The Euro is hardly different anymore as the ECB is effectively running a QE programme through the backdoor up to the point that the ECB cannot grant a small country like Greece debt relief without being recapitalised itself. There's something else noteworthy: The ECB's balance sheet is now even bigger than the Fed's. In terms of performance, the Euro is up about 15 % since 2002 - not much for a time span of ten years, certainly not enough to put it in an entirely different category. As a matter of fact, although I think that the US will have to pay a terrible price some time in the future for what they're doing, I'd rather have the USD as my currency than the Euro right now.
Some people like Greece
- Thread starter Kyriakos
- Start date
Ziggy Stardust
Absolutely Sane
Is there any truth in the claim that if countries still had their own currency the crisis would have affected the individual currencies more severely than it did to the Euro?
If the Euro hadn't come into existence, the imbalances betwenn the Eurozone countries wouldn't have appeared in the first place. In all likelihood, currencies like the DM and the Guilder would have kept appreciating and others would have become weaker. Saying the individual currencies would have done worse assumes that monetary, fiscal and wage policy would have been exactly the same in every country as they were over the past decade with the Euro and currency exchange rates would have to be fixed. If the peg was broken after 2007 in such a scenario, then obviously the Drachma or the Lira would have crashed. But then, why would anyone have such a stupid arrangement?
Disgustipated
Deity
Ziggy Stardust
Absolutely Sane
You misunderstood, probably because I phrased it ambiguously because this is not something I know a lot about. The claim was more general than that. Something along the lines of a united currency being more resilient than individual ones in such a crisis.
kochman
Deity
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They can be... but they can also be more problematic, as in the example of the EU, because they have one currency, but no central authority to govern that currency.
Quackers
The Frog
You're not thinking this through. Of course it doesn't cause the country to fall apart, but it could be a cause of part of the problem.
The Olympic Games are Big Business. When Vancouver had the Winter Games, there were a lot of people displaced, and they were rightfully furious. There were instances of "where did the money go?". Construction projects were started, stalled, and got into trouble. They even remade part of a freakin' mountain highway from Vancouver to Whistler to please the IOC! Now I don't live in British Columbia, but I've seen in the newsfeeds how upset and angry the people are who were affected by all this. I'm sure the tourists came and had a wonderful time, and BC will reap some reward of repeat business.
However, this doesn't help the people who got screwed over. And the Olympic Games also creates debt to the host country and city. HUGE. Just ask Montreal. Or any of the host cities that had to pay for all that extra security since 9/11.
All I'm asking is if Greece's problems now were caused in part - IN PART - by the huge expenditure of money they'd have had to pay for the privilege of hosting the Olympics. 'Cause it's not cheap - not for any country.
A quick glance at the figures show me that the cost of the Olympics was 10 Billion Euros. In 2010 the budget deficit in Greece was 24 billion Euros so every year they have to borrow (or take from Germans) an extra 2 and a half olympics (these are all nominal figures aka not including inflation, although it wouldn't make any significant difference). Plus the government debt is 329.5 billion Euros as of 2010. So I wouldn't say the Olympics was even a partial factor in causing the debt crisis.
kochman
Deity
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They have Foxnews in Czech?
Quackers
The Frog
Thats hillarious cutlass
Thats hillarious cutlass
What's funny about it? The US$ is healthier than the Euro. We at least have a central bank doing more or less mostly the right thing.
Quackers
The Frog
Oh not that, I don't know enough to comment on that. Just that Winner takes a different POV and it's instantly a "OMG FOX NEWS WATCHER" 
and he also lives in the Czech republic so it makes even less sense.
and he also lives in the Czech republic so it makes even less sense.
uat2d
ಠ_ಠ
Cala-te, não tens noção do que estás para aí a dizer. O Passos Coelho disse que devemos persistir, esforçar-nos, não sermos piegas e não termos pena dos alunos coitadinhos que sofrem tanto para aprender, mas se tivesse dito que os portugueses são piegas, estaria certo. A Alemanha é que mais tem a perder com isto da Grécia, e tu vez dizer para queimar bandeiras alemãs, é mesmo de quem não sabe ponta dum corno. Pensa antes de falares e não venhas com essas demagogias, pareces um bloquista ou um comuna a falar, como se os maus alemães ricos quisessem explorar os pobres coitadinhos gregos e portugueses, que nunca fizeram nada de mal excepto endividarem-se à toa com o dinheiro que tinham e não tinham. Menos choro, pato, e pensa antes de dizeres barbaridades.
Spoiler translation :
Kyriakos, we get you. We in Portugal are in a difficult situation as well and are rooting for you to succeed, not only because it would be best for everyone if the EU stayed united, not only because your failure or success directly affects our interest rates but also because we were the ones who loaned you the most in terms of GDP %. If you default and don't pay what you owe, we'd also have this harder for us because the money we have there would be gone.
There's no resentment whatsoever, the only thing that I personally dislike is when I see protests there as if people were entitled to borrow money, waste it and then not pay because they're somehow victims. It also happens here, the loud minority whining and complaining because they think we shouldn't have to pay for the waste of our Socialist government (fortunately here nobody burns anything neither breaks anything nor gets in clashes with the police, but we have always been very peaceful so it's kinda just how we are).
Ignore the baseless hate towards you for not doing everything right and on time, ignore those who think your actions are to be praised for their own ideologies and ignore the typical American for thinking it's everything about them (they're already talking about Fox news and the like, let them have their theater if it entertains them), it's all ignorance, not like they matter to you. Just remember that you're not the only ones going through rough times and that no matter what happens, we're both Europeans, we can relate.
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Oerdin
Deity
Yes, but that would have actually have been a good thing. For instance, Greece's drachma would have been heavily devalued but that would have had the effect of making Greek labor cheaper, it's actual debts lower in real terms, it would have inflated away much of the pension and public salary costs, it would have meant Greek goods would have been cheaper abroad (thus increasing exports and employment in export industries), and increased the cost of imports (thus discouraging imports, creating business opportunities for new domestic businesses, and improving the balance of trade for the nation).
Right now Greece is stuck and has no way of lowering it's costs visa-vi the rest of Europe which it badly needs to do because it's costs are the same as western Europe but Greek productivity is about 1/3rd that of western Europe so no one in their right mind wants to hire them. This is all before we talk about Greece's Olympic levels of government over regulation. Possibly the highest in the entire world outside of a few autocratic dictatorships; certainly the highest in a democracy.
innonimatu
the resident Cassandra
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I've said already that my country is a nation of cowards, like Greece...
... and I am a comuna, you <snip>. You know, one of those people who have been warning for decades that selling away and dismantling the portuguese industry was an awful idea. Those people who didn't want us stuck in the EU, and warned that the euro would be another disaster in the making. Who turned out to be right?
Not only am I not crying for myself, I intend to be in a position to be able to laugh all the way to the bank when the crisis is over. I won't be laughing because seeing my countrymen being screwed doesn't exactly make me happy. If if it is their fault also.
And yes, the portuguese went into debt with money they didn't had. Guess who provided it. Guess why it bore interest. If you want to swallow the banker's tale that the evil borrowers are the only ones to blame, suit yourself. You probably one of the borrowers yourself, being masochistic and stupid. And I've also said, it will take a lot of further kicking for the cowards and the fools, not only in Greece but here also, to wake up.
Yes, they're not yet getting it as bad as the Greeks. But just you wait. And this is not about being entitled to anything, it is about it being technically impossible to repay those debts. As any financed and politician with half a brain has already figured out. Now what is being negotiated is how the defaults will be carried out and the horse trading involved, not whether they'll happen. Wise people would be negotiating from that point of view. Fools would keep meekly crawling on their knees and accept whatever demands the creditors decide to put up.
And you know why the fools do that? Because they're in denial. Because defaulting is harder, on the short term, than postponing it some more. In other words, they're doing exactly the same as these borrowers who accumulated the debt in the first place did: taking the easy money. And you're cheering it, even while - quite hypocritically - criticizing the previous (wrong, but EU-induced) borrowing.
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This is interesting. How do you intend to do that?
innonimatu
the resident Cassandra
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I was probably talking too much! But I'll answer: It doesn't involve any financial shenanigans like options or other derivatives. High risk and potentially high-gain, but I don't want to support any such gambling in any way. No, its old plain "buy low, sell high" on real assets. The way things are being handled there will be a lot of stuff on fire-sales within one or two of years. Especially in the context of a forced euro exit, but even if that (miraculously...) doesn't happen. Some are likely to rise again in value quickly afterwards, or at least be mobile, others not. My guesses on that I'm unwilling to discuss. Given these expectations plans becomes simple: keep assets "liquid" but out of the way of the worst economic and political fallout expected (this is the tricky part), wait for it, pick some chosen stuff, wait again, sell at leisure.
I deeply dislike the financial system and the economic rules that brought us to this point, I'm angry that I seem unable to persuade most other people to ditch it in a prepared way to minimize the damage already done (and I've been trying, but everyone around here seems to be in denial, uat2d's views are very representative), but I don't feel any obligation to be taken with the flow and become another one of its victims. I'm not sure I want to actually go through with that plan and gain from the crisis, but I certainly don't intend to lose.
uat2d
ಠ_ಠ
Have you ever even studied that in which you think you have it all figured out? Or is that all fear of the unknown (the investors and the loaners who are out to get you, boo!) put into your head by fools who think we'd be better off isolated and alone, and that the worst part of the 74 revolution was Portugal not turning into a communist dictatorship and that it's perfectly legitimate for us to waste hundreds of millions of loaned money and then say that perhaps we shouldn't pay? Are you really that naive and do you really believe such dogmas, that it would be best to live in a 100% tax rate state in which the state provides for everyone? Have you ever even bothered to pay attention in school, read an Economics book or watch an History program? You really have no idea of what you're talking about.
Oh, and I reported you, it's strictly against the forums rules to insult other members, and while commie doesn't classify as an insult, what you answered with certainly does, and it's very rude indeed. Unfortunately you seem to not even be able to hold a serious discussion without insulting others and I'm sorry you're acting out the way you are.
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A reasonable strategy. I'm more or less trying to do the same, though it seems like we'll have to wait a while longer over here than in Portugal. Based on how prices move in my city, we might even be going through a house price bubble first, at least locally. Forest and land are getting more expansive, stock prices have recovered. I echo your sentiment about the tricky part. To be honest, I haven't yet found a solution that truly satisfies me.
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