The European Debt Crisis and the Euro - Page 53

On November 26 2011 05:22 Black Gun wrote:
a downgrade of belgium shouldnt be overrated as their political crisis explains it, at least in parts.

On November 26 2011 08:02 DeepElemBlues wrote:
Belgium forgot that the EU isn't it's real government?

On November 27 2011 01:15 Mango wrote:
Well after 531 days without a government (the old one was still taking care of running cases though), it seems that Belgium will finally have one in the following weeks. The financial markets pushed them towards one, and let's hope they stabilize now around us.

On November 27 2011 03:05 Skilledblob wrote:
so where is the downgrade of the US?

rating agencies serve no purpose. The only purpose they have is helping the people who pay/bribe them, which are the banks they make ratings about so this whole system is a huge pile of dog crap

On November 26 2011 08:17 maartendq wrote:

On the contrary, we blatantly ignore everything the EU tells us to do. We're in a situation that's not unlike the one in the US. The country is basically split in half: the northern part is rather rightist while the majority in the south is more left-oriented. Neither of them really wants to get along, except for the green parties on both sides, of course. New elections would only make matters worse, so we're actively avoiding them.

All this would not be so bad were it not that we've still got a budget to balance and a deficit of 8 billion euros to get rid of.

BERLIN (Reuters) - German Chancellor Angela Merkel and French President Nicolas Sarkozy are planning more drastic means - including a quick new Stability Pact - to fight the euro zone sovereign debt crisis, Welt am Sonntag reported on Sunday.

The Sunday newspaper reported in an advance before publication that if necessary Germany and France were ready to join a number of countries in agreeing to tough budget discipline.

The report, which echoed a Reuters report on Friday from Brussels, quoted German government sources as saying that the crisis fighting plan could possibly be announced by Merkel and Sarkozy in the coming week.

The report said that because it would take too long to change existing European Union treaties, euro zone countries should avoid such delays be agreeing to a new Stability Pact among themselves - possibly implemented at the start of 2012.

On November 27 2011 03:26 Shymon wrote:


Why would you downgrade the USA atm? The current level of debt is around 100% of the GDP which according to most is still in the manageable range, As opposed to Greece's ratio of 158%. The government is currently very divided but also very stable, there is zero pressure to say rewrite the constitution. and the US dollar is in the middle of a small rally versus the currencies of most of the world including the euro which thanks to Greece and Spain may be in for a sharp downturn. Furthermore the general public has indicated that debt reduction is a major issue for upcoming elections which should (key word here is should) allow the elections of officials who would work to lower the debt of the USA at a national level. Add to all this some positive if slightly conflicting economic indicators; inflation at 3.5%, GDP up 2.5% last quarter, and positive early numbers for consumer confidence and spending. This is tempered by a still high 9% unemployment rate, which has not dropped as fast as other positive indicators would have suggested. However all in all i would still say the overall trend would still not be adverse to the credit rating of the USA as a whole.

As a side note i am not an economist so this is a layman's opinion of the subject.

On November 27 2011 17:18 Maenander wrote:

Why should short term economic indicators matter?

Just a few substantial numbers:

GDP in 2010 (World Bank):
United States $14,582,400 millions
Eurozone $12,174,523 millions

public debt in 2010 in % of GDP:
United States 89.4% according to treasurydirect
Eurozone 85.4% according to eurostat

If the Eurozone can get into trouble, so can the US.

On November 27 2011 19:27 Blix wrote:


The difference is that the FED is allowed to do more than the ECB. I think that the FED will just create money, to limit the interest rate on govt bonds and if necessary prevent default. So banks that hold US bonds don't need to be afraid they don't get repaid. The dollars they receive may worth much less, but that doesn't matter if the obligations are also in dollars. Although obviously the US may get into trouble (i think it already is), the effect on the stability of the financial system should be less severe. But then again, if EU system goes down, so will the US and the rest of the world imho.

Secondly, you shouldn't pool the EU debt like that (although the politicians are trying with their EU-bond abomination), because for example a German does not feel responsible for Italian debt.

On December 01 2011 21:50 Robinsa wrote:

Im going to point this out because I think its important. Almost all of the media saying the Euro is going down is either American or Brittish media as far as I know. I have yet to see any serious arguments for that in the European or Japanese newspapers I read. I think its a way for americans to scare the market and influence it. I wish EU had the same sort of power in the media establishment.

Edit: Neither do I think its possible. Europe will never let the Euro fall. It wont happen.