EPTIts a huge counterfiting thing the nazis tried to do in ww2 and it a great read.
The European Debt Crisis and the Euro - Page 24
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Yung
United States727 Posts
Its a huge counterfiting thing the nazis tried to do in ww2 and it a great read. | ||
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Hatsu
United Kingdom474 Posts
On January 05 2011 07:09 MoltkeWarding wrote: The rate of a sovereign bond is based on the state of that country's finances. The recently proffered Euro-bond has been rejected by the German government. Germany is evidently not willing to share the costs of borrowing with Greece. No the rate of a sovereign bond is based on how much risk the market perceives in lending to a country, which is not exactly the same as saying "the state of a country's finances". Crucially, being part of the euro was supposed to make such risk decrease, as the market assumed that more risky debt from, for example, PIGS would be guaranteed by more financially healty bits of the EU (namely Germany). Look at this chart: ![[image loading]](http://www.timesofmalta.com/media/serve/20101111--133150-com_06.jpg) See what's going on? It DID work for some time, now you see divergence. | ||
TanGeng
Sanya12364 Posts
I don't see what you are arguing about. "State of finances" could mean "default risk" depending on how you interpret it. Default risk is seen as the ability of each state (arch. nation) to repay, and depends on future revenue streams (growth projection) as much as current fiscal situation. A bit of semantics or clarification would smooth over differences. The competitive advantage of Euro as it has become for Germany over the long run is also part-in-part public fiscal responsibility. Germany shows more private fiscal responsibility by having a higher private savings rate. Higher total savings rate means that Germany is set up for low inflation and low interest rate over the long run. In contrast, the Med. countries are set up for high inflation and high interest rates. By unifying the monetary system, the Meds. enjoyed low interest rates over the short run to feed their fiscal irresponsibility. That benefits them over the short run(1999-2003). In the long run, these countries did not adjusted their fiscal situation to justify a low inflation, low interest rate economy. The first sign of divergence would be inflation difference in Germany and the Meds. The higher inflation in the Meds. eroded their competitiveness against Germany and the other northern economies. After that, a current account surplus in Germany and a current account deficit in the Meds would develop. The sovereign interest rate divergence happens when the deficits get too big and sources of tax revenue are threatened. It is a lagging indicator of problems that have already festered for a long time. | ||
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bUbUsHeD
China54 Posts
Great app, thx for posting! | ||
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Deep[BluE[
Switzerland78 Posts
On January 05 2011 04:41 darmousseh wrote: I love the Euro. Finally Europe might learn some fiscal responsibility and improve their living conditions instead of becoming the laughingstock of the economic world. The Euro is the best possible thing to happen to a socialist continent since it's hard to be socialist when you can't just print your next paycheck. So I heard that the USA might lose its Aaa rating, clearly the EU should just look across the Atlantic to see how it's supposed to be done, right? Ontopic: I think it's a little bit premature to discuss post-euro-scenarios. It isn't that easy to just abandon the euro or to throw certain countries out of the monetary union, and you certainly cannot do that while stabilizing said countries at the same time, so whatever they decide will have to wait until the immediate threat of national bankruptcy is avertred. | ||
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Doctorbeat
Netherlands13241 Posts
http://www.bloomberg.com/news/2011-05-07/eu-said-to-consider-requiring-more-collateral-for-extra-greek-aid-on-debt.html People are now suggesting collateral for any aid that will be given from this point on. Us other EU countries are mostly tired of taking Greece's bullet, and I don't think many EU countries are willing to pay more money to Greece without anything in return. There are also rumours going about a restructuring of Greece and it's monetary policy, but that would be shooting themselves in the foot. A restructuring and reintroduction of the Drachme (which would fall in value instantly) would fail, as the outstanding debt will still be in Euro's and this would thus only increase the debt. I think Greece selling some of their islands as collateral is not necessarily a bad idea. Even though this idea is a desperate one, it deserves a good amount of attention, as Greece is still having a deficit and not even close to paying anything or anyone back. | ||
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Gracksaurusrex
United Kingdom171 Posts
They have a serious problem when it comes to tax inforcing | ||
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Doctorbeat
Netherlands13241 Posts
On May 11 2011 02:30 Gracksaurusrex wrote: The problem with Greece is that taxes to their people are almost optional They have a serious problem when it comes to tax inforcing As 20% of the money that goes around is untaxed, I'd even say that avoiding tax is the national sport. As the Greek government, I'd stop paying social benefits if people aren't paying their taxes. | ||
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xafies
Greece78 Posts
On May 11 2011 02:30 Gracksaurusrex wrote: The problem with Greece is that taxes to their people are almost optional They have a serious problem when it comes to tax inforcing tax evasion is the tip of the iceberg. do you seriously think a debt like this was created just by a greedy middle class not declaring everything? | ||
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Dakk
Sweden572 Posts
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xafies
Greece78 Posts
On May 11 2011 02:42 Doctorbeat wrote: As 20% of the money that goes around is untaxed, I'd even say that avoiding tax is the national sport. As the Greek government, I'd stop paying social benefits if people aren't paying their taxes. it's irritating to see people assume that the various greek governments played no part in the general distrust the greek people show towards the state. Deep corruption combined with other factors played a huge part. Fwiw the rules on taxes have nowadays become much more strict and the problem is still irreversible | ||
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Joementum
787 Posts
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RvB
Netherlands6236 Posts
On May 11 2011 02:46 xafies wrote: tax evasion is the tip of the iceberg. do you seriously think a debt like this was created just by a greedy middle class not declaring everything? Seeing as they expect they can get 18 billion by actually enforcing the law yes it is quite a big part of the reason why they're in so much debts, of course there are a lot of other things responsible for it but it's certainly not just a tip of the iceberg. In the Netherlands we're quite unhappy btw that we didn't get invited to that meeting while we're actually one of the countries has to pay while countries like italy and spain get invited which are countries with problems themself. Even worse we weren't even informed about it which is quite a big deal imo but we'll see how this turns out. | ||
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Doctorbeat
Netherlands13241 Posts
On May 11 2011 02:59 Joementum wrote: Does anyone else think that adopting a single currency for multiple nations and multiple economies was a bad idea? It does really make sense that countries like Germany have to suffer for something that isn't their fault at all. It wouldn't be a problem if there was actually a disciplinary organ in Europe against corrupt governments. Italy, Ireland, Spain, Portugal and Greece shouldn't even have gotten in the Euro program. Berlusconi's outright a criminal. @xafies: Isn't Greece a democratic country? You have the vote to change your government. Unless your voting system is corrupt aswell. Yes, Greece has more problems, but you can't deny that the people of Greece have had it fairly well for the last years before the crisis. There were reports here that the average pensioner age was ~60, whereas it has been 65 for most of the EU countries for years, mine is even rising to 67. A question for you though: How do you view the idea that maybe Greece should sell some of it's land to even the debt a little? | ||
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xafies
Greece78 Posts
On May 11 2011 03:05 RvB wrote: Seeing as they expect they can get 18 billion by actually enforcing the law yes it is quite a big part of the reason why they're in so much debts, of course there are a lot of other things responsible for it but it's certainly not just a tip of the iceberg. In the Netherlands we're quite unhappy btw that we didn't get invited to that meeting while we're actually one of the countries has to pay while countries like italy and spain get invited which are countries with problems themself. Even worse we weren't even informed about it which is quite a big deal imo but we'll see how this turns out. 18 billion? nice, so that means it's only about ~320 billion euros left for the debt to be cleared. Seriously corruption in the greek government was so huge that blaming it mostly on the people not paying taxes is a bit of a joke. Obv the people make their governments etc but you have to understand that the greek public had no idea whatsoever wtf is going on with the whole debt situation before the huge crisis broke out. On the other hand there were happy loaners everywhere ,huge spending on military equipment (submarines from germany in order to give us a loan ), big time corporations like siemens spreading tentacles everywhere inside the greek state etc etc. And then I hear of oversimplifications like: it's my father's fault because he didn't retire at 67. It's only natural that people are searching for scapegoats, but simplifying everything and treating all different sorts of people with tags like "lazy/tax evading greeks" shows nationalistic foolishness edit I am not saying that tax evasion isn't a big problem, in order to stop it the state has to gain the people's trust again. Measures have already been taken,I don't know what else can be done about this whole messy situation | ||
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warding
Portugal2394 Posts
However, this isn't just a problem of having corrupt south european governments.Much of the problem with the single currency in the EU is created by the fact that monetary policy in the Eurozone cannot be optimal for 17 economies at the same time. What effectively happens is that interest rates are set according to the 'needs' of the greater share of the Eurozone economy, which pretty much means Germany. The other key issue here is that besides the fault of PIGS's governments in piling up huge debts, there is also fault in those who lent to them at very low interest rates. In retrospective, these governments were able to borrow at too low interest rates, allowing them greater levels of spending. In normal situations, the lenders should share the pain, and in fact that's what would happen in case of a restructuring or default of debt. So in effect, a bailout of Greece, Ireland and Portugal is also a bailout of the institutions who lent the money to these governments. | ||
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DoXa
Switzerland1448 Posts
On May 11 2011 02:48 Dakk wrote: Times like theese i am happy sweden did not join EMU (get the euro currency) Times like these I am happy Switzerland never joined EU | ||
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Aristodemus
England1996 Posts
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Doctorbeat
Netherlands13241 Posts
On May 11 2011 03:39 xafies wrote: 18 billion? nice, so that means it's only about ~320 billion euros left for the debt to be cleared. Seriously corruption in the greek government was so huge that blaming it mostly on the people not paying taxes is a bit of a joke. Obv the people make their governments etc but you have to understand that the greek public had no idea whatsoever wtf is going on with the whole debt situation before the huge crisis broke out. On the other hand there were happy loaners everywhere ,huge spending on military equipment (submarines from germany in order to give us a loan ), big time corporations like siemens spreading tentacles everywhere inside the greek state etc etc. And then I hear of oversimplifications like: it's my father's fault because he didn't retire at 67. It's only natural that people are searching for scapegoats, but simplifying everything and treating all different sorts of people with tags like "lazy/tax evading greeks" shows nationalistic foolishness edit I am not saying that tax evasion isn't a big problem, in order to stop it the state has to gain the people's trust again. Measures have already been taken,I don't know what else can be done about this whole messy situation I do hope you understand the sentiment of many Northwest Europeans though. When you have hadmore luxurious social benefits and better retirement policies, and we had it worse, it doesn't really feel fair. Especially when we suck it up that we have to bail everyone out, and people riot in Greece because they aren't prepared to pay more. It feels awkward at best. Another major problem seems to be the lack of authority within the European Union. There is no sactioning institute, and countries seem to do whatever they want, especially the southern ones. The northern countries don't have the balls to do so, and the little ones like mine even less. There are two courses Europe can take, one being to have a supreme federal European government that has authority over the nations, and one being to restrict themselves to economic and personal freedom within the European union. | ||
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jello_biafra
United Kingdom6638 Posts
On May 11 2011 04:00 Aristodemus wrote: You guys do realise that every EU member pays for these bailouts? Regardless of whether you joined the euro. Non-Euro members pay less however as it doesn't affect them as much and Switzerland isn't in the EU at all. | ||
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