The European Debt Crisis and the Euro - Page 132

On June 26 2013 04:52 Restrider wrote:


This happened mainly due to a false sense of security caused by the Treaty of Maastricht. Alas, no one really tried to keep that treaty.

Furthermore, Germany was going through a time of hard social and economical reforms. People feared to lose their jobs and thus did not spend their money and rather saved it, because having no savings or even debts while not knowing whether you have a job next year or not, is something you do not want to be in.
Thus, they kept their money tight on their bank accounts and other financial saving plans. The banks invested in the southern countries, because they tried to get higher interests with low risks. And at that time, the interests for investments in southern Europe were higher than in Germany, but appeared to be as save as in Germany (i.e. Treaty of Maastricht, no risks of currency fluctuations etc.).

On June 29 2013 14:07 aksfjh wrote:

Britain is sticking to it's austerity guns out of fear of embarrassment and Germany is still convinced everybody must be punished for not having a German economy.

On June 29 2013 20:02 SilentchiLL wrote:



As an American you're obviously an expert of both countries and your short, exaggerrated, proofless and extremely simplified version of reality illuminates us all.

On June 29 2013 21:03 aksfjh wrote:

I'm far from an expert on either, but I at least keep up with news and information on both the US and Euro economy. Austerity in high unemployment/depressed economies has shown to screw the economy over much more than help. This is empirical by now. However, Great Britain elected Cameron's government into power, they went full force behind budget cuts and tax increases, and almost pushed their country into a double dip recession. They now carry enormous economic burden and the worst recovery in a long time (possibly ever). If they try to change course, they have to admit they were wrong or risk looking like the politicians they are.

Germany has had a relatively strong economic position simply due to the measures taken to insure their bad loans to the rest of the EU. However, instead of admitting that they lent money without adequately managing risk, they instead blame these borrowers for their "recklessness." Germany has pushed for policies just hard enough to get the money back to their banks, but no more. Any aid that has been given (in loan packages and whatnot) have come with the express rules that these governments need to manage their debt first, then worry about the economy (gee wonder why).

Maybe you could chime in your views on the matter instead of just flaming me (and my nationality).

On June 29 2013 21:03 aksfjh wrote:

I'm far from an expert on either, but I at least keep up with news and information on both the US and Euro economy. Austerity in high unemployment/depressed economies has shown to screw the economy over much more than help. This is empirical by now.

However, Great Britain elected Cameron's government into power, they went full force behind budget cuts and tax increases, and almost pushed their country into a double dip recession. They now carry enormous economic burden and the worst recovery in a long time (possibly ever). If they try to change course, they have to admit they were wrong or risk looking like the politicians they are.

Germany has had a relatively strong economic position simply due to the measures taken to insure their bad loans to the rest of the EU. However, instead of admitting that they lent money without adequately managing risk, they instead blame these borrowers for their "recklessness." Germany has pushed for policies just hard enough to get the money back to their banks, but no more.

On June 30 2013 03:50 lord_nibbler wrote:

No, it is not!
Regardless of what (US) media tries to tell you, almost nothing in economic theory is proven by empirical evidence. In economic 'science' different school of thoughts postulate various assertions and then 'prove' them by selected correlations.
In fact, this whole Austerity strategy also comes from empirical evidence. Namely that no comparable country in recent history went to Greece's level of relative dept and not went bankrupt afterwards (obvious exception is the US, but they have an unbeatable army).
I am not saying, I like the current Austerity strategy, I just want to make clear, that there is no 'proven' or 'right' strategy. And whoever claims to have the sure answer in economic issues is a quack or hides self-interest.


What does GB have to do with the Euro zone problem? Unlike the other Europeans they are the ones that did follow the US and 'printed more money'.


I got some news for you, US is much more into Greece government bonds than Germany. Something like $800 billion or so, if I remember correctly. So why don't you tell Obama that he should waive his claims to help Greece.

It's so easy, to point the finger at the other guy and tell him to man up and take the hit for the team. It's suddenly much harder once you are the the position yourself...

Germany has had a relatively strong economic position simply due to the measures taken to insure their bad loans to the rest of the EU

Germany has pushed for policies just hard enough to get the money back to their banks, but no more.

On June 30 2013 03:50 lord_nibbler wrote:

No, it is not!
Regardless of what (US) media tries to tell you, almost nothing in economic theory is proven by empirical evidence. In economic 'science' different school of thoughts postulate various assertions and then 'prove' them by selected correlations.
In fact, this whole Austerity strategy also comes from empirical evidence. Namely that no comparable country in recent history went to Greece's level of relative dept and not went bankrupt afterwards (obvious exception is the US, but they have an unbeatable army).
I am not saying, I like the current Austerity strategy, I just want to make clear, that there is no 'proven' or 'right' strategy. And whoever claims to have the sure answer in economic issues is a quack or hides self-interest.


What does GB have to do with the Euro zone problem? Unlike the other Europeans they are the ones that did follow the US and 'printed more money'.


I got some news for you, US is much more into Greece government bonds than Germany. Something like $800 billion or so, if I remember correctly. So why don't you tell Obama that he should waive his claims to help Greece.

It's so easy, to point the finger at the other guy and tell him to man up and take the hit for the team. It's suddenly much harder once you are the the position yourself...

On June 30 2013 03:50 lord_nibbler wrote:

No, it is not!
Regardless of what (US) media tries to tell you, almost nothing in economic theory is proven by empirical evidence. In economic 'science' different school of thoughts postulate various assertions and then 'prove' them by selected correlations.

In fact, this whole Austerity strategy also comes from empirical evidence. Namely that no comparable country in recent history went to Greece's level of relative dept and not went bankrupt afterwards (obvious exception is the US, but they have an unbeatable army).

I am not saying, I like the current Austerity strategy, I just want to make clear, that there is no 'proven' or 'right' strategy. And whoever claims to have the sure answer in economic issues is a quack or hides self-interest.

What does GB have to do with the Euro zone problem? Unlike the other Europeans they are the ones that did follow the US and 'printed more money'.

I got some news for you, US is much more into Greece government bonds than Germany. Something like $800 billion or so, if I remember correctly. So why don't you tell Obama that he should waive his claims to help Greece.

It's so easy, to point the finger at the other guy and tell him to man up and take the hit for the team. It's suddenly much harder once you are the the position yourself...

On June 30 2013 03:50 lord_nibbler wrote:
What does GB have to do with the Euro zone problem? Unlike the other Europeans they are the ones that did follow the US and 'printed more money'.

On June 30 2013 04:26 Nyxisto wrote:


That's also false.

http://en.wikipedia.org/wiki/List_of_systemically_important_banks

If you look at the list of the systemically important financial institutions, you will see that only two of those are residing in Germany. Most bail-outs happened in countries that are actually not Germany.(Not saying bail-outs are a good thing or that we didn't do it because it also benefited us) But we didn't just bail-out "our banks".

On June 30 2013 05:31 Melliflue wrote:
I have no idea where you got that figure from. I found this graph on the BBC website:

(source)

The problem is not necessarily what each country has directly invested in Greece, but rather not knowing what the knock-on effects would be.

The BBC did a good explanation of what caused the problems in Europe in an article back in 2011. Link.

Portugal's prime minister says he "won't resign" despite the resignations of two key members of his Cabinet in a spat over country's controversial austerity policies.

Pedro Passos Coelho said in a televised address to the nation late on Tuesday that his government will continue its battle to restore the bailed-out country's financial health.

"I won't give up on my country," he said.

But the government's future is hanging in the balance after the resignation earlier Tuesday of Foreign Minister Paulo Portas, the leader of the junior party in the governing centre-right coalition, in protest against austerity measures.

Passos Coelho said he wouldn't accept Portas's resignation and would seek to heal the rift between the coalition partners.

Finance Minister Vitor Gaspar, the architect of the country's reforms under its EU-IMF bailout, quit a day earlier, complaining he lacked political support for his austerity programmes.

Though Portas did not say whether his party would pull its support from the government, the resignations pitched what for two years had been a stable administration into disarray within the space of 24 hours.

It recalled the political strife that has dogged Greece's efforts to recover from its own bailout.

Portuguese turmoil
Here’s Portugal’s 10 year benchmark punching through 8 per cent to start your morning. We’d note it was sitting at 6.4 per cent on the 1st of this month…


To lose one cabinet minister is bad luck, to lose two in two days… means… time for another eurozone peripheral crisis? The resignation of Portugal’s foreign minister Paulo Portas yesterday has everyone worried, because of his role as leader of the CDS-PP, the junior partner in the governing coalition. If CDS-PP withdrew their support, the government would be left with 108 seats in a 230-seat parliament and uncertain prospects for scraping together a majority.

And all this less than two weeks before a troika delegation is due to start their next review of the economy as the lenders consider whether Portugal will get an easing of terms on its 2011 €78bn bailout, and receive the next €2bn instalment. ...

On June 29 2013 20:02 SilentchiLL wrote:



As an American you're obviously an expert of both countries and your short, exaggerrated, proofless and extremely simplified version of reality illuminates us all.

On July 04 2013 08:04 AbstractSC wrote:
Almost no Greek had any problem with big changes occurring in Greece. Before the huge cuts in salaries and the insane amount of people ending in unemployment, in 2010, a lot of people and probably the majority agreed that if we were to go bankrupt as a country, then yeah OK... we'll pay for that by lowering our monthly wages. The problem is a lot of things were either NOT done at all (like chasing tax-evasion) or they were done without a real plan in a non-democratic way.

So let's stop looking at numbers just as numbers and let's start thinking that behind all those numbers are people's dreams, families, lives. And when you have taken a huge hit to your own life for nothing in return, for so long, and with nothing on the horizon, then I don't see how any of the policies used in Greece "make sense" for an economic point of view.

Secondly, the problem in Europe is no longer ECONOMICAL, as weird as that sounds. We've reached the point where Greece will NEVER, and I really mean NEVER be able to payback the money Greece owes. And the same probably goes for other countries as well. The problem is now POLITICAL.

The solution can no longer by economical means because there's no way to "fix" those numbers. With huge unemployment, and the constant hit both the public and private sector receive, there will never be economic growth, and when there will be, we will need to pay everything we make to cover our debt, leaving nothing for growth.

After WWII, the Marshal Plan was a political solution, that gave the opportunity to Germany to stand on it's feet, and achieve economic growth. The austerity measures are in no way similar to what the Marshal Plan was, and I find it astounding that 2 different plans have been used in the past, with obvious results as to which works, and we're still keep trying to make this terrible plan work.

Lastly, I don't know what the big media in other countries say about Greeks, whether their lazy, corrupt etc etc. but according to an official survey done in 2008, Greeks are the most hardworking people in Europe.

On July 04 2013 08:04 AbstractSC wrote:
Because people post a lot of numbers about the Greek Debt-Crisis, I'd like to make somethings clearer for people not living in Greece, that are not told by popular media around the world.

First of all, numbers are numbers. They do NOT paint the whole picture of what is going on in a country. Almost no Greek had any problem with big changes occurring in Greece. Before the huge cuts in salaries and the insane amount of people ending in unemployment, in 2010, a lot of people and probably the majority agreed that if we were to go bankrupt as a country, then yeah OK... we'll pay for that by lowering our monthly wages. The problem is a lot of things were either NOT done at all (like chasing tax-evasion) or they were done without a real plan in a non-democratic way.

Let's see where we were 3 years ago and where we are now. Today there is approx 67% official unemployment for people between 15-24 years old. The real unemployment (which means taking into account anyone working in the black market or is a college-university student which is searching for a job) is much much greater, which means almost no young person in Greece has any chance of finding any kind of job at all.

So let's stop looking at numbers just as numbers and let's start thinking that behind all those numbers are people's dreams, families, lives. And when you have taken a huge hit to your own life for nothing in return, for so long, and with nothing on the horizon, then I don't see how any of the policies used in Greece "make sense" for an economic point of view.

Secondly, the problem in Europe is no longer ECONOMICAL, as weird as that sounds. We've reached the point where Greece will NEVER, and I really mean NEVER be able to payback the money Greece owes. And the same probably goes for other countries as well. The problem is now POLITICAL. The solution can no longer by economical means because there's no way to "fix" those numbers. With huge unemployment, and the constant hit both the public and private sector receive, there will never be economic growth, and when there will be, we will need to pay everything we make to cover our debt, leaving nothing for growth. Just to paint a picture for you, every new baby born and every young kid that's still going to school, already "owes" more than 10.000 Euros. How do you build a life like that?

So since the solution can only be political, numbers lose their meaning. After WWII, the Marshal Plan was a political solution, that gave the opportunity to Germany to stand on it's feet, and achieve economic growth. The austerity measures are in no way similar to what the Marshal Plan was, and I find it astounding that 2 different plans have been used in the past, with obvious results as to which works, and we're still keep trying to make this terrible plan work.

Lastly, I don't know what the big media in other countries say about Greeks, whether their lazy, corrupt etc etc. but according to an official survey done in 2008, Greeks are the most hardworking people in Europe.



So in my opinion don't blame the Greeks for the situation except for voting the wrong people and not protesting and fighting as hard as they could.
I could probably write a lot more on the subject but I don't want to make a huge post.

On July 04 2013 08:04 AbstractSC wrote:
Because people post a lot of numbers about the Greek Debt-Crisis, I'd like to make somethings clearer for people not living in Greece, that are not told by popular media around the world.

First of all, numbers are numbers. They do NOT paint the whole picture of what is going on in a country. Almost no Greek had any problem with big changes occurring in Greece. Before the huge cuts in salaries and the insane amount of people ending in unemployment, in 2010, a lot of people and probably the majority agreed that if we were to go bankrupt as a country, then yeah OK... we'll pay for that by lowering our monthly wages. The problem is a lot of things were either NOT done at all (like chasing tax-evasion) or they were done without a real plan in a non-democratic way.

Let's see where we were 3 years ago and where we are now. Today there is approx 67% official unemployment for people between 15-24 years old. The real unemployment (which means taking into account anyone working in the black market or is a college-university student which is searching for a job) is much much greater, which means almost no young person in Greece has any chance of finding any kind of job at all.

So let's stop looking at numbers just as numbers and let's start thinking that behind all those numbers are people's dreams, families, lives. And when you have taken a huge hit to your own life for nothing in return, for so long, and with nothing on the horizon, then I don't see how any of the policies used in Greece "make sense" for an economic point of view.

Secondly, the problem in Europe is no longer ECONOMICAL, as weird as that sounds. We've reached the point where Greece will NEVER, and I really mean NEVER be able to payback the money Greece owes. And the same probably goes for other countries as well. The problem is now POLITICAL. The solution can no longer by economical means because there's no way to "fix" those numbers. With huge unemployment, and the constant hit both the public and private sector receive, there will never be economic growth, and when there will be, we will need to pay everything we make to cover our debt, leaving nothing for growth. Just to paint a picture for you, every new baby born and every young kid that's still going to school, already "owes" more than 10.000 Euros. How do you build a life like that?

So since the solution can only be political, numbers lose their meaning. After WWII, the Marshal Plan was a political solution, that gave the opportunity to Germany to stand on it's feet, and achieve economic growth. The austerity measures are in no way similar to what the Marshal Plan was, and I find it astounding that 2 different plans have been used in the past, with obvious results as to which works, and we're still keep trying to make this terrible plan work.

Lastly, I don't know what the big media in other countries say about Greeks, whether their lazy, corrupt etc etc. but according to an official survey done in 2008, Greeks are the most hardworking people in Europe.



So in my opinion don't blame the Greeks for the situation except for voting the wrong people and not protesting and fighting as hard as they could.
I could probably write a lot more on the subject but I don't want to make a huge post.