The Eurozone, or Potential Lack Thereof

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Post Post #25 (ISO) » Sun Nov 13, 2011 4:19 am

Post by TDC »

In post 24, Yosarian2 wrote:
In post 20, TDC wrote:
In post 18, Yosarian2 wrote:
In the long run, though, (once we get out of this crises) I'd expect the more economically poor Euro Zone countries to have a lot of economic growth and eventually catch up with Germany and France on a wealth per capita basis, so long as the countries have good governance. It was already happening with Ireland, Spain, and Portugal, although of course the current recession is going to reverse that in the short run, probably not in the long run.

I wouldn't be that optimistic. While bad governance certainly played a role in getting the Greeks where they are now, I doubt they can reform their way out of this on their own, especially considering the ridiculous austerity measures forced upon them.



Mmm. The thing is, normally it is better during a recession to borrow money and stimulate the economy, but no matter what the rest of Europe did or didn't do, i just don't think that was an option for Greece at this point. After they defaulted on 50% of their debts, there's just no one in the world, public or private, that is going to want to lend Greece that kind of money again.

Which is precisely why the rest of the Eurozone needs to spend some cash. (Cash earned by exporting their stuff to Greece, mind you).
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Post Post #26 (ISO) » Sun Nov 13, 2011 5:18 am

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Yeah, probably true. To an extent, though, you have to be careful you're not just bankrolling a corrupt government in order to allow it to continue being corrupt, which is basically what the loans to Greece for the past 10 years have done.
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Post Post #27 (ISO) » Thu Nov 17, 2011 6:46 am

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Serious question; could someone explain to me why Greece staying in the euro is a good thing?

Leaving the euro gives greece control over it's currency and interest rates which lets them start to devalue / inflate as well as removing quite a bit of burden and instability from the rest of eurozone; seems like upsides to both and Greece can always rejoin a decade or three down the road once they have their house straightened out if they want.

What's the downside for Greece/Eurozone for Greece breaking off?
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Post Post #28 (ISO) » Thu Nov 17, 2011 7:29 am

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In post 27, TheButtonmen wrote:What's the downside for Greece/Eurozone for Greece breaking off?

Banks loose a shit ton of money
Greece acts as the first domino allowing Spain, Italy etcetcetc to do the same. Then see above

And Greece's new currency will likely be somewhat unstable, but I doubt it would be worse than the current situation
Their new loans will be at much higher interest rates

Defaulting worked out pretty well for Argentina. Don't know how applicable it is to Greece though since Argentina defaulted in a "good" world economy.
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Post Post #29 (ISO) » Thu Nov 17, 2011 7:57 am

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In post 27, TheButtonmen wrote:Serious question; could someone explain to me why Greece staying in the euro is a good thing?

Leaving the euro gives greece control over it's currency and interest rates which lets them start to devalue / inflate as well as removing quite a bit of burden and instability from the rest of eurozone; seems like upsides to both and Greece can always rejoin a decade or three down the road once they have their house straightened out if they want.

What's the downside for Greece/Eurozone for Greece breaking off?


Benefits of the Euro go for greece too. Trade is made easier, tourism is encouraged by it. On the other hand you place that they could solve their debt by inflation if they stepped out.

Now, this inflation and stepping out of the Euro would benefit the state, it seems, but wouldn't benefit it's inhabitants. Greece can't have a healthy economy without Europa, this was already so before the Euro. Exporting greek products and tourism always were a huge part of the greek economy. Stepping out of the Euro could very well make things worse.

For the Eurozone it's halfway about reputation of stability. But even more important, to get the money (in Euro's) back from greece. Several banks heavily invested in Greece, loaned them money, and if they wouldn't be repaid, Europa has a big problem. This was the reason they tried to save Greece. Stepping out of the Euro doesn't solve that problem. Either greece decreases the debt by inflation, and the banks don't get their stuff, or the loans have to be repaid in Euro's with a inflated greek currency (which greece won't be able to do).
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Post Post #30 (ISO) » Fri Nov 18, 2011 10:21 am

Post by Yosarian2 »

In post 27, TheButtonmen wrote:Serious question; could someone explain to me why Greece staying in the euro is a good thing?

Leaving the euro gives greece control over it's currency and interest rates which lets them start to devalue / inflate as well as removing quite a bit of burden and instability from the rest of eurozone; seems like upsides to both and Greece can always rejoin a decade or three down the road once they have their house straightened out if they want.

What's the downside for Greece/Eurozone for Greece breaking off?


Greece being in the Eurozone has paid off well for it in the past decade; it's had a lot of economic growth. So have the other poorer countries in the Eurozone. There's very good reason that a lot of people have been trying quite hard to get into the Eurozone; having the single European currency and being part of the huge free trade zone defiantly seems to be good for your economy long-term.

Besides, Greece can inflate their own currency if they leave the Euro zone, but that doesn't actually help the debt problem, because the Greek debt would still be owed in Euroes.
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Post Post #31 (ISO) » Fri Nov 18, 2011 10:25 am

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Anyway, the Euro crises is getting more serious now. Italy, Spain, and even France are seeing their interest rates shoot up.

Meanwhile, there is now very serious talk about a Europe-wide tax being put in place in the near future to support the poorer nations in the Euro zone. Right now they're talking about one on the finance industry, but Britain is balking.
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Post Post #32 (ISO) » Fri Nov 18, 2011 11:00 am

Post by mykonian »

In post 31, Yosarian2 wrote:Anyway, the Euro crises is getting more serious now. Italy, Spain, and even France are seeing their interest rates shoot up.

Meanwhile, there is now very serious talk about a Europe-wide tax being put in place in the near future to support the poorer nations in the Euro zone. Right now they're talking about one on the finance industry, but Britain is balking.


Those interest rates are annoying, but it's silly to assume Italy or France will fall. They simply aren't in trouble, apart from the fact that big investers don't want to loan out money at this point. There is money that can go around, it's that people don't want to. The same goes for the reserves companies have. There is enough, but they don't want to invest it in a market this bad.

And GB has every reason to want to stay out of that. Where the Euro zones inflation is iirc still sitting at 3% or a little lower (3% is the maximum allowed, again, iirc). The pond already hit 5% since the press is working there. While they have a low interest rate right now, GB could very well head into trouble. They wouldn't want to pay taxes in an expensive Euro.
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Post Post #33 (ISO) » Fri Nov 18, 2011 11:27 am

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In post 31, Yosarian2 wrote:Anyway, the Euro crises is getting more serious now. Italy, Spain, and even France are seeing their interest rates shoot up.

Meanwhile, there is now very serious talk about a Europe-wide tax being put in place in the near future to support the poorer nations in the Euro zone. Right now they're talking about one on the finance industry, but Britain is balking.


Yes because by "Europe-wide" they mean almost entirely paid by just Britain.
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Post Post #34 (ISO) » Fri Nov 18, 2011 12:52 pm

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At some point in the future you guys will have to make up your mind about this whole Europe thing and whether you want to be a part of it.
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Post Post #35 (ISO) » Fri Nov 18, 2011 1:53 pm

Post by mykonian »

In post 33, Empking wrote:
In post 31, Yosarian2 wrote:Anyway, the Euro crises is getting more serious now. Italy, Spain, and even France are seeing their interest rates shoot up.

Meanwhile, there is now very serious talk about a Europe-wide tax being put in place in the near future to support the poorer nations in the Euro zone. Right now they're talking about one on the finance industry, but Britain is balking.


Yes because by "Europe-wide" they mean almost entirely paid by just Britain.


Does this come from the idea that Britain is the richest country in Europe? Because you are missing a few then. And the United Kingdom is far from the healthiest country anyway.
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Post Post #36 (ISO) » Fri Nov 18, 2011 1:54 pm

Post by Empking »

In post 35, mykonian wrote:
In post 33, Empking wrote:
In post 31, Yosarian2 wrote:Anyway, the Euro crises is getting more serious now. Italy, Spain, and even France are seeing their interest rates shoot up.

Meanwhile, there is now very serious talk about a Europe-wide tax being put in place in the near future to support the poorer nations in the Euro zone. Right now they're talking about one on the finance industry, but Britain is balking.


Yes because by "Europe-wide" they mean almost entirely paid by just Britain.


Does this come from the idea that Britain is the richest country in Europe? Because you are missing a few then. And the United Kingdom is far from the healthiest country anyway.


No its because the City of London is the financial capital of Europe and that's (purely coincidentally, I'm sure) what they want to tax.
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Post Post #37 (ISO) » Fri Nov 18, 2011 2:00 pm

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oh wait, we are talking about that silly idea that the transactions between banks had to be taxed?

One way to get into a crisis would be to shut down transactions between banks even more.

I thought yos knew more then me on the subject, and had another tax in mind. Because the statement about a tax on banks can't be taken seriously. (It was the reaction of pretty much every dutch analyst I heard about it. It was big language, but it was a thing that couldn't be done)
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Post Post #38 (ISO) » Fri Nov 18, 2011 2:45 pm

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Or we could just expropriate all the investment banks that keep playing with money they don't have. I don't understand why people keep accepting to be screwed over and over again ...
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Post Post #39 (ISO) » Fri Nov 18, 2011 9:58 pm

Post by shaft.ed »

In post 37, mykonian wrote:One way to get into a crisis would be to shut down "transactions" between banks even more.
FTFY
dont think that word means what you think it means
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Post Post #40 (ISO) » Fri Nov 18, 2011 10:01 pm

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In post 39, shaft.ed wrote:
In post 37, mykonian wrote:One way to get into a crisis would be to shut down "transactions" between "banks" even more.
FTFY
dont think that word means what you think it means

FTFY
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Post Post #41 (ISO) » Sat Nov 19, 2011 12:15 am

Post by mykonian »

In post 39, shaft.ed wrote:
In post 37, mykonian wrote:One way to get into a crisis would be to shut down "transactions" between banks even more.
FTFY
dont think that word means what you think it means


You are probably right. Was it clear what I meant?
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Post Post #42 (ISO) » Thu May 30, 2019 8:21 pm

Post by TDC »

In post 34, TDC wrote:At some point in the future you guys will have to make up your mind about this whole Europe thing and whether you want to be a part of it.
Sorry for the deep necro, but hilarious that the UK has still not made up its mind.
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Post Post #43 (ISO) » Fri May 31, 2019 10:31 pm

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prescient stuff
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