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On March 21 2013 07:28 fleeze wrote:Show nested quote +On March 21 2013 07:25 ACrow wrote:On March 21 2013 06:54 MyNameIsAlex wrote:On March 21 2013 06:48 ACrow wrote:On March 21 2013 06:21 MyNameIsAlex wrote:people are quick to attack the south, believin everything they see in TV, and acting with ignorance of how the markets work. Ok guys Germany wants a strong Euro. Whatever you say. /Laughs On March 21 2013 06:20 Yuljan wrote:On March 21 2013 04:21 fleeze wrote:On March 21 2013 03:23 Rassy wrote:
Yes a weak euro boost germans exports but germany dont need a weak euro, the german economy can cope verry well with a euro at 1.80 and still have a trade surplus! (according to a study wich i now unfortnatly cant find on the web).
The result of a weak euro is that germany have to trade 2 bmw,s for say 1k barrels of oil, while they could be trading 1 bmw for 1k barrels of oil. Having a weak currency is like a shop having a sale and selling things below cost price.You are able to sell but the indirect costs are verry high.
In the long run it is abolutely killing for the wealth in your country. you're logic is wrong. we export much more cars then we import oil. and it is never killing wealth in your country to devalue, you're only losing wealth COMPARED TO OTHER COUNTRIES. if you don't need their goods, you lose nothing at all AND you can export better because your products are cheaper in foreign markets. just look at iceland. germany is really interested in a weak euro, we just don't say it loud because USA and Japan wouldn't be pleased. good thing there's all those southern countries keeping our currency low. i'd guess the DM would skyrocket to something like 1.5 - 2 € immediately thus doubling costs for german goods in other countries. and we would lose a big shared market since we don't give our own population enough money to buy our own manfactured goods. so germany would be in quite some trouble. http://www.rieti.go.jp/jp/publications/dp/12e081.pdf+ Show Spoiler +
4. Conclusion14
Germany is now the world’s second largest exporter. Its exports have soared since it
joined the common currency in 1999. This paper seeks to understand the relationship between
Germany’s exports and its exchange rate.
The results indicate that there is a long run equilibrium relationship between Germany’s
aggregate exports, its real exchange rate, and income in importing countries. In every
specification the evidence implies that an appreciation of the German reer would reduce exports.
The results using the unit labor cost-deflated reer are precisely and robustly estimated and
indicate that a 10 percent appreciation would reduce exports by 6 percent. German exports are
also sensitive to income in the rest of the world.
Results using a panel data set indicate that consumption exports are much more sensitive
than capital goods exports are to exchange rate changes. German capital goods exports tend to
be high quality goods that compete more on quality than on price. Thus the fact that the price
elasticity is small is not surprising. The findings also indicate that German exports to the
eurozone are much more price elastic than German exports outside the eurozone.
Since Germany experienced a large internal devaluation against other eurozone countries
after 2000, one would expect exports from Germany to the eurozone to have increased. Figure 2
shows that there was indeed a surge in exports to the eurozone. This in turn contributed to the
huge eurozone imbalances that are evident in Figure 3.
Viewed from the perspective of capital flows, eurozone imbalances developed partly
because German banks became more willing to invest in peripheral eurozone countries after the
countries joined the common currency (see Gros and Mayer, 2012). However, following the
eurozone crisis, German banks and savers have become less willing to invest in Greece, Spain, 15
Portugal, Italy, and other deficit countries. Current account imbalances between European
countries may thus prove unsustainable.
In a flexible exchange rate system, part of the resulting adjustment would come through a
nominal appreciation of the German currency relative to the currencies of the deficit countries.
This is precluded as long as these countries share a common currency. Exchange rate adjustment
must come instead through a decline in wages and prices or an increase in productivity in the
peripheral countries vis-à-vis Germany. The evidence presented here indicates that these
adjustments will have to be large. Restoring equilibrium in the eurozone is thus likely to be a
long and painful process.
Sure a high exchange rate isn't perfect for us but keep in mind that the southern states are pushing for printing more money and devaluing their debts not Germany. Germany devalues the Euro with keeping th Eurozone crisis stale. The Cyprus crisis is stale for the last 2 months, and the proposed measures were a joke. I think everyone agrees on this. If not, then how about a global bank run since your deposits are in not secured anymore (hey it happened to Cyprus, and it can happen on (Spain, Portugal, Italy, maybe France)? The domino will destroy most banks. Germany had a big say on them too. How they didn't devalue the Euro with this? The same with every Eurogroup and the European Crisis in general. On March 21 2013 03:13 Yuljan wrote:On March 21 2013 03:02 MyNameIsAlex wrote:On March 21 2013 00:14 electronic voyeur wrote:
the Euro is taking is devastating toll Germany is happy about that. Euro going down, USD/EUR going up, more exports for them. Also now all the south is afraid of having money in their banks, they will move them to germany/swiss banks since their considered as the safest banks in Europe (which isn't true according to many analysts). They win twice short term.In the long run this will bite their ass. And people like this guy are the reason why we need a northern union instead of a european union. People like you should really get some education before opening their big loud mouth and parotting the propaganda. Maybe you shouldn't believe everything you see on Greek TV and be so quick to attack Germany? Just try to view this from a German's perspective (that's called empathy): Germany pays billions over billions of tax money - money that I worked very hard for - and as thanks Germany gets called Nazis and on every demonstration there are anti-German chants and/or signs. Now I get that the bailouts are used to bailout banks (some of them even German) and not help the small people while at the same time they are asking a lot of neoliberal crap. I'm against that. I know it doesn't really help. I didn't vote for that. Yet, I don't think it's fair to ask for so much and at the same time insult the hand that's feeding you. You should be angry at the incompetent politicians you voted into office the last decade, because those are the ones that failed. We all should be angry at a EU construct that is unable to deal with this, because it lacks the means to properly deal with it. And I don't get how anyone can be against letting stakeholders of Cyprus banks pay their share, as long as only the ones holding more than 100k € are affected (the decision to give a haircut to the ones below 100k was a decision by Cyprus government btw, the Troika just demanded a sum of 5.8bn from the haircut, not how it is distributed). Cyprus government tried to protect their foreign customers coming to Cyprus banks to enjoy low tax rates (which is quite parasitic in nature btw). Be angry at them, not at the Troika. 1st) You guys are feeding me? Really? No thanks, Im a phD engineer and I can feed myself. 2nd) Did I insult anyone? Did I call anyone a Nazi? Did I attack anyone? Im talkign with facts here, Germany wants a weak Euro as it helps with exports. Long term it bites them in the ass since Europe is bleeding and in the foreseeable future the market where Germany exports won't be able to "buy" anymore and German economy will take many steps back. It's only logical this will happen. Jeesus you can't take criticism and think for a moment. Also the tax on Cyprus banks can spark a bankrun in the south. Do you know the consequences of such a huge bankrun? Deposits should not in any way be touched. Not in Cyprus, not in anywhere in EU. edit: ACrow its not stakeholders, its DEPOSITS. 1) not feeding you specifically, but keeping the Greek state liquid. I do not doubt that you can take care for yourself perfectly fine and didn't mean to insult you personally at all - sorry if you got that impression! 2) again, not you specifically; I rather wanted to present a different standpoint from yours, as you were attacking a rather broad, unspecific northern standpoint as well. There is always two sides to a coin, that's my whole point, really. Btw, the argument that Germany is dependant on southern Europe is not a really convincing one. Sure, they are buying and have been buying, but this cannot work when you don't produce value in return. Right now, all this accrued export surplus does, is increase the Target2 saldo between German and Greek national banks. If Greece cannot pay this Target 2 saldo, it's just more debt. Customers of a bank are stakeholders. You entrust the bank with your money, and only a part of this money is insured by the bank (up to a certain amount, the state may have a law to protect part of this money). Anything above this amount is considered as bankrupt estate in case the bank goes bankrupt. So yes, a bank's customers are stakeholders too. "So yes, a bank's customers are stakeholders too" this statement is so retarded, i don't even.... ok. just for you. bank deposits were 100% secure in europe... up until last weekend....
no they are not. ACrow is right, they are just insured up to a certain amount, depending from Bank to Bank. No offence but it comes across as you have no clue what you are talking about, like the less clue the stronger the opinion, just saying.
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On March 21 2013 04:21 fleeze wrote:Show nested quote +On March 21 2013 03:23 Rassy wrote:
Yes a weak euro boost germans exports but germany dont need a weak euro, the german economy can cope verry well with a euro at 1.80 and still have a trade surplus! (according to a study wich i now unfortnatly cant find on the web).
The result of a weak euro is that germany have to trade 2 bmw,s for say 1k barrels of oil, while they could be trading 1 bmw for 1k barrels of oil. Having a weak currency is like a shop having a sale and selling things below cost price.You are able to sell but the indirect costs are verry high.
In the long run it is abolutely killing for the wealth in your country. you're logic is wrong. we export much more cars then we import oil. and it is never killing wealth in your country to devalue, you're only losing wealth COMPARED TO OTHER COUNTRIES. if you don't need their goods, you lose nothing at all AND you can export better because your products are cheaper in foreign markets. just look at iceland. germany is really interested in a weak euro, we just don't say it loud because USA and Japan wouldn't be pleased. good thing there's all those southern countries keeping our currency low. i'd guess the DM would skyrocket to something like 1.5 - 2 € immediately thus doubling costs for german goods in other countries. and we would lose a big shared market since we don't give our own population enough money to buy our own manfactured goods. so germany would be in quite some trouble.
No my logic is not wrong, and i think you dont understand the situation and the economy.
Germany exports more then they import on oil, it was just an example to make a point (the trading against an unfavourable rate) Germany imports manny more goods then oil and the german economy is far from selfsuficient.
A weak currency will rise the cost of imports, and with that also the cost to produce some items. Germany can sell more at a lower profit margin and if you look at it in a verry abstract way (wich is difficult with economy for even well educated economists) you will see that basicly there are more goods leaving the country and less goods coming in the lower your currency goes.
You could sell your whole country if you devaluate to next to zero and then you are left with a handfull of $$ (only a handfull because the exchange rate is that bad) and no items.
Germany (and more northern countrys) do want a strong currency (they realy do pls believe me on this) and that is the reason why europe dont simply write a check by the ecb for cyprus (wich they in theory could easily do, if they would be allowed to). The ecb could finance all problems by simply printing monney wich will devaluate the euro.
The only reason the ecb is not doing this is because the most important country in europe, germany, does not allow it! (and several other northern countrys dont want this either) though my expectations are that germany will reverse its position as soon as merkel has been reelected, the stockmarket already seems to be anticipating on this.
It realy is amazing how popular opinnion on currencys has changed, 20 years ago there was no doubt amongst the public that a strong currency was a good thing to have, there where to manny examples where weak currencys crippled countrys like brazil, argentina and mexico instead of helping their economy get back on track.
. and we would lose a big shared market since we don't give our own population enough money to buy our own manfactured goods. so germany would be in quite some trouble.
[/QUOTE]
I dont agree with this as the german economy can still be competitive with a euro of 1.80, they would then still have a trade surplus! but even then:
Just imagine in this situation you would simply provide your own people with enough monney to buy these products.
Then everyone in germany will be alot more wealthy.
if you don't need their goods, you lose nothing at all AND you can export better because your products are cheaper in foreign markets. just look at iceland.
You are right about this but you do need their goods, and even if you would not need their goods you would still want a good exchange rate.
If you have the choise to trade 2 bmw,s for 1k barrels of oil or 1 bmw for 1k barrels of oil you should do the later.
You will still end up with 1k barrels of oil only you need to do less work for it.
It realy is this simple and there is nothing more to it.
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On March 21 2013 07:48 AngryMag wrote:Show nested quote +On March 21 2013 07:28 fleeze wrote:On March 21 2013 07:25 ACrow wrote:On March 21 2013 06:54 MyNameIsAlex wrote:On March 21 2013 06:48 ACrow wrote:On March 21 2013 06:21 MyNameIsAlex wrote:people are quick to attack the south, believin everything they see in TV, and acting with ignorance of how the markets work. Ok guys Germany wants a strong Euro. Whatever you say. /Laughs On March 21 2013 06:20 Yuljan wrote:On March 21 2013 04:21 fleeze wrote:On March 21 2013 03:23 Rassy wrote:
Yes a weak euro boost germans exports but germany dont need a weak euro, the german economy can cope verry well with a euro at 1.80 and still have a trade surplus! (according to a study wich i now unfortnatly cant find on the web).
The result of a weak euro is that germany have to trade 2 bmw,s for say 1k barrels of oil, while they could be trading 1 bmw for 1k barrels of oil. Having a weak currency is like a shop having a sale and selling things below cost price.You are able to sell but the indirect costs are verry high.
In the long run it is abolutely killing for the wealth in your country. you're logic is wrong. we export much more cars then we import oil. and it is never killing wealth in your country to devalue, you're only losing wealth COMPARED TO OTHER COUNTRIES. if you don't need their goods, you lose nothing at all AND you can export better because your products are cheaper in foreign markets. just look at iceland. germany is really interested in a weak euro, we just don't say it loud because USA and Japan wouldn't be pleased. good thing there's all those southern countries keeping our currency low. i'd guess the DM would skyrocket to something like 1.5 - 2 € immediately thus doubling costs for german goods in other countries. and we would lose a big shared market since we don't give our own population enough money to buy our own manfactured goods. so germany would be in quite some trouble. http://www.rieti.go.jp/jp/publications/dp/12e081.pdf+ Show Spoiler +
4. Conclusion14
Germany is now the world’s second largest exporter. Its exports have soared since it
joined the common currency in 1999. This paper seeks to understand the relationship between
Germany’s exports and its exchange rate.
The results indicate that there is a long run equilibrium relationship between Germany’s
aggregate exports, its real exchange rate, and income in importing countries. In every
specification the evidence implies that an appreciation of the German reer would reduce exports.
The results using the unit labor cost-deflated reer are precisely and robustly estimated and
indicate that a 10 percent appreciation would reduce exports by 6 percent. German exports are
also sensitive to income in the rest of the world.
Results using a panel data set indicate that consumption exports are much more sensitive
than capital goods exports are to exchange rate changes. German capital goods exports tend to
be high quality goods that compete more on quality than on price. Thus the fact that the price
elasticity is small is not surprising. The findings also indicate that German exports to the
eurozone are much more price elastic than German exports outside the eurozone.
Since Germany experienced a large internal devaluation against other eurozone countries
after 2000, one would expect exports from Germany to the eurozone to have increased. Figure 2
shows that there was indeed a surge in exports to the eurozone. This in turn contributed to the
huge eurozone imbalances that are evident in Figure 3.
Viewed from the perspective of capital flows, eurozone imbalances developed partly
because German banks became more willing to invest in peripheral eurozone countries after the
countries joined the common currency (see Gros and Mayer, 2012). However, following the
eurozone crisis, German banks and savers have become less willing to invest in Greece, Spain, 15
Portugal, Italy, and other deficit countries. Current account imbalances between European
countries may thus prove unsustainable.
In a flexible exchange rate system, part of the resulting adjustment would come through a
nominal appreciation of the German currency relative to the currencies of the deficit countries.
This is precluded as long as these countries share a common currency. Exchange rate adjustment
must come instead through a decline in wages and prices or an increase in productivity in the
peripheral countries vis-à-vis Germany. The evidence presented here indicates that these
adjustments will have to be large. Restoring equilibrium in the eurozone is thus likely to be a
long and painful process.
Sure a high exchange rate isn't perfect for us but keep in mind that the southern states are pushing for printing more money and devaluing their debts not Germany. Germany devalues the Euro with keeping th Eurozone crisis stale. The Cyprus crisis is stale for the last 2 months, and the proposed measures were a joke. I think everyone agrees on this. If not, then how about a global bank run since your deposits are in not secured anymore (hey it happened to Cyprus, and it can happen on (Spain, Portugal, Italy, maybe France)? The domino will destroy most banks. Germany had a big say on them too. How they didn't devalue the Euro with this? The same with every Eurogroup and the European Crisis in general. On March 21 2013 03:13 Yuljan wrote:On March 21 2013 03:02 MyNameIsAlex wrote:On March 21 2013 00:14 electronic voyeur wrote:
the Euro is taking is devastating toll Germany is happy about that. Euro going down, USD/EUR going up, more exports for them. Also now all the south is afraid of having money in their banks, they will move them to germany/swiss banks since their considered as the safest banks in Europe (which isn't true according to many analysts). They win twice short term.In the long run this will bite their ass. And people like this guy are the reason why we need a northern union instead of a european union. People like you should really get some education before opening their big loud mouth and parotting the propaganda. Maybe you shouldn't believe everything you see on Greek TV and be so quick to attack Germany? Just try to view this from a German's perspective (that's called empathy): Germany pays billions over billions of tax money - money that I worked very hard for - and as thanks Germany gets called Nazis and on every demonstration there are anti-German chants and/or signs. Now I get that the bailouts are used to bailout banks (some of them even German) and not help the small people while at the same time they are asking a lot of neoliberal crap. I'm against that. I know it doesn't really help. I didn't vote for that. Yet, I don't think it's fair to ask for so much and at the same time insult the hand that's feeding you. You should be angry at the incompetent politicians you voted into office the last decade, because those are the ones that failed. We all should be angry at a EU construct that is unable to deal with this, because it lacks the means to properly deal with it. And I don't get how anyone can be against letting stakeholders of Cyprus banks pay their share, as long as only the ones holding more than 100k € are affected (the decision to give a haircut to the ones below 100k was a decision by Cyprus government btw, the Troika just demanded a sum of 5.8bn from the haircut, not how it is distributed). Cyprus government tried to protect their foreign customers coming to Cyprus banks to enjoy low tax rates (which is quite parasitic in nature btw). Be angry at them, not at the Troika. 1st) You guys are feeding me? Really? No thanks, Im a phD engineer and I can feed myself. 2nd) Did I insult anyone? Did I call anyone a Nazi? Did I attack anyone? Im talkign with facts here, Germany wants a weak Euro as it helps with exports. Long term it bites them in the ass since Europe is bleeding and in the foreseeable future the market where Germany exports won't be able to "buy" anymore and German economy will take many steps back. It's only logical this will happen. Jeesus you can't take criticism and think for a moment. Also the tax on Cyprus banks can spark a bankrun in the south. Do you know the consequences of such a huge bankrun? Deposits should not in any way be touched. Not in Cyprus, not in anywhere in EU. edit: ACrow its not stakeholders, its DEPOSITS. 1) not feeding you specifically, but keeping the Greek state liquid. I do not doubt that you can take care for yourself perfectly fine and didn't mean to insult you personally at all - sorry if you got that impression! 2) again, not you specifically; I rather wanted to present a different standpoint from yours, as you were attacking a rather broad, unspecific northern standpoint as well. There is always two sides to a coin, that's my whole point, really. Btw, the argument that Germany is dependant on southern Europe is not a really convincing one. Sure, they are buying and have been buying, but this cannot work when you don't produce value in return. Right now, all this accrued export surplus does, is increase the Target2 saldo between German and Greek national banks. If Greece cannot pay this Target 2 saldo, it's just more debt. Customers of a bank are stakeholders. You entrust the bank with your money, and only a part of this money is insured by the bank (up to a certain amount, the state may have a law to protect part of this money). Anything above this amount is considered as bankrupt estate in case the bank goes bankrupt. So yes, a bank's customers are stakeholders too. "So yes, a bank's customers are stakeholders too" this statement is so retarded, i don't even.... ok. just for you. bank deposits were 100% secure in europe... up until last weekend.... no they are not. ACrow is right, they are just insured up to a certain amount, depending from Bank to Bank. No offence but it comes across as you have no clue what you are talking about, like the less clue the stronger the opinion, just saying.
i don't wonder you disagree, and ACrow and YulJan. i could say you have no clue as well, since all i'm hearing is that crap written in certain newspapers.
i won't explain in english why bank deposits are always the first to get their money off a bankrupt bank compared to stakeholders getting served last.
You are right about this but you do need their goods, and even if you would not need their goods you would still want a good exchange rate.
If you have the choise to trade 2 bmw,s for 1k barrels of oil or 1 bmw for 1k barrels of oil you should do the later.
You will still end up with 1k barrels of oil only you need to do less work for it.
It realy is this simple and there is nothing more to it.
german cars are not of a quality that you pay 2x the price. that's just untrue. if i can get 1k barrel of oil for a bmw or 2 toyota. you can't blend out competition with other countries on easily replaceable goods such as cars. there is too much competition to double your prices and still sell. what would happen in reality is the bmw would be sold for the price of 1/2 barrel, therefore reducing bmws return substantially.
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On March 21 2013 07:56 fleeze wrote:Show nested quote +On March 21 2013 07:48 AngryMag wrote:On March 21 2013 07:28 fleeze wrote:On March 21 2013 07:25 ACrow wrote:On March 21 2013 06:54 MyNameIsAlex wrote:On March 21 2013 06:48 ACrow wrote:On March 21 2013 06:21 MyNameIsAlex wrote:people are quick to attack the south, believin everything they see in TV, and acting with ignorance of how the markets work. Ok guys Germany wants a strong Euro. Whatever you say. /Laughs On March 21 2013 06:20 Yuljan wrote:On March 21 2013 04:21 fleeze wrote:On March 21 2013 03:23 Rassy wrote:
Yes a weak euro boost germans exports but germany dont need a weak euro, the german economy can cope verry well with a euro at 1.80 and still have a trade surplus! (according to a study wich i now unfortnatly cant find on the web).
The result of a weak euro is that germany have to trade 2 bmw,s for say 1k barrels of oil, while they could be trading 1 bmw for 1k barrels of oil. Having a weak currency is like a shop having a sale and selling things below cost price.You are able to sell but the indirect costs are verry high.
In the long run it is abolutely killing for the wealth in your country. you're logic is wrong. we export much more cars then we import oil. and it is never killing wealth in your country to devalue, you're only losing wealth COMPARED TO OTHER COUNTRIES. if you don't need their goods, you lose nothing at all AND you can export better because your products are cheaper in foreign markets. just look at iceland. germany is really interested in a weak euro, we just don't say it loud because USA and Japan wouldn't be pleased. good thing there's all those southern countries keeping our currency low. i'd guess the DM would skyrocket to something like 1.5 - 2 € immediately thus doubling costs for german goods in other countries. and we would lose a big shared market since we don't give our own population enough money to buy our own manfactured goods. so germany would be in quite some trouble. http://www.rieti.go.jp/jp/publications/dp/12e081.pdf+ Show Spoiler +
4. Conclusion14
Germany is now the world’s second largest exporter. Its exports have soared since it
joined the common currency in 1999. This paper seeks to understand the relationship between
Germany’s exports and its exchange rate.
The results indicate that there is a long run equilibrium relationship between Germany’s
aggregate exports, its real exchange rate, and income in importing countries. In every
specification the evidence implies that an appreciation of the German reer would reduce exports.
The results using the unit labor cost-deflated reer are precisely and robustly estimated and
indicate that a 10 percent appreciation would reduce exports by 6 percent. German exports are
also sensitive to income in the rest of the world.
Results using a panel data set indicate that consumption exports are much more sensitive
than capital goods exports are to exchange rate changes. German capital goods exports tend to
be high quality goods that compete more on quality than on price. Thus the fact that the price
elasticity is small is not surprising. The findings also indicate that German exports to the
eurozone are much more price elastic than German exports outside the eurozone.
Since Germany experienced a large internal devaluation against other eurozone countries
after 2000, one would expect exports from Germany to the eurozone to have increased. Figure 2
shows that there was indeed a surge in exports to the eurozone. This in turn contributed to the
huge eurozone imbalances that are evident in Figure 3.
Viewed from the perspective of capital flows, eurozone imbalances developed partly
because German banks became more willing to invest in peripheral eurozone countries after the
countries joined the common currency (see Gros and Mayer, 2012). However, following the
eurozone crisis, German banks and savers have become less willing to invest in Greece, Spain, 15
Portugal, Italy, and other deficit countries. Current account imbalances between European
countries may thus prove unsustainable.
In a flexible exchange rate system, part of the resulting adjustment would come through a
nominal appreciation of the German currency relative to the currencies of the deficit countries.
This is precluded as long as these countries share a common currency. Exchange rate adjustment
must come instead through a decline in wages and prices or an increase in productivity in the
peripheral countries vis-à-vis Germany. The evidence presented here indicates that these
adjustments will have to be large. Restoring equilibrium in the eurozone is thus likely to be a
long and painful process.
Sure a high exchange rate isn't perfect for us but keep in mind that the southern states are pushing for printing more money and devaluing their debts not Germany. Germany devalues the Euro with keeping th Eurozone crisis stale. The Cyprus crisis is stale for the last 2 months, and the proposed measures were a joke. I think everyone agrees on this. If not, then how about a global bank run since your deposits are in not secured anymore (hey it happened to Cyprus, and it can happen on (Spain, Portugal, Italy, maybe France)? The domino will destroy most banks. Germany had a big say on them too. How they didn't devalue the Euro with this? The same with every Eurogroup and the European Crisis in general. On March 21 2013 03:13 Yuljan wrote:On March 21 2013 03:02 MyNameIsAlex wrote:On March 21 2013 00:14 electronic voyeur wrote:
the Euro is taking is devastating toll Germany is happy about that. Euro going down, USD/EUR going up, more exports for them. Also now all the south is afraid of having money in their banks, they will move them to germany/swiss banks since their considered as the safest banks in Europe (which isn't true according to many analysts). They win twice short term.In the long run this will bite their ass. And people like this guy are the reason why we need a northern union instead of a european union. People like you should really get some education before opening their big loud mouth and parotting the propaganda. Maybe you shouldn't believe everything you see on Greek TV and be so quick to attack Germany? Just try to view this from a German's perspective (that's called empathy): Germany pays billions over billions of tax money - money that I worked very hard for - and as thanks Germany gets called Nazis and on every demonstration there are anti-German chants and/or signs. Now I get that the bailouts are used to bailout banks (some of them even German) and not help the small people while at the same time they are asking a lot of neoliberal crap. I'm against that. I know it doesn't really help. I didn't vote for that. Yet, I don't think it's fair to ask for so much and at the same time insult the hand that's feeding you. You should be angry at the incompetent politicians you voted into office the last decade, because those are the ones that failed. We all should be angry at a EU construct that is unable to deal with this, because it lacks the means to properly deal with it. And I don't get how anyone can be against letting stakeholders of Cyprus banks pay their share, as long as only the ones holding more than 100k € are affected (the decision to give a haircut to the ones below 100k was a decision by Cyprus government btw, the Troika just demanded a sum of 5.8bn from the haircut, not how it is distributed). Cyprus government tried to protect their foreign customers coming to Cyprus banks to enjoy low tax rates (which is quite parasitic in nature btw). Be angry at them, not at the Troika. 1st) You guys are feeding me? Really? No thanks, Im a phD engineer and I can feed myself. 2nd) Did I insult anyone? Did I call anyone a Nazi? Did I attack anyone? Im talkign with facts here, Germany wants a weak Euro as it helps with exports. Long term it bites them in the ass since Europe is bleeding and in the foreseeable future the market where Germany exports won't be able to "buy" anymore and German economy will take many steps back. It's only logical this will happen. Jeesus you can't take criticism and think for a moment. Also the tax on Cyprus banks can spark a bankrun in the south. Do you know the consequences of such a huge bankrun? Deposits should not in any way be touched. Not in Cyprus, not in anywhere in EU. edit: ACrow its not stakeholders, its DEPOSITS. 1) not feeding you specifically, but keeping the Greek state liquid. I do not doubt that you can take care for yourself perfectly fine and didn't mean to insult you personally at all - sorry if you got that impression! 2) again, not you specifically; I rather wanted to present a different standpoint from yours, as you were attacking a rather broad, unspecific northern standpoint as well. There is always two sides to a coin, that's my whole point, really. Btw, the argument that Germany is dependant on southern Europe is not a really convincing one. Sure, they are buying and have been buying, but this cannot work when you don't produce value in return. Right now, all this accrued export surplus does, is increase the Target2 saldo between German and Greek national banks. If Greece cannot pay this Target 2 saldo, it's just more debt. Customers of a bank are stakeholders. You entrust the bank with your money, and only a part of this money is insured by the bank (up to a certain amount, the state may have a law to protect part of this money). Anything above this amount is considered as bankrupt estate in case the bank goes bankrupt. So yes, a bank's customers are stakeholders too. "So yes, a bank's customers are stakeholders too" this statement is so retarded, i don't even.... ok. just for you. bank deposits were 100% secure in europe... up until last weekend.... no they are not. ACrow is right, they are just insured up to a certain amount, depending from Bank to Bank. No offence but it comes across as you have no clue what you are talking about, like the less clue the stronger the opinion, just saying. i don't wonder you disagree, and ACrow and YulJan. i could say you have no clue as well, since all i'm hearing is that crap written in certain newspapers. i won't explain in english why bank deposits are always the first to get their money off a bankrupt bank compared to stakeholders getting served last.
If a bank goes bankrupt, nobody gets money from the bank anymore, bankrupt like not be able to pay anymore. Depending on the insurance clause of the bank, some stakeholders and depositors get a certain amount of money from a reinsurance company. Bank is bust and out of the game.
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On March 21 2013 07:37 fleeze wrote:
btw: "So I prefer getting some money for the bailout from the super rich instead of none."
and the super rich have their money in bank deposits for 1-2% interest.... naivity at its finest.
There is enough individuals that have more than 100k€ in Cyprus that they would need to pay a haircut of something like 15% or so (don't quote me on that, I don't know the exact number for that from the top of my hat, but it was in all news the last few days) so that any customer with a deposit of less than100k€ would not need to pay a cent. Cyprus' government did not want to do this to not scare rich foreigners from their tax oasis. They are NOT doing this for Cyprus' people.
Oh, btw, if you believe that anyone that has more than 100k€ in a bank gets only 1-2% of interest, now, that's what I would call naive.
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On March 21 2013 06:48 ACrow wrote:Show nested quote +On March 21 2013 06:21 MyNameIsAlex wrote:people are quick to attack the south, believin everything they see in TV, and acting with ignorance of how the markets work. Ok guys Germany wants a strong Euro. Whatever you say. /Laughs On March 21 2013 06:20 Yuljan wrote:On March 21 2013 04:21 fleeze wrote:On March 21 2013 03:23 Rassy wrote:
Yes a weak euro boost germans exports but germany dont need a weak euro, the german economy can cope verry well with a euro at 1.80 and still have a trade surplus! (according to a study wich i now unfortnatly cant find on the web).
The result of a weak euro is that germany have to trade 2 bmw,s for say 1k barrels of oil, while they could be trading 1 bmw for 1k barrels of oil. Having a weak currency is like a shop having a sale and selling things below cost price.You are able to sell but the indirect costs are verry high.
In the long run it is abolutely killing for the wealth in your country. you're logic is wrong. we export much more cars then we import oil. and it is never killing wealth in your country to devalue, you're only losing wealth COMPARED TO OTHER COUNTRIES. if you don't need their goods, you lose nothing at all AND you can export better because your products are cheaper in foreign markets. just look at iceland. germany is really interested in a weak euro, we just don't say it loud because USA and Japan wouldn't be pleased. good thing there's all those southern countries keeping our currency low. i'd guess the DM would skyrocket to something like 1.5 - 2 € immediately thus doubling costs for german goods in other countries. and we would lose a big shared market since we don't give our own population enough money to buy our own manfactured goods. so germany would be in quite some trouble. http://www.rieti.go.jp/jp/publications/dp/12e081.pdf+ Show Spoiler +
4. Conclusion14
Germany is now the world’s second largest exporter. Its exports have soared since it
joined the common currency in 1999. This paper seeks to understand the relationship between
Germany’s exports and its exchange rate.
The results indicate that there is a long run equilibrium relationship between Germany’s
aggregate exports, its real exchange rate, and income in importing countries. In every
specification the evidence implies that an appreciation of the German reer would reduce exports.
The results using the unit labor cost-deflated reer are precisely and robustly estimated and
indicate that a 10 percent appreciation would reduce exports by 6 percent. German exports are
also sensitive to income in the rest of the world.
Results using a panel data set indicate that consumption exports are much more sensitive
than capital goods exports are to exchange rate changes. German capital goods exports tend to
be high quality goods that compete more on quality than on price. Thus the fact that the price
elasticity is small is not surprising. The findings also indicate that German exports to the
eurozone are much more price elastic than German exports outside the eurozone.
Since Germany experienced a large internal devaluation against other eurozone countries
after 2000, one would expect exports from Germany to the eurozone to have increased. Figure 2
shows that there was indeed a surge in exports to the eurozone. This in turn contributed to the
huge eurozone imbalances that are evident in Figure 3.
Viewed from the perspective of capital flows, eurozone imbalances developed partly
because German banks became more willing to invest in peripheral eurozone countries after the
countries joined the common currency (see Gros and Mayer, 2012). However, following the
eurozone crisis, German banks and savers have become less willing to invest in Greece, Spain, 15
Portugal, Italy, and other deficit countries. Current account imbalances between European
countries may thus prove unsustainable.
In a flexible exchange rate system, part of the resulting adjustment would come through a
nominal appreciation of the German currency relative to the currencies of the deficit countries.
This is precluded as long as these countries share a common currency. Exchange rate adjustment
must come instead through a decline in wages and prices or an increase in productivity in the
peripheral countries vis-à-vis Germany. The evidence presented here indicates that these
adjustments will have to be large. Restoring equilibrium in the eurozone is thus likely to be a
long and painful process.
Sure a high exchange rate isn't perfect for us but keep in mind that the southern states are pushing for printing more money and devaluing their debts not Germany. Germany devalues the Euro with keeping th Eurozone crisis stale. The Cyprus crisis is stale for the last 2 months, and the proposed measures were a joke. I think everyone agrees on this. If not, then how about a global bank run since your deposits are in not secured anymore (hey it happened to Cyprus, and it can happen on (Spain, Portugal, Italy, maybe France)? The domino will destroy most banks. Germany had a big say on them too. How they didn't devalue the Euro with this? The same with every Eurogroup and the European Crisis in general. On March 21 2013 03:13 Yuljan wrote:On March 21 2013 03:02 MyNameIsAlex wrote:On March 21 2013 00:14 electronic voyeur wrote:
the Euro is taking is devastating toll Germany is happy about that. Euro going down, USD/EUR going up, more exports for them. Also now all the south is afraid of having money in their banks, they will move them to germany/swiss banks since their considered as the safest banks in Europe (which isn't true according to many analysts). They win twice short term.In the long run this will bite their ass. And people like this guy are the reason why we need a northern union instead of a european union. People like you should really get some education before opening their big loud mouth and parotting the propaganda. Maybe you shouldn't believe everything you see on Greek TV and be so quick to attack Germany? Just try to view this from a German's perspective (that's called empathy): Germany pays billions over billions of tax money - money that I worked very hard for - and as thanks Germany gets called Nazis and on every demonstration there are anti-German chants and/or signs. Now I get that the bailouts are used to bailout banks (some of them even German) and not help the small people while at the same time they are asking a lot of neoliberal crap. I'm against that. I know it doesn't really help. I didn't vote for that. Yet, I don't think it's fair to ask for so much and at the same time insult the hand that's feeding you. You should be angry at the incompetent politicians you voted into office the last decade, because those are the ones that failed. We all should be angry at a EU construct that is unable to deal with this, because it lacks the means to properly deal with it. And I don't get how anyone can be against letting stakeholders of Cyprus banks pay their share, as long as only the ones holding more than 100k € are affected (the decision to give a haircut to the ones below 100k was a decision by Cyprus government btw, the Troika just demanded a sum of 5.8bn from the haircut, not how it is distributed). Cyprus government tried to protect their foreign customers coming to Cyprus banks to enjoy low tax rates (which is quite parasitic in nature btw). Be angry at them, not at the Troika.
That "german perspective" is not better than the common right wing american tea party perspective.
You are not paying billions over billions.
You are creditors to loans that must be repaid with an interest rate by bankrupt countries.
Your government supports and in fact demanded the involvement of IMF, the organization that with their policies either reduced down to poverty and murdered thousands and thousands of people around the globe and supported every bloody dictator who would be willing to work with them.
You government and EU is actively terrorising and blackmailing the citizens of the member countries and when i talk about terrorism i do not exaggerate or speak with a metaphor, i mean pure and real terrorism.
You talking about blaming the incompetent politicians and you are completely right. That's what people first tried to do choosing different political parties with no involvement to the government but then EU intervened with a huge campaign of terrorism and forced people to vote the same old politicians.
Believe me when i say that Greece easily surpassed North Korea on circulated FUD during the last elections period.
And now you discovered that Cyprus is a "money haven". You can't imagine how funny that sounds in the EU of Luxembourg, Latvia, London's laundry namely Ireland, Greece and ofc Germany, the 3rd world's arm exporter, the country of Siemens, Ferrostaal, Man and so many other companies whose profits through bribing politicians sponsored for reelection by the EU (see above) could possibly buy all banks of Cyprus.
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german cars are not of a quality that you pay 2x the price. that's just untrue. if i can get 1k barrel of oil for a bmw or 2 toyota. you can't blend out competition with other countries on easily replaceable goods such as cars. there is too much competition to double your prices and still sell. what would happen in reality is the bmw would be sold for the price of 1/2 barrel, therefore reducing bmws return substantially.
You right about this, there are off course limits on how strong your currency can go. Thats why i added that germany would still be competitive even with a euro at 1.80 ( though unfortunatly i cant reproduce the research wich showed this) the chinese will then still buy the audis and they wont switch to toyota to say it simple.
I would say,you want your currency to be as strong as possible while maintaining a small trade surplus.
Devaluating when you already have a trade surplus is like a shop who is selling verry well and then suddenly having a permanent sale.
There is no need for it besides to push out newcomers and if you keep with such a policy forever you are simply giving away your wealth.
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On March 21 2013 08:01 AngryMag wrote:Show nested quote +On March 21 2013 07:56 fleeze wrote:On March 21 2013 07:48 AngryMag wrote:On March 21 2013 07:28 fleeze wrote:On March 21 2013 07:25 ACrow wrote:On March 21 2013 06:54 MyNameIsAlex wrote:On March 21 2013 06:48 ACrow wrote:On March 21 2013 06:21 MyNameIsAlex wrote:people are quick to attack the south, believin everything they see in TV, and acting with ignorance of how the markets work. Ok guys Germany wants a strong Euro. Whatever you say. /Laughs On March 21 2013 06:20 Yuljan wrote:On March 21 2013 04:21 fleeze wrote:
[quote]
you're logic is wrong. we export much more cars then we import oil.
and it is never killing wealth in your country to devalue, you're only losing wealth COMPARED TO OTHER COUNTRIES. if you don't need their goods, you lose nothing at all AND you can export better because your products are cheaper in foreign markets. just look at iceland.
germany is really interested in a weak euro, we just don't say it loud because USA and Japan wouldn't be pleased.
good thing there's all those southern countries keeping our currency low. i'd guess the DM would skyrocket to something like 1.5 - 2 € immediately thus doubling costs for german goods in other countries. and we would lose a big shared market since we don't give our own population enough money to buy our own manfactured goods. so germany would be in quite some trouble.
http://www.rieti.go.jp/jp/publications/dp/12e081.pdf+ Show Spoiler +
4. Conclusion14
Germany is now the world’s second largest exporter. Its exports have soared since it
joined the common currency in 1999. This paper seeks to understand the relationship between
Germany’s exports and its exchange rate.
The results indicate that there is a long run equilibrium relationship between Germany’s
aggregate exports, its real exchange rate, and income in importing countries. In every
specification the evidence implies that an appreciation of the German reer would reduce exports.
The results using the unit labor cost-deflated reer are precisely and robustly estimated and
indicate that a 10 percent appreciation would reduce exports by 6 percent. German exports are
also sensitive to income in the rest of the world.
Results using a panel data set indicate that consumption exports are much more sensitive
than capital goods exports are to exchange rate changes. German capital goods exports tend to
be high quality goods that compete more on quality than on price. Thus the fact that the price
elasticity is small is not surprising. The findings also indicate that German exports to the
eurozone are much more price elastic than German exports outside the eurozone.
Since Germany experienced a large internal devaluation against other eurozone countries
after 2000, one would expect exports from Germany to the eurozone to have increased. Figure 2
shows that there was indeed a surge in exports to the eurozone. This in turn contributed to the
huge eurozone imbalances that are evident in Figure 3.
Viewed from the perspective of capital flows, eurozone imbalances developed partly
because German banks became more willing to invest in peripheral eurozone countries after the
countries joined the common currency (see Gros and Mayer, 2012). However, following the
eurozone crisis, German banks and savers have become less willing to invest in Greece, Spain, 15
Portugal, Italy, and other deficit countries. Current account imbalances between European
countries may thus prove unsustainable.
In a flexible exchange rate system, part of the resulting adjustment would come through a
nominal appreciation of the German currency relative to the currencies of the deficit countries.
This is precluded as long as these countries share a common currency. Exchange rate adjustment
must come instead through a decline in wages and prices or an increase in productivity in the
peripheral countries vis-à-vis Germany. The evidence presented here indicates that these
adjustments will have to be large. Restoring equilibrium in the eurozone is thus likely to be a
long and painful process.
Sure a high exchange rate isn't perfect for us but keep in mind that the southern states are pushing for printing more money and devaluing their debts not Germany. Germany devalues the Euro with keeping th Eurozone crisis stale. The Cyprus crisis is stale for the last 2 months, and the proposed measures were a joke. I think everyone agrees on this. If not, then how about a global bank run since your deposits are in not secured anymore (hey it happened to Cyprus, and it can happen on (Spain, Portugal, Italy, maybe France)? The domino will destroy most banks. Germany had a big say on them too. How they didn't devalue the Euro with this? The same with every Eurogroup and the European Crisis in general. On March 21 2013 03:13 Yuljan wrote:On March 21 2013 03:02 MyNameIsAlex wrote:
[quote]
Germany is happy about that. Euro going down, USD/EUR going up, more exports for them.
Also now all the south is afraid of having money in their banks, they will move them to germany/swiss banks since their considered as the safest banks in Europe (which isn't true according to many analysts).
They win twice short term.In the long run this will bite their ass. And people like this guy are the reason why we need a northern union instead of a european union. People like you should really get some education before opening their big loud mouth and parotting the propaganda. Maybe you shouldn't believe everything you see on Greek TV and be so quick to attack Germany? Just try to view this from a German's perspective (that's called empathy): Germany pays billions over billions of tax money - money that I worked very hard for - and as thanks Germany gets called Nazis and on every demonstration there are anti-German chants and/or signs. Now I get that the bailouts are used to bailout banks (some of them even German) and not help the small people while at the same time they are asking a lot of neoliberal crap. I'm against that. I know it doesn't really help. I didn't vote for that. Yet, I don't think it's fair to ask for so much and at the same time insult the hand that's feeding you. You should be angry at the incompetent politicians you voted into office the last decade, because those are the ones that failed. We all should be angry at a EU construct that is unable to deal with this, because it lacks the means to properly deal with it. And I don't get how anyone can be against letting stakeholders of Cyprus banks pay their share, as long as only the ones holding more than 100k € are affected (the decision to give a haircut to the ones below 100k was a decision by Cyprus government btw, the Troika just demanded a sum of 5.8bn from the haircut, not how it is distributed). Cyprus government tried to protect their foreign customers coming to Cyprus banks to enjoy low tax rates (which is quite parasitic in nature btw). Be angry at them, not at the Troika. 1st) You guys are feeding me? Really? No thanks, Im a phD engineer and I can feed myself. 2nd) Did I insult anyone? Did I call anyone a Nazi? Did I attack anyone? Im talkign with facts here, Germany wants a weak Euro as it helps with exports. Long term it bites them in the ass since Europe is bleeding and in the foreseeable future the market where Germany exports won't be able to "buy" anymore and German economy will take many steps back. It's only logical this will happen. Jeesus you can't take criticism and think for a moment. Also the tax on Cyprus banks can spark a bankrun in the south. Do you know the consequences of such a huge bankrun? Deposits should not in any way be touched. Not in Cyprus, not in anywhere in EU. edit: ACrow its not stakeholders, its DEPOSITS. 1) not feeding you specifically, but keeping the Greek state liquid. I do not doubt that you can take care for yourself perfectly fine and didn't mean to insult you personally at all - sorry if you got that impression! 2) again, not you specifically; I rather wanted to present a different standpoint from yours, as you were attacking a rather broad, unspecific northern standpoint as well. There is always two sides to a coin, that's my whole point, really. Btw, the argument that Germany is dependant on southern Europe is not a really convincing one. Sure, they are buying and have been buying, but this cannot work when you don't produce value in return. Right now, all this accrued export surplus does, is increase the Target2 saldo between German and Greek national banks. If Greece cannot pay this Target 2 saldo, it's just more debt. Customers of a bank are stakeholders. You entrust the bank with your money, and only a part of this money is insured by the bank (up to a certain amount, the state may have a law to protect part of this money). Anything above this amount is considered as bankrupt estate in case the bank goes bankrupt. So yes, a bank's customers are stakeholders too. "So yes, a bank's customers are stakeholders too" this statement is so retarded, i don't even.... ok. just for you. bank deposits were 100% secure in europe... up until last weekend.... no they are not. ACrow is right, they are just insured up to a certain amount, depending from Bank to Bank. No offence but it comes across as you have no clue what you are talking about, like the less clue the stronger the opinion, just saying. i don't wonder you disagree, and ACrow and YulJan. i could say you have no clue as well, since all i'm hearing is that crap written in certain newspapers. i won't explain in english why bank deposits are always the first to get their money off a bankrupt bank compared to stakeholders getting served last. If a bank goes bankrupt, nobody gets money from the bank anymore, bankrupt like not be able to pay anymore. Depending on the insurance clause of the bank, some stakeholders and depositors get a certain amount of money from a reinsurance company. Bank is bust and out of the game.
it doesn't depend on the bank but on the country.
here's the wikipedia excerpt:
Directive 94/19/EC of the European Parliament and of the Council of 30 May 1994 on deposit-guarantee schemes[6] requires all member states to have a deposit guarantee scheme for at least 90% of the deposited amount, up to at least 20,000 euro per person.On October 7, 2008, the Ecofin meeting of EU's ministers of finance agreed to increase the minimum amount to 50,000.[7] Timelines and details on procedures for the implementation, which is likely to be a national matter for the member states, was not immediately available. The increased amount followed on Ireland's move, in September 2008, to increase its deposit insurance to an unlimited amount. Many other EU countries, starting with the United Kingdom, reacted by increasing its limit to avoid that people transfer savings to Irish banks.
cypress had 100k "insured" obviously the ECB would have to pay ANY insurance if a bank collapses in a european country.
On March 21 2013 08:06 Rassy wrote:
german cars are not of a quality that you pay 2x the price. that's just untrue. if i can get 1k barrel of oil for a bmw or 2 toyota. you can't blend out competition with other countries on easily replaceable goods such as cars. there is too much competition to double your prices and still sell. what would happen in reality is the bmw would be sold for the price of 1/2 barrel, therefore reducing bmws return substantially.
You right about this, there are off course limits on how strong your currency can go. Thats why i added that germany would still be competitive even with a euro at 1.80 ( though unfortunatly i cant reproduce the research wich showed this) the chinese will then still buy the audis and they wont switch to toyota to say it simple.
I would say,you want your currency to be as strong as possible while maintaining a small trade surplus.
Devaluating when you already have a trade surplus is like a shop who is selling verry well and then suddenly having a permanent sale.
There is no need for it besides to push out newcomers and if you keep with such a policy forever you are simply giving away your wealth.
i agree with you on this one. germany has a trade balance of +/- 2% as goal according to our old Ludwig Erhardt. failing pretty hard with +9%
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I don't know a thing about economy, but just from browsing media, it seems to me that Germany really cares about the European Union unlike countries like the United Kingdom. The latter is so anti-EU I don't know where to start from.
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On March 21 2013 08:16 darkness wrote:
I don't know a thing about economy, but just from browsing media, it seems to me that Germany really cares about the European Union unlike countries like the United Kingdom. The latter is so anti-EU I don't know where to start from.
Germany is probably the biggest beneficiary of the Eurozone. They had better care about it.
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On March 21 2013 08:20 WTFZerg wrote:Show nested quote +On March 21 2013 08:16 darkness wrote:
I don't know a thing about economy, but just from browsing media, it seems to me that Germany really cares about the European Union unlike countries like the United Kingdom. The latter is so anti-EU I don't know where to start from. Germany is probably the biggest beneficiary of the Eurozone. They had better care about it.
If you talk about the big exporting multinational corporations that sit in germany, true.
Not true for many normal germans. He may be (with exception of finland, austria, netherlans, luxemburg) the least worse hit by the euro.
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On March 21 2013 08:02 ACrow wrote:Show nested quote +On March 21 2013 07:37 fleeze wrote:
btw: "So I prefer getting some money for the bailout from the super rich instead of none."
and the super rich have their money in bank deposits for 1-2% interest.... naivity at its finest. There is enough individuals that have more than 100k€ in Cyprus that they would need to pay a haircut of something like 15% or so (don't quote me on that, I don't know the exact number for that from the top of my hat, but it was in all news the last few days) so that any customer with a deposit of less than100k€ would not need to pay a cent. Cyprus' government did not want to do this to not scare rich foreigners from their tax oasis. They are NOT doing this for Cyprus' people. Oh, btw, if you believe that anyone that has more than 100k€ in a bank gets only 1-2% of interest, now, that's what I would call naive.
oh, just missed this hilarious post. this deservers an answer:
if you got more then 100k you don't even have your money in "bank deposits" you have it invested in property or on the stock market. do you even know what you are talking about? if it is, like i said, a liquidity tax, it is NOT a wealth tax. it will ONLY hit small people.
the problem is german media is making it sound like this retarded tax IS a wealth tax, which it isn't. you could have figured that out with some basic thinking yourself btw.
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Jesus, this thread has gone crazy for the last couple of days.
While it is a bit of a surface-skater, The Guardian has a top 6 most important actors:
Germany
Russia
IMF
European Commission
ECB
Cyprus
source
Now, what is claimed to be the german suggestion has fallen in Cyprus. source
IMF seems to be playing itself out of the field through corruption allegations against ms Legarde source
It seems ECB has made their position clear and since Germany is against the bonds solution... Latest news is that ECB seems to be ready to cut the Cyprus from the Euro, by a default source
The commission came out yesterday with a blurry statement essentially saying the ball is at the hands of Cyprus since the european offer(s) was/were turned down. source
It appears Russia is interested in giving some help to Cyprus and it seems that a "plan B" will be introduced tomorrow with some support from Russia based on bonds covering future tapping of Cyprus natural gas and still with some deposit tax, but at a lower percentage. It also sounds like Russia is cautious for once because it doesn't want to hurt their relations with EU.source
Now let us focus on the more factually based stories from international sources and let the german and greek paranoia go!
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german media is reporting that the talks between Russia and Cyprus ended without a solution. Russian investors showed no interest in the offered deal regarding Cyprus gas faciliation. Assuming the reprots are credible, there is still no solution on the horizon. Basically the situation is the same as one week ago. Back to zero so to say.
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The latest news are that Russia will not help Cyprus. Cyprus is working on an alternative plan which involves taking money from the pension system and gold from the central bank. In my view, this is not acceptable because it reduces governmental assets and hence reduces the basis for addittional credits. According to the FAZ, Mr Schäuble is sceptical as well.
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Respect for Cyprus for not surending to the blackmail of Germany and Russia.
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According to the Stern, Mrs Merkel is also against Plan B proposed by Cyprus. Thank god. My prediction would be that at the end Cyprus will eventually accept some form of the initial, generous bail out offer.
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Bloomberg: eurogroup's new plan
Bloomberg is reporting that Eurozone finance ministers are pushing Cyprus to hit large depositors at both of its two biggest banks - Bank of Cyprus and Laiki - with losses of up to 40%, in an attempt to get a new bailout deal agreed in time.
Under the plan, attributed to four European officials, the two institutions would be smashed together to create a 'good' bank and a 'bad' bank:
Insured deposits -- below the European Union ceiling of 100,000 euros ($129,000) -- would go into a so-called good bank and not sustain any losses, while uninsured deposits would go into the bad bank and be frozen until assets could be sold, said the four officials.
Losses to unsecured creditors, including uninsured depositors, could reach 40%, which has support from the International Monetary Fund and the European Central Bank.
More here.
Close watchers of the crisis will know that a similar version of this plan was discussed at the meeting last weekend when the Cyprus bailout was agreed.
As this inside story of the negotiations explains, Germany and the IMF wanted a big hit on wealthier savers' deposits, the commission was keen on modest contributions from savers with less than €100,000 and president Anastasiades didn't want to spook wealthy Russians.
http://www.guardian.co.uk/business/2013/mar/22/eurozone-crisis-cyprus-bailout-russia-vote
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On March 22 2013 18:15 mdb wrote:
Respect for Cyprus for not surending to the blackmail of Germany and Russia.
Still funny to read posts like this. How dare Germany offer to bail out someone! How could we do such a dastardly deed.
Frankly this discussion makes me sick, no one forced Zyprus or Greece to run their economy into the ground and spend far more than they could afford. In fact the EU has transferred billions of euro to them before this crisis even started. Maybe they should clean up their own mess for a change instead of blaming the people who are willing to help them.
Yes the cuts demanded by the bailouts are harsh, but frankly it isn't our responsibility to pay for your debts in the first place, so you better believe we will demand you carry at least some part of the burden as well.
The goverment of zyprus knew exactly how much money they would need in the near future. They literally had years since the Greek crisis started to make reforms and prepare for this, instead they did little to nothing and now the debts are close to becoming due.
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EPT
