EPTThe European Debt Crisis and the Euro - Page 28
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Velr
Switzerland10717 Posts
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Sated
England4983 Posts
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Velr
Switzerland10717 Posts
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DND_Enkil
Sweden598 Posts
The most advocated solution here by experts are the same as given in The Economist, debt reduction. However at least my impression is that most common folks such as myself do not think it is fair to cut the debts letting international banks, thier customers (essentially anyone who pension-saves in any bank in EU since they all borrow money from each other) and taxpayers of other countries pay the bill for what Greece essentially brought on themselves. While i think most can see that globally and for Greece the best solution would be to reduce thier debts, the moral implications still favor letting them sweat it out themselves. Also, there has been several "on the streets"-interviews from the streets of Athens and most swedes are... lets just say less than impressed with what the common views are from Greeks. Blaming everyone but themselves, its Germanys fault, its Eu's fault, its the Politicians fault etc. I can not see the Euro-cooperation working long-term, EU will move on but with less power behind it. As for the future of Greece i have no idea, since from the interviews of common greek people i have read they seem to completely blame someone else and fail to realise that the biggest fault is the corruption that has infested the country all the way from the bottom and up. They need to stop blaming the politicians and start working together, stop the widespread common corruption (taxes and systems buildt on bribes) and rebuild from the bottom up. The middle class is commonly considered the backbone of a country, they are slowest in changing opinions, resisting change, not prone to risks by corruption or breaking laws and carries a countrys ecnonomy. The problem in Greece seem to be that the middle class does not consider tax-evasion and bribes as a risk to be avoided, but something to strive for. This mentality then spreads upwards until politicians find it natural to lie to is population and to EU about figures and whatever they think they can get away with. If Greece can come to terms with its corruption they can turn things around, but it has to start in the middle class not from the top. This is all based on my impressions and what i have read in Swedish media ofc... | ||
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arbiter_md
Moldova1219 Posts
On June 28 2011 20:43 -Archangel- wrote: Croatia is "soon" to join EU and all our politicians have their whole campaigns based around this. Of course none of the newspapers and TV stations talk about this whole problem around Euro. We are being kept in the dark what is really happening while politicians and media tell us each day that this is the only choice and that all will be better once we join LOL Joining the EU doesn't mean joining the Euro monetary union. You will have your currency for a while. Hopefully until then, the necessary changes will be applied so that the whole system works better. The system is definitively flawed if every country can borrow just as much as others give them. Since it's a unique monetary system, the unique organization should allow individual countries to sell monetary obligations. | ||
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-Archangel-
Croatia7457 Posts
On June 28 2011 20:55 Maenander wrote: The EU and the Euro are two different things. They are connected. Fall of Euro might as well cause the fall of EU | ||
zatic
Zurich15328 Posts
On June 28 2011 20:32 caruso wrote: I just hope it takes a couple more years, I don't want to experience any major war. Most Germans still seem to think the EU and the Euro especially guaranty us peace. Not only that, but it goes to the point where many people here seem to think the EU is the ONLY keeper of peace, and open war breaks out as soon as it is abolished. I just don't understand where most of my fellow men get this ridiculous concept from. The whole Euro situation looks pretty dire, but war should be the last thing we should worry about. | ||
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Sated
England4983 Posts
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DarQraven
Netherlands553 Posts
On June 28 2011 21:05 -Archangel- wrote: They are connected. Fall of Euro might as well cause the fall of EU EU (political, judicial) and EMU (monetary) are two different entities. One has existed without the other for decades. | ||
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Dakk
Sweden572 Posts
Maybe i am not seeing the full extent of the issue ? | ||
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Brotkrumen
Germany193 Posts
On June 28 2011 19:43 shell wrote: What makes me angry is that the ratings companys that rate Portugal, ireland, Island, spain and italy has almost trash and Greece has worse then trash are the same shitty companys that rated Mr. Madoff has AAA+, never saw the subprime bubble and rated AIG and all other americans company AAA+!! True. Damn them private companies for giving out ratings! Only a fool would base legislation on the information a private company gives out! Oh wait, america did that... Did you know that the US gov required certain funds to only invest in AAA rated investments? On June 28 2011 19:43 shell wrote: Guess what they don't know shit and they are slaves of wall street! They made lots of mistakes but people still care about them and give them credit! Fuck those companys they are lobbists and completely biased to protect USA interests.. They will fuck in EU anytime they can! Well, they are a private company providing a service for companies on wall street. So if by "slaves of" you mean "have a business-customer relationship with" you are perfectly right. On June 28 2011 19:43 shell wrote: If we had a strong political structure we would just create our own and outlaw the american ratings agencies! And btw rating agencies should be annexed to a central bank.. not to private companys and lobbyism Or you could just ignore the information a private company gives out and do your own analysis. But wait! Any government institution that would have to do that, would be under political pressure to give out certain ratings for certain things. On June 28 2011 19:43 shell wrote: This is what shows the world that european union is weak because we can't get along! Germany thinks greece and Portugal for instance don't deserve their help but they never said anything about our state before because it was good for them.. everything they produce they sell it to us and they abuse our economic benefits to install factorys in our countrys paying way less then they had to pay in germany and less taxes and when things get a little tought they bail and put thousands on unemployment! They stop agriculture in our countrys to sell us theirs. Nobody "deserves" anybodies help. If you fucked up, which the PIIGS certainly did, they should resolve their issues on their own. Why? Because if big daddy EU always bails them out, they will keep doing it. It was never just good for Germany. It was always mutually beneficial. Portugal could have benefited economically and the entry into the EU saved Greece from a totalitarian regime. You can thank your politicians for bowing to interest groups to stay in power instead of forcing the economy to change. "they put factories in our country". So, complaining about jobs now, are we? "they bail out when things get tough" Closing down factories when they become uneconomic is so evil! They should rather ask the Portuguese Government for tax breaks and subsidies so keeping them open pays off! Otherwise Portugal would lose the jobs you complained about just a bit earlier! "They shut down farming" Seriously, farm subsidies are required by european law to be similar in each country. Personally I'm against subsidies, but if they exist and Portugal, a better farming country than Germany, gets outcompeted by Germany, whose fault is that? Besides, as I am usually eating fruits from Spain and Portugal, I doubt that your view is accurate and is probably just populist propaganda. On June 28 2011 19:43 shell wrote: The world is unfair and fucked up! It's true our politicians suck and we have a culture for corruption.. but don't you ever think we deserve this because our people work less and don't deserve the social benefits we fought for ages! "We have a culture for corruption but we want our slice of the pie!" Instead of complaining, you could just start going to the streets to demonstrate for corruption free and efficient government. But no, you want money redistributed to you. I guess that's easier. Maybe that's the source of your economic problems? On June 28 2011 19:43 shell wrote: Germany is a great country we all know that and so is france but don't you ever believe you would be better before the EU! Portugal was growing more then 20% before it entered EU and then we became a "satelite" country where you would pay us to produce less and eventually stagnated... No, they are not. Same political bullshit everywhere. Fearmongering and "Give me money for votes"-mentality. I'd like to see your 20% growth rates though. From 1985 on, Portugals growth rate jumped between 0% and 7%, averaging at 2% a year. On June 28 2011 19:43 shell wrote: If you guys want to end this.. just end it but what i would want is a strong european union instead of a germany/france/uk and it's 20 buddys! The world is unfair we all know that but come on.. sending countrys to poverty for some more bucks? Yes, the rich send the poor into poverty to make more money. Never mind that trade is not a zero-sum game. Comparative advantage, read it. | ||
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Brotkrumen
Germany193 Posts
On June 28 2011 21:12 Dakk wrote: Personally, i am not that worried. I can not see how this crisis over in greece can affect my life BIG. And maybe that is a little bit self sentered, but that is how i think. Maybe i am not seeing the full extent of the issue ? Well, we could be heading into a Great Depression if credit markets cease up after a Greece default... That would affect everyone as banks are not national anymore but international. | ||
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Sumsi
Germany593 Posts
On June 28 2011 21:08 zatic wrote: I guess the reason is that the Euro and the EU have been established during peaceful time after WW II.Most Germans still seem to think the EU and the Euro especially guaranty us peace. Not only that, but it goes to the point where many people here seem to think the EU is the ONLY keeper of peace, and open war breaks out as soon as it is abolished. I just don't understand where most of my fellow men get this ridiculous concept from. The whole Euro situation looks pretty dire, but war should be the last thing we should worry about. Most people and politicians think now that there is some kind of correlation while I think it's just a fallacy in terms of logical thinking. When two things happen at the same time it does not prove that there is any correlation at all between them. | ||
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Necrophantasia
Japan299 Posts
Debt helps all of us get rich faster. It's true. The only problem here is that debt is growing at an unsustainable level, i.e. the return on investment from the debt is not rising as fast as the level of debt. THIS is the problem. The total quantity of debt that a country has is for all intents and purposes irrelevant. YES, we can live forever making loans, so long as the money we make off of the loaned money exceeds that of the interest rate. This is the whole idea behind the modern economy. The US rating agencies aren't biased. The USA has a much better rating than Greece because of a variety of reasons. The simplest of which is that the USA has growth factors. The economy has sources of growth. It has competitive industry. Greece on the other hand has no competitive industry, it has no viable private sector, and the public sector will be falling to pieces with the austerity measures. Greece has nothing to propel its GDP forward to push the growth rate above the interest rate on the debts. The USA does. If Greece defaults, which it most likely will rather than risk a further loss of sovereignty, the most obvious consequence is that several major French and German banks stand poised to fail. Greece will be forcibly ejected from the EU, and there will likely be a short term massive hike in costs of borrowing in the region, though in the long term it return to normal. Greece will wallow in its misery for a long time to come, but the currency union is unlikely to collapse. Though whether this event will trigger the rest of the PIIGS to take measures that could harm the union is yet to be seen. ]I guess the reason is that the Euro and the EU have been established during peaceful time after WW II. Most people and politicians think now that there is some kind of correlation while I think it's just a fallacy in terms of logical thinking. When two things happen at the same time it does not prove that there is any correlation at all between them. No, that's not the reason. The reason is that the EU has caused everyone in Europe to be everyone else's major trading partner. With a united currency, everyone is everyone else's major banker. Money always talks, and if going to war with your neighbour leads you to financial ruin, that's probably the greatest incentive you could have out of everything to not go to war. | ||
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-dash
Netherlands103 Posts
On June 28 2011 21:17 Sumsi wrote: I guess the reason is that the Euro and the EU have been established during peaceful time after WW II. Most people and politicians think now that there is some kind of correlation while I think it's just a fallacy in terms of logical thinking. When two things happen at the same time it does not prove that there is any correlation at all between them. You should read up about the ECSC. | ||
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zatic
Zurich15328 Posts
On June 28 2011 21:18 Necrophantasia wrote: No, that's not the reason. The reason is that the EU has caused everyone in Europe to be everyone else's major trading partner. With a united currency, everyone is everyone else's major banker. Money always talks, and if going to war with your neighbour leads you to financial ruin, that's probably the greatest incentive you could have out of everything to not go to war. The EU has not caused us to trade. Every country on the planet wants to trade with their neighbors. The EU certainly helped that, but is not a requirement. Much less the Euro. So as long as we remain trading partners there is no reason peace would be bound to the EU as an institution. Which is what most Germans seem to believe. Why aren't we in open war with Norway or Switzerland I wonder? | ||
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CursedRich
United Kingdom737 Posts
On June 28 2011 21:08 zatic wrote: Most Germans still seem to think the EU and the Euro especially guaranty us peace. Not only that, but it goes to the point where many people here seem to think the EU is the ONLY keeper of peace, and open war breaks out as soon as it is abolished. I just don't understand where most of my fellow men get this ridiculous concept from. The whole Euro situation looks pretty dire, but war should be the last thing we should worry about. The Euro and EU were conceived by Germany and France to extend socialism to the whole of Europe and allow them to try to run Europe (at least this time neither country tried to invade anyone), there are of course many benefits to extending trade agreements and having common standards and laws but the EU is joke to many British who dont really care about it at all. The only real benefit to our daily lives this has brought is easier travelling through other EU nations borders. The truth of the matter is what decisions are right for the UK are not necessarily right for people in Belgium and vice versa (just using Belgium as an example) as this is highlighted now that countries are not allowed to set their own economic policies on currency etc in this time of need of drastic action. Why will the UK be better off than many in this current financial climate? because we joined the EU and not the Euro and therefore have retained our right to set our own fiscal policies and control our currency. | ||
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iFU.pauline
France1571 Posts
On June 28 2011 20:51 Goragoth wrote: Let me guess, you are one of those nutters who thinks that a debt fuelled fiat currency cannot work and that returning to the gold standard is a sensible option? At least it sounds like that is what you are saying, in which case you are a complete moron. The system isn't fundamentally broken, its just going through a regularly scheduled adjustment period (recession) which will hurt some people in short run before returning to normal. It really isn't the apocalypse. "you are one of those nutters who thinks that a debt fuelled fiat currency cannot work" Actually yes, I believe fiat currency cannot work in the long run. "returning to the gold standard is a sensible option?" An option for what? An economic system with gold standard is actually safer yes, since the money supply is backed up by something that is real (world gold reserve), but for me, anything that is monetary based isn't an option, please don't call me utopian... "The system isn't fundamentally broken, its just going through a regularly scheduled adjustment period" I believe the system is fundamentally broken, and that these "regularly scheduled adjustment period" are the proof of it, and that ultimately it will fail. And sooner or later, we will have to replace this system with a new one. "It really isn't the apocalypse" No it isn't. | ||
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Sated
England4983 Posts
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HEhatesusall
Greece76 Posts
On June 28 2011 21:02 DND_Enkil wrote: It is getting pretty big coverage in Sweden at least. The most advocated solution here by experts are the same as given in The Economist, debt reduction. However at least my impression is that most common folks such as myself do not think it is fair to cut the debts letting international banks, thier customers (essentially anyone who pension-saves in any bank in EU since they all borrow money from each other) and taxpayers of other countries pay the bill for what Greece essentially brought on themselves. While i think most can see that globally and for Greece the best solution would be to reduce thier debts, the moral implications still favor letting them sweat it out themselves. Also, there has been several "on the streets"-interviews from the streets of Athens and most swedes are... lets just say less than impressed with what the common views are from Greeks. Blaming everyone but themselves, its Germanys fault, its Eu's fault, its the Politicians fault etc. I can not see the Euro-cooperation working long-term, EU will move on but with less power behind it. As for the future of Greece i have no idea, since from the interviews of common greek people i have read they seem to completely blame someone else and fail to realise that the biggest fault is the corruption that has infested the country all the way from the bottom and up. They need to stop blaming the politicians and start working together, stop the widespread common corruption (taxes and systems buildt on bribes) and rebuild from the bottom up. The middle class is commonly considered the backbone of a country, they are slowest in changing opinions, resisting change, not prone to risks by corruption or breaking laws and carries a countrys ecnonomy. The problem in Greece seem to be that the middle class does not consider tax-evasion and bribes as a risk to be avoided, but something to strive for. This mentality then spreads upwards until politicians find it natural to lie to is population and to EU about figures and whatever they think they can get away with. If Greece can come to terms with its corruption they can turn things around, but it has to start in the middle class not from the top. This is all based on my impressions and what i have read in Swedish media ofc... Well, long story short. The history of greece is closely attached to our debt. Ever since we became and "independent" state our "protectors"(including UK,Russia,France) "lended" the "people" money. In reality for every 100 pounds they lended, they gave 50 to the state(while the state payed interest for all the 100 pounds). From those 50 pounds, UK banks grabbed a singificant chunk as the man-in-the middle, and only ~20-30% of the initial loan ever came into greece. From that money, ALL of it went on getting some people rich, while 99% of the population lived in horrible conditions. For those "independency loans" we went bankruptat ~1830(i believe it was at 1829). After that great political pressure was applied to greek governments to repay those debts. Finally at ~1890 our "protectors" staged a war with the ottoman empire(turkey) (the so-called 3 day war-opera) so that they could enforce the "global economic control"(crude translation from greek) at 1893, where greece lived a nazi-like occupation from our "protectors", counting thousands of dead ppl from the army the protectors brought to athens to reinforce that control. But the debt was so huge, and the economy was SO underdeveloped(exactly 0% of the loans were spent on building a strong economy) that no matter how much pressure was put into greece's government, we just didnt have enough money. Constant pressures from our lenders to pay back their loans led to the third greek default in 1932(which btw was because we were, for the second time in our history, at a "strong-stable currency", the golden british pound). Even after the WW2 and the civil war, when greece was burned to the ground(greece had the second worst casualties from WW2 compared to its population of all the allied countries) not only the allies didnt delete our pre-war debt(like they did for example at western germany), but they forced us a) to pay ALL loans(from 1830) to their full(even though we had defaulted twice for those loans) b) to quit from ALL our german war reperations The final "arrangement" for the greek debt took place in ~1960 where greece was forced to: a) Repay ALL its debt from 1830 to its fullest(even though we had payed 3/4 of some loans we were forced to pay AGAIN the sum of those bonds) b) Increase the ammount of money we owed by the inflation c) Increase the ammount of money to be payed by 70%!!!!!! because of the .....suffering we caused to our lenders.... Not even ONCE was greece EVER allowed a rest from its debt. We are currently paying capitalised interest from loans made back in 1850-1930. How can a country ever create a strong economy on those grounds? USA deleted ALL its debt 2 or 3 times in its history. Germany did too(after WW2). Well,i think i made a point here(the actual story is much more complicated that than and cant be done on a forum). | ||
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