their bacon.
...sorry, I had to.
Ahem. We can see now that economic integration, while yielding benefits, also yields a lot of costs. Then again, is that not the nature of society as a whole? We have gone so far beyond hunter-gathering self-sufficiency, but with the price we will all quickly die off if society shuts down, such is our interdependence. This is just applying the same logic to nations rather than to individuals.
That said, it does say that when attempting adoption of a single currency, single market, etc. that more evaluation of the situation might be necessary.
Thorgalaeg
Deity
Well, we already did everything they (the big people) said us to do. Merkozy even said us we were good children. We havent neither high debt nor public deficit, banks are OK supposedly, etc... only high unemployment (nothing new here, in the first half of the 90s it was even worse), however nothing seems enough for the monster.
Also, we are going to change the government even before things get worse, there are anticipated elections next Sunday (i bet current government knows perfectly what will happen and they decided the best was to give the hot potato to the opposition so it sinks completely into total ridiculous in a couple of years
)
Also, we are going to change the government even before things get worse, there are anticipated elections next Sunday (i bet current government knows perfectly what will happen and they decided the best was to give the hot potato to the opposition so it sinks completely into total ridiculous in a couple of years
)
Italy will be fine, I think
So will Spain; although their unemployment numbers are astounding, it hasn't caused a whole lot of trouble recently, and I don't think they'll get as bad as Greece in general (unless of course things were to get even worse in Spain, which I don't think they will)
So will Spain; although their unemployment numbers are astounding, it hasn't caused a whole lot of trouble recently, and I don't think they'll get as bad as Greece in general (unless of course things were to get even worse in Spain, which I don't think they will)
Hey, lay off the Pigs!
Seems to be showing the inherent problem with the single currency: here in the UK we can control our currency to give us some measure of financial stability, while in Spain and the rest it's tied to so many other economies that it's much easier to fall into catastrophe. Maybe not time to abolish the Euro, but certainly a good time to look long and hard at just how a single-currency should be run.
Seems to be showing the inherent problem with the single currency: here in the UK we can control our currency to give us some measure of financial stability, while in Spain and the rest it's tied to so many other economies that it's much easier to fall into catastrophe. Maybe not time to abolish the Euro, but certainly a good time to look long and hard at just how a single-currency should be run.
Tani Coyote
Son of Huehuecoyotl
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I'd suggest between a small, close-knit group of countries, particularly those with similar political and economic climates. There's the rule of diminishing returns, and I think Europe might have passed the threshold already by putting so many countries on the Euro. What is it, ~30 countries? All it takes is one to bring down the rest. Picture how easier it would be if it was just say, France, Germany, and the Benelux. Very stable, very easily adjusted, rather than having to take the opinions of all ~30 into consideration!
A better idea would be political integration, THEN economic integration, because nationalism and regionalism will cripple any attempts to address problems.
A better idea would be political integration, THEN economic integration, because nationalism and regionalism will cripple any attempts to address problems.
Tahuti
Writing Deity
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A single-currency area must be run as a country, at least economically. The Euro might have been a bad idea at the time it was implemented, but it is too late to return without making things worse. So we Eurozoners should perhaps try our best shot in becoming a Federation. I'm certainly not some kind of Europhile ideologist who supports European unity because it sounds so nice but I can't imagine any rational alternative as a solution; Doing nothing will eventually mean the same as "away with the Euro", with all the consequences it'll bring.
onedreamer
Dragon
It isn't a contagion. The whole Europe (and not just it) is already sick from a while, there are just more resilient elements that will show the symptoms later.
If it will end, it won't be thanks to the current political/manager class. They aren't going to change anything. Most of them are rich and with enough money on unknown accounts in unknown banks on some little tropical island. They are probably rubbing their hands and figuring out how to better exploit the coming situation, while at the same time pretending to be so desperate about this "unexpected" illness that they themselves forged. The word most en vogue in Europe nowadays is "Austerity". It means in few words higher taxes for the usual known and less rights and welfare.
They are rubbing their hands and laughing their ass off.
So now that we've all spent 3 years hoping the problems will just go away on their own, and increasingly gotten into the mindset of doing the the wrong thing (austerity) instead of trying to end it, what are the odds of missing a lost decade?
Tahuti
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I doubt an individual EU country could really use government spending as a viable tool fight the recession, since by accepting the Euro, they basically imposed the same kind of microeconomic rules that normally only apply to businesses and families.
Also, not all government spending is good: When government spending is used to pay for the salaries of lazy but politically connected government workers, the results are only more inflation and debts but no increase in growth.
Individual Euro states no. That ship has sailed for most of them. It would have to be a cooperative effort.
As for your second point, the poor quality of many of the governments has certainly been a large part of what has gotten them into this mess. But cutting the fat from those governments without picking up the spending elsewhere isn't going to help anything in the short run.
I don't quite understand why Spain is lumped in with these countries given that it has a debt to GDP ratio lower than Germany's, a budget surplus until the economic crisis hit, a relatively austere welfare system and nothing like the corruption and tax cheating you see in Italy and Greece.
Sure it has problems; the small caja banks are fragile and have a lot of bad loans tied up in the busted consturction/real estate sector; unemploymet, as ever, is high, but overall it seems that it's basically done the economic orthodoxy thing to seemingly no avail.
Sure it has problems; the small caja banks are fragile and have a lot of bad loans tied up in the busted consturction/real estate sector; unemploymet, as ever, is high, but overall it seems that it's basically done the economic orthodoxy thing to seemingly no avail.
You would think so... but the central bankers who demand austerity from all have never let facts stood in the way. They can't really admit that they were wrong, without losing their jobs.
A nice site to track bond yields: http://www.pigbonds.info/
European (except German) bonds really get hammered today. As already said last week when Italy's yields blew through the 7 % ceiling for the first time, the ECB either has to engage in full scale bond purchasing NOW or this whole thing gets torn apart.
European (except German) bonds really get hammered today. As already said last week when Italy's yields blew through the 7 % ceiling for the first time, the ECB either has to engage in full scale bond purchasing NOW or this whole thing gets torn apart.
Winner
Diverse in Unity
You keep saying this all the time.
(BTW, Austria has higher bond yields than the Czech Rep.? Just proves the markets are insane.)
(BTW, Austria has higher bond yields than the Czech Rep.? Just proves the markets are insane.)
Well, Winner, because that's just the way it is. Look at France. The spread of French bonds over German bonds has been climbing relentlessly over the past few weeks. How are you going to keep European countries on life support when even France as one of the main pillars of the European resuce strategy keeps getting sucked into the mess? Certainly not with dubious financial instruments like the EFSF that is entirely dependant on France's AAA and is barely able to sell its own bonds anyway.
Verbose
Deity
No Swedish bonds...
