Conspiracy and the euro
I have reported from many countries where crises are blamed on "foreign hands". More often than not they are unnamed. Indeed these sinister conspirators can have greater credibility if they remain in the shadows.
Sometimes the conspirator is identified. After the recent anti-government demonstrations in Iran, officials blamed British intelligence for stirring up the mob.
Now with the euro facing its severest test, some see conspiracy here too. The Greek Prime Minister, George Papandreou, when talking to his domestic audience, said that his country had become "a laboratory animal between Europe and the markets". The message to the Greek people is that speculators are to blame.
The cry has been taken up by the Spanish Public Works Minister, Jose Blanco. "None of what is happening in the world," he concludes, "including the editorials of foreign newspapers, is coincidental or innocent".
Spanish papers report that the country's National Intelligence Centre is looking into "speculative attacks on Spain". Thrown into this inquiry is "the aggressiveness of some Anglo-Saxon media".
As the conspiracy unfolds, the plotters emerge as "Anglo-Saxon" speculators. Some French commentators are drawn to this scenario. It's the Anglo-Saxon banks and hedge funds who are behind the euro crisis, is their conclusion. Indeed, one French commentator was quoted as saying "those who played against Greece will pay dearly. The European Union states now view this as direct aggression against them."
Even the head of the 16-nation Eurogroup, Jean-Claude Juncker, is drawn to the idea of the euro as victim. "We shouldn't accept to be the target of financial markets," he says. "I am concerned," he goes on, "at the irrational way of behaving of financial markets".
In the UK, Labour MP and former Europe Minister Denis MacShane writes that "the Anglo-Saxon club of anti-Europeans is on the rampage".
So the plot seems to be this: that some Anglo-Saxon "hedgies" are targeting the euro, egged on by a supporting cast of anti-European scribes.
So what do we know?
It is true that speculators have raised their bets against the euro. It is reported that the Chicago Mercantile Exchange, which reflects hedge fund activity, has witnessed growing positions being taken on the euro falling further. It is, however, what foreign currency trading is all about. As Charles Grant of the Centre for European Reform points out, "people take bets on currencies - if they overreach themselves they go bust".
Regardless of conspiracies, however, there are some real, fundamental problems. Firstly, the Greek accounts were exposed as fakes. When its deficit shot up, financial markets feared the huge public debt may cause it to default. That is not just a judgement by markets - senior officials in Greece believe that too. The Greek Finance Minister, George Papaconstantinou, admits his country is in "a terrible mess". Confidence in Greek accounting has not yet returned.
There is little faith either that the Greek government can implement its austerity plans. Only today Greek customs officials walked off the job for three days in protest at the spending cuts. Fuel truck drivers may join in. The message from the meeting of European finance ministers today was that Athens "must surpass expectations (in its spending cuts), and so far they have not done so".
Secondly, no one yet knows the details of how any bail-out would work. The uncertainty plays on market fears. Greece wants the EU to set out how any potential rescue would function. Several key countries including Germany don't yet want to show their hands. They are giving Greece until 16 March to show it is making progress with its austerity plan. If it isn't, they may insist on Athens taking harsher measures, including raising VAT.
It is worth noting that the IMF will have a strong and possibly growing role in monitoring and advising the Greeks on their plans.
Thirdly, Germany is willing to play the longer game because politically any bail-out would be very difficult to sell at home. The German people don't want it. Charles Grant says, however, he is certain that in the end Germany would act to prevent Greece defaulting. After all, it has signed up to a statement to "defend the stability of the euro". He says it is "understandable" at this stage that Germany wouldn't want to be too "explicit" about its plans, but who exactly will do the bail-out remains unclear.
Fourthly, there are the imbalances between the countries in the eurozone. They cannot be wished away. Germany, for instance, has a tight wage policy. It relies on exports for growth and does well out of the eurozone. But Southern European countries can't export their way out of recession when domestic demand in places like Germany remains so weak. And it is highly unlikely that Berlin will loosen its policies to save the Greeks.
Fifthly, there are widespread doubts among those who support the euro that it can survive in its present form whilst fiscal policies are decided at the level of national governments.
So as Nicolas Veron of the Bruegel Institute says "the markets are testing the limits of the single currency policy framework".
So conspiracy? The markets are giving the euro a severe stress test because they suspect there are real flaws and uncertainties that have not been addressed.
The respected economist Paul Krugman had a take on all this today: "The real story behind Europe's troubles lies not in the deficit but in the policy elites, who pushed the Continent into adopting a single currency well before the Continent was ready for such an experiment."
I'm 
~RS~q~RS~~RS~z~RS~45~RS~)
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Oh, the speculators are the culprit. Maybe in the future we can avoid wars by assigning our enemies to speculators, and slowly bring those governments down by creating an economic chaos in them. Not so, though. Greece, the birthplace of democracy, suffers from the typical malaise of democratic practices: Politicians are elected on promises to give more to their constituents, until the country's Treasury bottoms out! It happened here with Barack Obama, too, but the U.S. economy is big, and it will be easier to recover, whereas Greece's economy is small, and without any reserve fat to sail through turbulent times. And constant borrowing by Greece could not go on forever, especially during this global slump that even Venezuela which is rich in oil going through power blackouts.
Greece's economy had worsened in the recent years, and current prime minister George Papandreou exploited the situation by placing all the blame on former prime minister Konstantine Karamanlis, and won the election with a landslide. By he achieved that by making many promises -typical of all politicians- that he knew he could not afford. Now he wants to make a U-Turn on his promises, but the Greeks won't have any of it! The Greeks are locked in a vicious cycle of: a) Raises promised by politicians. b) Raises bring higher prises - the so called "Timarithmos" in Greece. c) Higher promises brings strikes for more raises to offset the higher cost of living. d) More raises, higher "timarithmos again," and the Greeks complain constantly about "life being too expensive and unaffordable! And until Greeks come to accept "economic stability and steady economic growth" as a way of living, the specter of timarithmos will always be there to haunt them!
As a native Greek myself, I sincerely think that what happens to Greece now is a "good thing." And I hope it will help Greeks to change their political culture, even though I don't see it happening. But they do need a "Shock and Awe" economic punch to help them understand that living on foreign borrowed money is not a blessing but a curse. Nikos Retsos, retired professor
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French commentators always blame the ‘Anglo-Saxons’, it’s a national sport in France, as are conspiracy theories. All that’s bad comes from elsewhere and it’s always someone else’s fault.
It’s astonishing that even though the Greek’s fiddled the books, the blame is now being placed on speculators. So the reasoning within the Euro club appears to be that dishonesty by its members is a far lesser sin than the truth when being voiced by the hated ‘Anglo-Saxons’.
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I've been data-mining stories about the fiscal crisis for our blog, and have had the impression over the last while that the mainstream media has indeed launched the occasional genuine attack against the integrity of the EU. Ambrose Evans-Pritchard at the Telegraph doesn't really count because he's a known quantity.
One Feb 14th Reuters story that seemed disturbing was titled "Germans say euro zone may have to expel Greece: poll." Earlier, there was the WSJ on Dec 22nd with the stark "Moody's Downgrades Greece," where that story URL got softened to "Greece Welcomes Rating News" the next day.
And of course there's extensive coverage of Wall Street's dominant investment bank's acknowledged mischief in this space, for example the WSJ blog post from a few minutes ago "Outrageous But Legal: EU Knew Goldman Sachs Helped Greece Use Derivatives to Conceal Deficits"
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What a joke it would be for the Euro Elites blaming it upon the Anglo-Saxons if were not the case that the Euro Elites were not so serious.
Europe is not ready for becoming unified under supranational government nor were all of the Eurozone nations economically stable enough to participate in the Eurozone without their being some risk of collapse of trust in the currency at some stage.
The Eurozone was built too rapidly and brought in too many weak economies and even some of those known-to-be-weak economies concealed just how weak they were because of the benefits they perceived would be generated by tapping the EU for funds and having wealthy allies perpetuate the myth of the Euro being a strong currency. Those weak economies have now been shown to be weak, and/or extravagant and/or fraudulent and they will be such a drain on the rest of Europe that not only is the Euro at risk of collapse but even the EU could flounder under the angst and recriminations that are going to be bandied about as the Eurozone leaders seek to blame anyone but themselves for the catastrophe that was the only thing that could be guaranteed to happen once the sun stopped shining on the global economy.
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Well..
..if one would think that bankruptcies of both Lehman Brothers and Bear Stearns weren't just accidents but they were purposely driven into bankruptcy via naked short selling, then one might have some doubts about the resent events that have unfolded.
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Those who wish to blame the so-called speculators should always remember that speculators are there to make money, not to merely speculate. The only way they can make money is if there is a difference between what is and what should be or conceivably could be,in other words, a real dissonance, that can be exploited.Greece (the government policies, the misreporting,the corruption,etc.) created this situation, nobody else. Just as the sharks cleanse the ocean when there is blood in the water, the speculators restore proper values, though that in itself, of course, is not their motivation. Some speculators overreach and get punished. ( The old "be a bull or bear but don't be a PIG"- pun intentional).
You don't see speculators attacking the Swiss franc, do you? Why? Not because they like the Swiss more than the Greeks but because the Swiss keep their economic house in order and any speculator against the franc would be bloodied, not even by the Swiss government, but eaten alive for a profitable meal by other market participants taking the opposite position on the franc.
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Now, to put things into perspective, 1 Euro currently buys around 1.37 dollars which is almost exactly halfway between the 52 week low (1.25 ) and the 52 week high (1.51). Not exactly the 'falling off a cliff ' performance that some commentators would have you believe.
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The issue is another good example of the 'no European demos' thesis in action. Without a strong nation-like solidarity EU policies are only acceptable to electorates when they are "win-win" scenarios to the mutual benefit of each and every national 'demos' that takes part. The common market is such an example of a "win-win" scenario because each nation that participates in the Single Market benefits from free-trade and the additional degree of specialization (and therefore productivity and wealth) that a Continent-sized economy allows relative to a national economy. But re-distributive policies (such as Germans bailing out the Greeks) can never be a "win-win" scenario. Some people must pay and others will benefit whenever we talk about transfers of money. Redistribution (other than international aid which is motivated by charity) is inherently a "win-lose" scenario that is only accepted when the winners and losers are part of the same national demos. East and West Germans were part of the same national demos in 1989 so West Germans were prepared to pay for East Germany. But they are separate from the Greek demos who they do not want to bail out now.
Almost every unpopular EU policy is either (like the CAP) a "win-lose" re-distributive policy that is perceived as unfair or one (e.g. the Working Time Directive) where the EU policy is viewed as an unwarranted interference in the internal affairs of one national demos which can never be legitimated by a qualified majority of other European countries.
The problem for the EU is not only that it increasingly tries to focus on "win-lose" issues that are unacceptable in the absence of a European demos. The emergence of a world market increasingly obsoletes the old European common market by making even higher levels of productivity and wealth possible through global economies of scale than any 'mere' Continental market can provide. The EU is therefore caught in a trap where it’s earlier popular “win-win” policies now move to the global level leaving it struggling to find any new ones where it can remain relevant.
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Country overspends on projects from capital to Current account. Ignores EU/IMF reports. Allows property bubble. Belatedly reins in tax avoidance endemic.All wages go up. GNP falls 16% from 2008 Its Greece? No - Ireland 2006-9. Response- personal tax rises, gov depts told to freeze spending,Public sector wage cuts, unions threaten strikes but go for mild option, gov confidence alltime low, public spending plunges, banks bailed out, loses AAA dept rating. Markets accept there is a plan, gov bonds yield narrows to Germany, gov rating flatlines, GNP stops falling as fast. If Ireland can do it so can Greece. Nobody lends to a friend if they have not accepted they have a problem and that they walk to walk not talk the talk.
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Isn't it a bit of both? Mismanagement and bad accounting (egged on by voodoo accounting wheezes from US banks?) as well as doom-laden speculative betting that become a self-fulfilling prophecy sliding down the ever-greasier pole, rats abandoning the Greek economy...
What is true is that financial markets are supremely disinterested in where or how they make a dollar or two, and even less interested in the mayhem resulting from their distant schemes. And that the Euro launched without the means to steer it is bound to have some problems staying off the rocks even on a calm day, let alone the scary hurricanes and squalls of the current season
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Northern Europe has always imposeed itself on Southern Europe, but the culture and the climate either change them or send them home. The bankers want to blame everyone but themselves for the problems and they have any number of politicans who will do that bidding. Uniform countries might be good for business and banking but it kills culture and civilization. The lack of clean hands makes this all distasteful for everyone.....when you do the bidding of the bankers you will always look bad in public....no one beleives them any more.
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Re 4: Menedemus... the blame is simply put to those who in Greece for 35 years worked knowingly and consistently (and oh no... it is not just a local mafia trying to become rich! it would be too simple!)to bring the situation there and above all the blame goes to those that for some reason had not delegated the Greek economy 15 years ago, 10 years ago, 6 years ago (Olympics!!!!! I mean ... mercy! ... the country over-borrowed to do chimeric fiestas - but no delegation...). And it comes now. There are various explanations for it of course, but obviously they have little to do with this particular country itself.
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gavin, you're absolutely right that this is a chase against speculators who are just, well, speculating on the Euro.
However, we have to be careful about putting Greece in the dock for "off balance sheet" accounting methods. Just about every country in the EU (and beyond) uses PPP and/or PFI and/or something similar. These handy tools offload debt onto the private sector, leaving a heavy repayment load to be carried by taxpayers well into the future. So, the real debt is hidden but the repayments appear as revenue costs. If the real debt incurred by such deals were to be revealed in national accounts, then many countries around the world might find their credit ratings under stress.
Maybe the Greek problem could provide a spur to new accounting rules applying to EU nations?
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If they don't like conspiracies then they shouldn't have conspired against the democratic rights of the British people and forced the Lisbon Treaty down our throats.
I presume that the Lisbon Treaty is to some extent responsible for this mess in that, by its behaviour, the "EU" made it clear to the people inside it and to the world in general that it is a Grade A Crock of Nasty.
They made it clear that in some way or other their despicable behaviour would lead to trouble. Many people will have concluded that the "EU" was not a good place to invest in.
For very many years people in the UK have boycotted French goods and the goods and services of companies operating in the UK which supported European integration. Lists of such companies were made available. I have reason to doubt the accuracy of such lists. I presume that this sort of thing will have increased given the fury in the UK over the imposition of the Lisbon Treaty.
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' In the UK, Labour MP and former Europe Minister Denis MacShane writes that "the Anglo-Saxon club of anti-Europeans is on the rampage". ...'
Of course we are. People like him have given us away as slaves to the "EU"-Dictatorship.
BTW, we (or at least I) ain't "ant-European", just anti-"EU".
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Who are the three people in the picture?
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The moderators here will not allow me to post the full glory of my anti-"EU" views. They have removed truthful statements in the past.
What I post here is mild compared with what I really think.
What I really think is mild compared with what others think.
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"As the conspiracy unfolds, the plotters emerge as "Anglo-Saxon" speculators."
Oh how frustrating to learn we had such power and didn't use it long ago. What excuse will we hear that our all powerful currency gods have waited until this moment? Why? Why? Why? Well all I can say is better late then never. Perhaps I'll jump on the bandwagon and short the Euro myself, surely there's a hedge fund I can get into before the real fun begins. Now where the number of my broker. I want to be a co-conspirator too :-)
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There are only two instances where speculation is bad. When others speculating are making money and you aren't. When you are speculating and are losing money.
I guess the people in Euroland never speculate. That gives them the luxury to pontificate from their pedistal against those who do. It seems to me the Euro and even the entire EU was a spaculation...against very long odds that isn't working out.
You gotta know when to hold 'em,
Know when to fold 'em,
Know when to walk away,
Know when to run......
Dontcha just love it when the French blame their problems on "the Anglo Saxons." Oh how sweet it is.
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George Soros is a Hungarian come to America. Supposedly he brought down the BOE in 92. Does he qualify as Anglo Saxon? Does the fact that he hates Dubyah make him more or less Anglo Saxon. Soros as the name he took sounds more Greek to me than anything else.
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Why should the banks not fund speculation? It is not as if they are risking anything, if it all pearshaped the governments will step in and bail them out:)) If I was a bank I would also bank speculation, it would only mean to me either profits or no profit.
@MAII, if you are not a bank don't speculate you are not important enough for the government to save you:)
You could start buying US bonds though, as it looks like the Chinese are selling them so they are going cheap at the moment or you could wait a few months and they will be even cheaper:)
You could then blame "the Franco Latinos" for the fact that Obama borrowed 1.5tr
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#20
It makes him a lucky gambler :)
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Greece is into French bankers for about $80B. Same for Switzerland. About half that for German bankers. I think Britain and US for about $20B each. If we just keep it quiet and don't look at it maybe it will go away. If catastrophe hits and all the GIPS countries go down then American bankers are down about $180B. Lord knows about what it would mean to European bankers. I don't think bankers want Greece to fail but there may be another George around.
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John McLeod @ 3, interesting point you brought up WSJ’s “Outrageous But Legal: EU Knew Goldman Sachs Helped Greece Use Derivatives to Conceal Deficits”.
Now how did Goldman make a turn on these derivatives, by selling them to its customers with the then enticing, concurrent but uderstated Grecian economic statistics showing that she was not overextended? However, if Goldman kept the whole lot as part of its investment portfolio, will our saving Greece bring back the ‘happy days’ of always serving and saving the investment banks?
Goldman and ilk deserve their fat bonuses. ‘Heads I win, tails you lose’ games are their forte.
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There is something particularly pleasing to me about the French thinking that the Euro crisis is America's fault. I like it.
Maud, 180 billion dollars to American banks is chump change, barely a bailout of an AIG. That hardly covers one year of bonus money :-) In the end it will just mean that Uncle Sam has to spend five more minutes at the printing presses. Did I say five minutes? I meant 30 seconds.
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To make the Euro a success the Eurozone needs to integrate further. A common enemy always bring people closer together. The Anglo-Saxons and their speculators have been designated as the common enemy, so Britain is now for the first time playing a positive role in Eurozone consolidation.
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25. At MarcusAureliusII
Well dang....How do I get into this banking business?
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#25. the Barbarian wrote:
"...the Euro crisis..." You wish!
There is no more a Euro crisis than there is a Dollar crisis! You did not cause the little temporary difficulties in Greece any more than we did in California etc. Both are the result of living beyond their means and can be corrected by the same methods.
Neither are either of the problems the result of the work of speculators.
The Euro is a good idea as the US Dollar was when it was created. Both need reasonable management. The logic of a single currency inside a trading block can only be logically resisted by bankers, people paid by bankers or others that want to give their hard earned money to bankers.
The solution to California's fiscal problem if no more for California to reinvent a local currency (did they once use the Continental or not?) than it is for Greece to reinvent the Drachma. The only beneficiaries will be the bankers - so unless you work for a bank, are paid by a bank or.etc. .
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It wasn't me Miss. It was a big boy who did it and ran away Miss.
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For me it is very difficult to understand how a single currency can be stable in long term when it has 16 different regulators and issuing authorities. If euro has to be strong and stable it has to be centralized. that's it. I know that some will say that more integration is a danger to democracy but from now one there is only one way forward unless EU is dismantled. The very idea that EU is a single market and a "single economy" is not true. It needs much more centralization to be anywhere close. In the way centralization progresses, with unpopular decision and without explaining to the public why some of the measures are necessary I do not think is going to be happen to easy and too soon.
The very people of EU (not Europe because there are other Europeans which are not part of EU) have to understand why and if a EU superstate is necessary. An EU superstate it is not possible without people unrest unless our many nationalities give a second place to the so much exposed national pride.
The EU is divided at so many levels that for me is a surprise that still exists. The Continent vs Britain, the East vs West, South vs North, poor vs rich, hardworking vs lazy and so on.
Of course there will always be some conspiracy theory and in part will be true but at the end it is your own responsibility how you govern yourself.
I think that the Greek government should take full responsibility for their situation and come in front of their people and EU with a clear and doable plan to recover their economy and as long as they are doing it right and beyound suspicions they should get all the help they need.
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One interesting thing is how the EU is still failing to be forward looking. You'd think they'd be organizing committees to deal with the other looming PIIGS countries and start planning now to head off four more repeats but they seem instead to be waiting for each one to arrive full blown on the point of disaster. You'd also think they would be looking for something that might represent a common solution, a system of principles they could apply even if only selectively to each one as its case warrants. They don't appear to be doing even that. Some union, some organization. All they can think of is their paper shuffling which is what preoccupies most bureaucracies.
PBS's analysis on the nightly news tonight explained that western European banks are very fragile now and own up to 80% of eastern European banks which are also on the verge of failure. They think that might be another shoe to drop.
And the impact on the US? All they could come up with is that the US is an exporter and a stronger US dollar relative to the Euro would hurt American exports. But as I see it, Europe is by and large a competitor to the US. Failure of the Euro and the European banking system would cause European businesses to fail that would open up markets to US businesses in other countries that are now served by those European companies.
If Goldman Sachs sold Greece convoluted investment instruments which hid its true dire situation, that is likely not illegal from their point of view, that is Goldman Sachs doesn't necessarily have any liability or culpability so long as the instruments are not illegal. It is not for Goldman Sachs to divulge the investments its clients make, that is the responsibility in this case of the Greek government. Disclosure to its citizens, disclosure to the EU and any other banks where its solvency might impact its ability to secure loans is their problem, not Goldman Sachs.
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MaudDib wrote:
"25. At MarcusAureliusII
Well dang....How do I get into this banking business?"
Kill a bunch of folks, steal their land, then rob them until you have enough money to lend it out to them for the privilege of living on the earth they work in order to grow your food.
I believe this is the established career path for a distinguished banking family.
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dt;
Or you could just go to Switzerland and have a rich banker adopt you as his long lost relative, then bring you into the firm.
I understand that Swiss banks may have exposure of 80 billion in Greek government securities. Small change for them I'm sure but they won't be happy at all even losing that relatively small amount. Do you think they are dumping other PIIGS government obligations and shorting the Euro yet? Can they? Do they have an exit strategy to get out before the roof caves in on them?
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The Continent would have never been "ready". The OCA conditions are never fully fulfilled, not even in the US. Ironically, introducing a common currency into a non-perfect OCA can have the effect of shaping it more into a better OCA. (Optimum currency area).
This is what is happening now. Countries have to become more open, competitive and flexible. Its tough but without the euro, the real structural problems would have surfaced later and with much more force. Better to deal with it now.
Regarding the conspiracy, I don't believe it. However, it is more than clear that the UK press is more than happy to see the eurozone in "trouble" in order to justify the British absence from the common currency.
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It's worth a note that between 1774 and 1787, America experimented with its own confederate democracy, not terribly different from what the Eurozone is doing now.
And ultimately it foundered, largely on currency issues, and we had to switch from a confederate form of government where most important decisions were made locally and the national government had only the power that the member states gave it, to a federal form where most important decisions are made at the federal level and the member states have only the power that the federal government gives them.
Many of the divisive issues were similar to those now facing the Eurozone; why, for example, should New Yorkers provide economic support for Virginians who had made unwise-in-hindsight investments in molasses?
Financial policy was simpler in some ways and more complicated in others in the nascent US because at that time the US used Free Banking; our issuers of currency were mainly Banks, and government currencies from local governments were not a significant vehicle of value. Currency issued by different Banks was interconvertible in the same units. You could trade Bank of Virginia Dollars for Bank of New York Dollars one-to-one, as long as both Banks were still in business. There was a continental dollar starting in 1775, but being issued by an entity (the confederate government) with few assets and no ability to levy taxes, it rapidly achieved worthlessness.
The value of a Dollar at that time, regardless of what Bank issued it, was more-or-less set by the value of the Spanish Dollar, which also circulated throughout the area at the same time. The value of the notes was supported by a promise to pay an equivalent amount of silver (or in some cases Spanish Dollars or Dollars in the currency of other Banks). But the minute the market noticed a difference in real value, there'd be a run on the Bank whose currency had dropped, and it would either cough up assets until the perceived value of its notes achieved parity against those of other Banks (and the Spanish Dollar), or go out of business leaving any outstanding notes worthless.
So instead of national decisions by the various state governments, financial policy was driven mainly by the individual decisions of Banks, investors, speculators, and holders of wealth. Instead of just stockholders facing the risks of companies doing badly, banknote holders had the same problem.
I draw an analogy to the way EU member states have their economies tied together by a single currency, while individual nations each pursue their own fiscal policy and have their own regional crises to deal with. It's not a really stable situation.
Banks could, and did, go bankrupt, rendering their notes worthless, whenever they made enough bad decisions, causing regional problems. Regional governments had to step in and support the local economy (though very rarely the actual failed Banks), frequently at a moment when much of their own holdings, being denominated in the notes of that Bank, had lost all value. The credit market being in those days difficult, sluggish, and expensive, this was a major problem.
This led to the state governments, like many of the wealthiest citizens, holding much of their wealth in notes issued by many different Banks in other states - minimization of risk via diversification demanded it.
But in turn this meant that when Virginia molasses speculators got in major trouble and a half-dozen Virginia Banks went bust (economic trouble on a scale similar to Greece today), the government of the state of Virginia stepped in with wealth held in other currencies. So the currency markets were suddenly flooded with notes issued by New York Banks, which would of course find their way home to be redeemed, in the process causing hardship and instability in New York.
And of course the New Yorkers then were all talking about the "conspiracy" against them and the attack on their currencies by foreign speculators - when it was all nothing more than the results of a free market.
In some ways the state governments of the early US had it easier than the Eurozone governments. Since the flow of wealth to impoverished areas proceeded without deliberation or decisions made by governments of the areas the wealth was flowing from, those governments didn't have to take the heat from their local citizens for transferring wealth to the "foreign" (other states) governments of disaster-struck areas or supporting the irresponsible actions of the citizens of those foreign governments. In some ways they had it harder, because the fiscal impact on their home states was pretty much the same as if they had, and they had no say in the matter.
Generally, the system of currency from multiple issuers having a common value proved unstable, at least in the US. The constitution passed in 1787 giving the central government the power to levy taxes, and with assets from taxation, they finally had the power to do something about stabilizing the currency. The Mint act of 1792 saw the beginning of a replacement currency, subject to federal as opposed to local decision making processes.
We're more sophisticated now, and you may be able to actually do this now, but the Eurozone is trying to steer a difficult course with its supranational currency and multiplicity of national decision-making processes. Our own American experiment with trying to steer a similar course failed ignominiously; the "continental dollar" issued by the central government under the articles of confederation had to be traded against the new federal currency (based on silver and valued about equal to the Spanish dollar again) at 1000-to-1.
Of course, it also led us to unify under a Federal Government, transforming from many nations into one. This has on the whole proven to be a sound move for us. But right now, I don't know if the Eurozone can do that. I'm pretty sure most of the European states aren't ready to give up their sovereignty.
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MarcusAureliusII wrote:
"dt;
Or you could just go to Switzerland and have a rich banker adopt you as his long lost relative, then bring you into the firm.
I understand that Swiss banks may have exposure of 80 billion in Greek government securities. Small change for them I'm sure but they won't be happy at all even losing that relatively small amount. Do you think they are dumping other PIIGS government obligations and shorting the Euro yet? Can they? Do they have an exit strategy to get out before the roof caves in on them?"
I think to answer that question we need to distinguish between internationally owned investment banks based in Switzerland and "traditional banks", which are owned by the cantonal governments and which lend money locally rather than invest it into the stock market internationally.
The thing is, most of the ownership of Swiss based investment banks is foreign. Foreigners come here to establish their banks because of the low taxes and secure political and economic landscape, and they then put their money back into play in the world economy.
The local banks, by contrast, tend to be owned by the cantonal government and by local shareholders. They tend to only operate within Switzerland.
After the UBS debacle, where the rules on shareholder liability were bent in favour of UBS, the foreign banks have become despised by the rank and file Swiss. It was the Swiss taxpayers, after all, who took a massive hit in order to keep UBS from possibly caving inwards on itself. The reason for that was because UBS was a rare breed of bank: it was a cross between international investment bank and "local traditional bank". It had a lot of local shareholders and depositors, and held a lot of Swiss mortgages. But it was also owned to a large extent by foreigners and involved in all sorts of funky business with American and European banks.
So leaving UBS aside, the Swiss don't really care if the foreign owned investment banks take a bath in the hostile bond market, or even if they go belly up. They car about their local banks, but ever since UBS I gather the mood of the ordinary Swiss is that foreign business, and foreign governments, are highly risky investments.
Therefore I doubt whether the Swiss depositors or shareholders will be overly concerned about the exposure to Euro debt.
I could be wrong, too. If the Swiss owned banks are also neck deep in Euro debt, I can tell you there will be hell to pay on the streets of Switzerland. After the US failures, the hostility towards bankers here was something to behold. You know how the Germans have a reputation for frugal living and careful finances? Well for the Swiss multiply that by 100 fold.
And because there is direct democracy here, it is likely that if the local banks are indeed exposed to Euro defaults then Switzerland will become even more hostile towards the EU, politically speaking. Unlike Germany, the mood and views of the Swiss people themselves can direct law and policy, so it is likely we will see a lot of very anti EU views in the local press, and on the street. Even more, I mean.
It is interesting that Hewitt mentions former UK labour MP Denis McShane.
McShane wrote an all out attack piece on Switzerland in Newsweek recently, which was so anti Swiss it bordered on the hysterical. He claimed that Switzerland is dying, that the streets of the cities are filthy, that the people are unhappy, and that the Swiss model of government has failed.
It is worth reading the article, and especially the comments that follow it.
All in all, it looks like the pro EU attack dogs are shaping up to protect themselves from criticism by any sort of propaganda they can muster. But there is the danger that the loud public voice in Switzerland is really the unheard private opinion in Germany, in which case the EU might risk picking a fight with the people who can surely see an end to the whole rotten kleptocratic experience: the german workers.
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APUSA;
The states prior to the US constitution and the establishment of the banking system had many other advantages over the situation the European Eurozone countries find themselves in today.
They had a much more tightly knit culture. Many had very close relatives even from their immediate family in other states so they had a direct interest in their survival. They had a common language. They had a common understanding. They were largely self reliant not expecting entitlements of lifelong government handouts and threatening social chaos if they it didn't meet their expectations. Mostly farmers, tradesmen, and small merchants their economy was simple to understand, there were no complex instruments that governed their financial existance. They expected to endure hardship, they had experienced it before and they knew it would come again. Despite the interstate rivalries there was nothing like the wildly speculative international markets that could bankrupt them literally in the twinkling of an eye. They had an expectation of living largely on savings, not on credit. I think it was Benjiman Franklin who said "A penny saved is a penny earned." I don't know who said "waste not, want not." Hard work with few luxuries was the expectation of most in life. The prize was survival in what was still by and large an untamed wilderness. They lived and died by their wits and by divine providence. There are few if any modern cultures including our own that even remotely resemble this view of life.
They had one other unique advantage Europeans don't, perhaps the most important advantage of all we still have in America today, the American ethos. They genuinely cared about their neighbors and could be counted on to volunteer help in times of trouble. It was true in America then, it is true in America today. If you don't believe it just recall how many Americans ran to the sites of trouble to help out just because they wanted to. Katrina and the WTO are high profile examples. But think of how farmers drive hundreds or even thousands of miles at their own expense bringing their equipment with them to help other farmers harvest crops when there is a problem or how many people volunteer to fight wild fires in the west just because they want to. No European country has that strength, nor does any other country in the world. That ethos which is part of our basic nature is one of the underpinnings that has made and will keep America the strongest nation on earth.
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dt;
It seemed to me that there must be a seething rage among many Germans and even among many Frenchmen at the prospect of seeing their tax money go to bail out the PIIGS and their creditors. We don't hear much about it but it must be there. I've posted elsewhere that it wouldn't surprise me to see protests in the streets in those countries. This is what happens when government is not truely democratic, when the nation's leaders don't do what their constituents want but what they want, what is in only their best interests, what gratifies their egos and shared megalomania. Schiller and Beethoven must be turning over in their graves at the spectacle of their greatest creations being used as the icon for such folly as the European Union.
The problem for them is that this is not the opening moves at the beginning but the end game. The damage has long been done, the chickens are all coming home to roost. What next? Crying over spilled milk. The protests far far too late to do any good now.
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Well said Many Eurosceptic Commenters !
I am one of those Anglo-Saxons , who cast an evil eye on the EU and savour the thought of its downfall . I too have been among the many Brits. who boycott all French goods . Before the introduction of the Euro , I feared for Southern European countries , who were already falsifying their accounts to qualify for joining the Euro . If The EU had not been so blindly determined to launch the Euro single currency , they might have prevented countries like Greece , Italy , Spain , Portugal and Ireland from joining . Of course then it might not have seemed feasable to launch the Euro at all with so few participants .
I do not think that any individual country should be looked upon to finance Greece out of her debts , certainly not Germany . Perhaps the European Commission should pay , using the contributions of Nation States to the EU . No EU Grants or CAP for any member state , for however long it takes . Drastically reduce the salaries of commisioners , euro-MPs and bureaucrats in Brussels or wherever .
Perhaps the EU should continue to bend the rules ; allowing Greece to return to the Drachma , while still remaining an EU member .
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#1. Nikos_Retsos;
Interesting to read your contribution. It touches upon an aspect that is seldom mentioned here, where other contributors are so strongly concerned with their nation-state, namely EU as a counterweight to a poorly functioning nation-state.
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How many angels CAN dance on the head of a pin, Gavin?
What if = circular logic:)
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I strongly support the EU & the Euro, I just hope the speculators force a change of its rules so that us here in the UK also join in it. The currency itself although it felt somehow in the last month of so it is still holding up and for my purposes it would make my life and lifes or millions other british citizens easier as most of our dealings are with countries that use the Euro.
Having said the above, what the last month or so have shown us is that the ECB and the Euro needs to change, you have any Tom, Dick & Harry offering an opinion, it looks as no one is in charge. Every one acts as if it is not in their interest to sort things out and if they blame someone else the problem as if by magic will go away. Every ones blames someone else, the Germans blame the Greeks, the French blame the speculators, the Greeks blame the previous government, the speculators blame the Euro, the Spanish (ok they don't blame anyone yet!), the Italians blame the Germans, the Finish wished they were blamed by someone. In fact they should all get together and agree of a way out, the Germans will have to pay something and start buying things, the Greeks will need to save more and buy less things. But any idiot can see the problem is that for the currency to work wealth has to be more evenly distributed. You can not have a few nations overproducing and not buying and other nations not producing and buying too much. If transfer of funds is something that the German people don't like then they have to produce less or don't sell on credit, if the Greeks don't like to cut their public servant then they have to buy less.
The rest of us need to take the banks out of the speculation business.
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#42. ChrisArta
Take a good look at the picture of the article. It looks as if Jean-Claude Juncker is about to sneeze, and even if the BBC has a preference for unflattering pictures, it might really illustrate the situation of the Euro. The chairman is sneezing, but after that he is well again.
Be sure that the chariman of the Euro group Jean-Claude Juncker is speaking on behalf on the key members. He is by the way also voicing the position of a couple of other EU members not using the Euro.
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As a french, it is true that in France, we tend to blame any economic problem on unregulated market often tagged as "Anglo-Saxon". It is true that in the case of Greece, there is a major problem with their public debt and it is too easy to just blame the market.
However, having a british family in law, I have noticed that it is also a fact that the British do not want a political Europe and do not believe in the Euro. I have heard for more than 5 years now from British people that the Euro would not work but the facts are that the Euro still exists and, believe it or not, it is quite nice to come to England sale shopping or to be able to pay directly in Euro abroad (as we used to do it in the past with the Dollar).
Furthermore, the common comments given in England about the Euro are always oriented :
- the currency is too strong and is hence harming the exports of the Euro zone.
Well, it is true but when the pound was strong against the franc, Britain seemed to be pleased with that and people did not feel sorry about themselves. There are always pros and cons with a strong currency but that is not a sign of failure.
- Euro will never work as there are too many different economies in Europe with countries such as Greece, Germany or France.
Well, it works in the US and many people say how different and independant the various states of America are. On the Continent, people have a strong european feeling which make them believe that Greeks, Italians, Dutchs or Germans are alike. Therefore, I deeply believe that these feeling will help resolve the problem with Greece.
To sum up:
- blaming the "Anglo-saxon" market for the Greece problem is probably nothing more than just a way for the continental Europeans to all have a common "ennemy" (even it is all fake) and pursue one main objective: save Greece and the Euro.
- on the contrary, constatly criticizing all the efforts to do a political (or a military) Europe is a british sport (probably because Britain does not want to be out of it but does not want to be in it either as it would mean lose some of its sovereignty).
If you want a perfect analysis on the subject, I would just advise anybody to watch my favourite BBC programs "Yes Minister" and "Yes, Prime Minister" as I find them very accurate in describing the real policy of Britain towards Europe and pinpointing at the same time the real problems with Europe and Brussels.
PS: I do love Britain and France but, being able to see both sides of the problem with my british family in law, I find it funnny that nobody realizes how stubborn both nations are thinking that they know better about everything.
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For sure, there has been a big party in Greece (at least for some of its people) on borrowed money. For sure, chronic financial mismanagement and deep-seated corruption have now brought this party to an abrupt end and the bill must now be paid by the guilty and the innocent alike. For sure, the situation is pretty dire and the Greek government seems to be trying its utmost to pull out its own bad teeth. You must admit, however, that, also for sure, there is a pack of professional financial hyenas out there betting serious money that if they all maul Greece it will probably default. Hyenas are an integral part of the ecosystem, and they regularly “stress test” the very young, the very old, the sick and the otherwise weak. If we can’t call a speculator a hyena, can we at least call a hyena a speculator? BBC wildlife documentaries will definitely take on an entirely new twist.
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@43,
If you watch the news over the last few days the Eurozone response to the crisis is all over the place! Merkel one day says one thing, or at least looks like she says one thing, the next her minister says something else, let alone her partners in government. The French say something else, the sneezing guy above tells us something on Thursday night, something else on Friday night, he doesn't reveal anything on Monday and then on Tuesday he comes out again with a different statement. Then we have the ECOFIN ministers adding their voices as if who cares what they have to say? We are not even in the Eurozone, why should we comment on it or be taken seriously. Then the Eurozone says, "markets watch out we will not let Greece fall", the markets say "so tell us how are you going to save her then?" the Eurozone says "We have a sneaky plan, but we are not going to tell you!", come on is that the best the Eurozone has to offer as a plan to deal with a crisis. Just be black and white, either we rescue Greece here is the cash, or it is too much for us, kick them out. Here is the need for G. W. Bush, you are either with us or you are against us.
Really Mathiasen, if you have any clues as to what on earth is going on you should be the president of the Eurogroup, I don't think anyone has a clue what to do or how to deal with it.
Also they should use this opportunity to fix things, they can't assume that in the future there will not be again a government or a country that will not overborrow, there will be. and the last thing they should be an enguiry into how Eurostat operates, the Greeks cooked the books clearly, but siting on the outside it looks to me as if eurostat is staffed with useless people that can't see false number if it hit them on the head. If the Greeks had not changed their government and the new government blowing the whisle, Eurostat would have us all believe everything is sweet in Euroland.
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"it looks to me as if eurostat is staffed with useless people that can't see false number if it hit them on the head."
More a case of not being allowed to see it. The record for the EU on being open and welcoming whistleblowers is not good.
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This is a good balanced article Gavin. As I have been reading on the notayesmanseconomics web blog the truth is that Greece's leaders have failed her in the way that they misrepresented statistics and expanded the civil service. Also Europes leaders appear to have no clear plan. These are the real reasons for her fall in financial markets, after all they are hardly a reason to buy are they? It is always easy to find and blame a scapegoat but Greece was quick to use firms such as Goldman Sachs in the past when it suited her leaders....
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ABOUT GREECE
Today's headlines in my paper 'El Pais' (translated):
The European Union takes effective control of the Greek economy.
Inside there is a very telling photograph of Elena Salgado talking with Yorgos Papaconstantinu the Greek Minister of Finance. He looks very pensive as she looks him straight in the eye.
Elena Salgado is the Spanish Minister of the Economy and therefore current President of Ecofin meetings.
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I find it astonishing (but I suppose I should not do so!) that, as soon as the Euro has come under pressure (or, indeed, whenever there is a finacial problem with the EU) ever EUrophile looks to Germany to ride to the rescue.
An example of this is ChrisArta @ #43, to wit, "... In fact they should all get together and agree of a way out, the Germans will have to pay something and start buying things .....
It must be great being a German citizen and having to fund the saving of the Euro. I hope that the Germans have deep pocket because they are being looked to for being mugged - yet again - to save Europeans from themselves!
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To John_from_Hendon (28 - agreed completely.
To opinion (30): The only issuing authority for the Euro is the European Central Bank. It's role is similar to that of the Federal Reserve in the United States.
To Marcus (31)
What Goldman Sacks and others have done is probably not technically illegal, but could hardly be called ethical!
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In the technology industry there is an expression:“We tend to over-estimate short-term change and under-estimate long-term change”, which I think best summarizes the current press furor about the Greek deficit. I doubt Greece will default this month, but when they are living beyond their means it will surely happen one day. Speculators can be right in the long-term but still lose their shirts in the short-term. Geroge Soros made his billion betting against sterling not just because he understood the economic fundamentals of locking sterling at DM2.95 were unsustainable, but because he placed his bets at the right time.
When Greece defaults, they could be bailed out by Germany, but what would be the reaction in Ireland, Portugal, and Spain? The bare knowledge that Germany is prepared to bail out a eurozone member leads to the conclusion that the hard road of deflation and austerity is a mug’s game that the Greeks and Spaniards are smart to pretend they are sticking too while waiting for the benefit check from Berlin. But how many countries can Germany bail out, and for how many times? Germany has been one of the slowest growing economies in the world since reunification only growing 3.9% in the 2000-2010 period. Germany already has a lower GDP /person than almost all of Northern Europe. Germany also has one of the fastest declining populations in the world such that it will have a lower population than both the UK and France by 2050. And the most significant impact of the fall of the Wall has been that its manufacturing economy is now ruthlessly exposed in the global market to Chinese competition which has a tremendous cost advantage.
The real long-term change is that Germany is increasingly an Achilles whose image as an Atlas capable of carrying the eurozone burden dates from a bygone age. The combination of a declining Germany locked in unavoidable cost-competition with the Chinese and a eurozone periphery that thinks the Franco-German alliance owes them tribute must result in rupture sooner or later; but maybe not in 2010.
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To AngryPatriotUSA
A very interesting post, particularly about the early days and how the Spanish Dollar of the time was used as a reference.
It is my belief that something closer to federation is inevitable as the European Union grows, there are already half the number of member as states in the Union.
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Greece’s is suspended from voting by the EU because it took advice from an investment Bank about its methodology of accounting.
And it now comes to light that such advice was both clearly flawed and designed to misrepresent the truth.
So the Greek people are no longer represented and suffer financially.
In any event if I were Greek, I’d buy a T shirt and have printed on the front of it:
‘No taxation without representation’
And on the back of it:
‘Say no to debt slavery’
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51 writes "What Goldman Sacks and others have done is probably not technically illegal, but could hardly be called ethical!". In fact this bank and edge fund is so powerful that in many situations it has influenced legislators, for example this company has legisators vote a new law on food supply. this bank is allowed to speculate on wheat or corn. Therefore it may be very hard to infringe laws when you make laws. but actualy the chairman of this company starve population all around the world just for buying cars and piece of jewellery and this behaviour is well above a lack of ethic it's just a lack of humanity.
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#46 and #50
Well, I have stated in a couple of contributions that Greece will face political demands. The country has a serious problem with its credibility since it presented Bruxelles with falsified accounts, so it will be very hard political claims.
They are coming now. The time table is from today and up to the 16 March, and there will be new demands after this date, if the measures don't work.
Germany will put all its powers behind the Euro as will the other member of the Euro zone I suppose, but there is one thing we cannot accept (I live in Germany): Governments without budget discipline, which let other people pay.
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#50,
It is the way it goes, they wanted a "union" they have a union, so get on with the job. either kick Greece out or put on the table a rescue plan what is so hard about it? The way it looks right now is a pathetic show!
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Menedemus, I am afraid ChrisArta is 100% right. Europeans want Greece to do something? Well what? Become IT specialist like India? Become manufacturer China-style? Sell women and children like iiiii & tttttt----will not say it, shame... ? What?
I'ill tell you what. How about Greeks starting from applying their soverign rights over their land? How about that? How about their drilling their oil? And it is not a way of saying... there are huge quantities of it enough to bail out Greece 10 times.
So tell us... what is the problem of that? Why EU do not show solidarity there? Do they have a problem with Greeks drilling their oil? But it is going to be European companies that will mainly do it, so all EU will profit from that. Imagine. Pipelines from Greece going straight to Italy, Austria, Germany and France... what else do you want?
So tell us what your position on that? And anyone can explain why the EU has objections to that? Why? Why?
Why...why... there is no straight answer. And since there is no answer even the most corrupted among Greeks will say "let them pay..." and they will have 100% right. Well if you do not want us to do business, then pay... Know only that Greeks at 30/70% would much rather do business than sit/remain badly employed & unemployed and receive huge parcels and swiss accounts/peanuts to survive (again referring to the 30/70%). If Europeans pay it is apparently because they like it that way. And since they are not willing to come out and say something, let them pay. Why should Greek citizens feel bad about German, French and British citizens when it is above all them paying the price of non-development (the 70%, not referring to sharks that got fat on US-European support all those years).
Only the case of the Aegean oil is enough to demonstrate the harsh realities for EU. Let alone start talking about Russian gaz. Does EU want it or not? Do they need it or not? Do they want Greece and Bulgaria to get linked directly from Russia or do they want to pass via Turkey, Azerbaitzan, Turkmenistan and Ouzbekistan and what else...? Both is not posssible.
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AngryPatriotUSA (35): The US experience between 1774 and 1787 has no relevance to Europe whatsoever. There were not '13 North American nations' at that time, but one nation artificially divided into 13 states, just like the German nation was artificially divided into 2 states between 1945 and 1989.
The briefly lived American articles of Confederation were simply a description of the post-conflict reality on the ground in the immediate aftermath of the American revolution with severed links between the former colonial executives (governors) and Crown that happened to leave those governors as accidental heads of state. These 13 accidental states could unite as easily as the two German states did in 1991 because the essential pre-requisite for ‘government of the people, by the people, for the people’, i.e. a united people willing to live under their majority, already existed in North America in 1787. That pre-requisite does not exist in Europe today where each state is already a nation-state (unlike so-called US states which are mere provinces of the nation-state that is the USA) making representative government at the European level an impossibility today.
There is no difference in American political lexicon betweens the words ‘federal’ and ‘national’ but the democratic legitimacy of the federal institutions in Washington DC is entirely dependent on them being national institutions. In the EU context there is a completely different meaning of the words ‘federal’ and ‘national’ with the EU institutions in Brussels being unable to derive any democratic legitimacy as a result.
The true American analogy to the EU would be one super-state to rule all the nations from Canada to Argentina with political institutions like a ‘Parliament of the Americas’ whose law was supreme to that of the US Congress and an ‘American Council’ of heads of government where a qualified majority of leaders such as Fidel Castro, Hugo Chavez and Co. could outvote the American president and oblige him do what they want him to do rather than what the American people elected him to do. I would suggest that any attempt t create such EU-like institutions in the Americas would result in a very large number of angry American patriots, and that until you can convince your own countrymen that this is a good idea, please avoid making naive comparisons between the American nation-state and the EU.
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MDLS
"To Marcus (31)
What Goldman Sacks and others have done is probably not technically illegal, but could hardly be called ethical!"
Had they breached the confidentiality of their client's information by revealing details of their investments without any legal cause such as a subpoena that would have been unethical. If the Greek population or the EU auditors cannot hold Greece to account for how it spends its taxpayer's money then don't blame a private investment firm, that is not their job.
Maxant;
"In fact this bank and edge fund is so powerful that in many situations it has influenced legislators, for example this company has legisators vote a new law on food supply. this bank is allowed to speculate on wheat or corn."
Like all American citizens, employees of Goldman Sachs and the company itself have a right to petition its government to pass bills to its own advantage if it wants to. The right to petition the government is guaranteed in the bill of rights. Lots of people and groups hire lobbyists to assert their interests. This not only includes large corporations, it includes labor unions, consumer advocacy groups, ethnic minorities, the aged (AARP), automobile drivers (AAA) and many many more. You can also go see your representatives yourself and tell them what you want. They try to influence congress, they don't own it. Congress answers only to the voters.
It is widely acknowledged that farmers among others need a futures market to assure the price they will receive for their crops. This enables them to do their financial planning with some measure of certainty. Speculation of futures market is an inherent and crucial aspect of free market capitalsim. Setting up speculators as demons is not only a false accusation, it won't matter, they aren't going away. They will always be with us. As an investment bank, speculation in futures markets is exactly among the things Goldman Sachs is supposed to do. Countries that do not like free market capitalism have a choice, socialism. That is what the USSR was about, what China used to be about a long time ago, and what Hugo Chavez wants to make Venezuela about. See how well that works. EU inefficiency times one million. Or maybe just times ten.
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I find the assumption that the Germans might pay for Greek debts to private bond holders a fascinating turn in world politics. It really is quite a new phenomena, and one that deserves every thinking persons' keen attention.
Consider the traditional civil procedure for a debtor who cannot pay acumulated debts: it usually falls into one of three categories.
The first category of civil law allows for debt slavery. In this case, the debtor is made the slave of the creditor, and must work in indentured bondage (slavery) as the property of the creditor until the debt is paid in full. This archaic and brutal scheme of civil law still exists in parts of the world. I saw it first hand in India, many years ago.
The second way of dealing with bankruptcy was known in "civilized countries" which prohibited private debt slavery. In this type of regime, the state takes over the role of creditor slave holder, and punishes the debtor with criminal penalties. The UK had this regime of law for quite a period of time, and indeed one can still visit the site of the "Clink" prison in London, which is an infamous debtors prison. (it was also used to house political and religious prisoners)
The third way of dealing with bankruptcy, which is consistent with a liberal and modern society, is to allow the debtor to file for bankruptcy in a civil court. Because debt slavery is slavery, the debtor is allowed to prove they cannot pay the demands of the creditor and wipe the slate clean. There are penalties with regard to whether the person can operate a company for a period of years and so forth, but in general terms it is the creditor who takes the loss in the sort of society.
Now turning to the issue of national debt recovery from bankrupt states, the traditional methods of recovery are firstly war and conquest, and the installation of a puppet regime which will tax the population brutally, extracting what they can for as long as they are willing to run a failed police state. Secondly, a state can simply print more currency, creating inflation and essentially forcing the creditors to take the losses and the debtor state to lose credibility in the credit market, which means they cannot borrow further foreign currency.
But in the brave new world of the EU ruled by financial corporations, we see a wholly new phenomena.
Now when a state cannot pay its debts, citizens from foreign states (Germany) are taxed in order to allow the private creditors (the profits of the interest on the debt go to private person's bank accounts and not to governments, not necessarily even within the EU) to keep making their profit.
The civil law equivalent would be that I file for bankruptcy because I lose my job and can't pay the mortgage on my house. And then the court makes an order that my neighbour must pay my mortgage for me.
As I type that sentence, my eyebrows raise, despite knowing full well what I intended to write. The state of affairs defies rational credibility.
What is missing in this equation is the risk for the creditor. In the brave new world of corporate controlled two party "democracy", creditors are simply not exposed to risk. When they lend money, they are assured by the very fabric of the political and legal system of obtaining their usurious profits.
What that creates is a scenario very similar to debt slavery, in civil law terms. (scenarios one and two, above)
Creditors know that even if they make bad loans to debtors who cannot pay, they will obtain slaves in default of cash payments. there is no bankruptcy, and no possibility that a creditor will simply lose their money due to careless risk taking.
So in very real and stark terms, corporate controlled "democracy" has allowed the enslavement of taxpayers by financial corporations. Not only is this morally repugnant, for any slavery is brutal and inhuman, it is also a devastating development for the market based economy.
This is because where creditors can obtain slaves in default of cash profits, they will lend recklessly with regard to the capacity to repay debt. This, of course, results in reckless loan policies by bankers and a society based on slavery.
We have truly devolved backwards to corporate feudalism, otherwise known as fascism. The sham democracy that has allowed this scenario to eventuate is hardly better than the sham system of representation found in the former USSR.
In both systems, the citizens were offered a hand picked selection of poodle political representatives to choose from every so often, but in reality they were slaves working in bondage to a superior caste of human beings. In the soviet union it was the communist party elite. In the westminster system, it is the bank shareholding elite.
However you cut it, and whatever you call the system of representation, it is slavery and bondage for the worker. It is not a free society.
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french31;
"- blaming the "Anglo-saxon" market for the Greece problem is probably nothing more than just a way for the continental Europeans to all have a common "ennemy" (even it is all fake) and pursue one main objective:"
That is what continental Europe did ten years ago, recast America as a common enemy to justify its goal of creating a centralized EU stperstate with one currency to challenge it. It found a whole host of reasons including trade protectionism, globabl warming, culminating in its decision to evade its obligations to support the US in Iraq even if it didn't want to send troops. AntiAmericanism spread like wildfire in ontinental Europe where over 90% of the population opposed America according to polls. It also spread to the UK where 50% opposed America. Chirac even threatened the governments of those nations who were applying for admission to the EU that if they publically opposed France's position on Iraq, he'd block their membership. France and Germany got their wish, it has come true. Their governments may have been playing a cynical game for domestic political advantage but it had repricussions. The US is no longer Europe's "ally" except in the war against Islamic terrorism when Europe cares to fight at all. Talk about cutting off your nose to spite your face. Now if it wants to do the same to the capital markets, make an enemy of them too, it will suffer another mortal blow. Don't pay them back because they are unworthy scoundrels and see what happens as a consequence. But don't be surprised if nobody will ever lend to an EU country again. Europe made its bed, now it must lie in it. No negotiations can undo the ill will Europe engendered among Americans, no negotiations will undo the EU's credit worthiness should it choose to default on Greece's bonds. Europe wanted one union, one currency, now it must live with all of the implications that are the consequence of that union. For better or for worse, in sickness and in health, til death do you part.
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The Greeks want help from the "EU". That includes the UK. The UK has been paying billions into the "EU" for years, so, I presume, it has been helping Greece for years.
There have been a number of comments here and elsewhere indicating that the Greeks have large and/or magnificent armed forces.
The Argentinians are getting frisky again and might be building up to attacking the Falklands. e.g :
http://news.bbc.co.uk/1/hi/world/americas/8518982.stm
I have seen more reports and indication than just the link given above.
I have also read and heard a number of comments indicating that British forces are overstretched.
So will the Greeks be prepared to help the UK if Argentina attacks the Falklands?
I was in Germany at the time of the Falklands War. I believe that the extent of German/continental support for the Argentines was hidden from the British people and that if people in the UK had been aware of it we might have left the "EEC" or whatever the rotten thing was called shortly after winning the war.
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Re62: Marcus, are you trying to further convince the Europeans why they have to go into deeper integration or something? Cos your message is only revealing such. There is this constant anxiety among US and their friends to convince the rest that "it won't work", "it is all in vain", "it is megalomaniac"... what the... What is your problem anyway? That your private companies will not get their money easily back? I am not even convinced that this is what they want. When US fights off any proper development in Greece and when US companies come to give (as-if blind) loans to it, then I do not think they expect to be re-paid in money terms. It is other things they want.
I told you (but you will of course keep refusing to comment): Greece has oil. A lot. Greece has only to start drilling it to bail itself 10 times. What hinders them? It is a country that has one of the highest educational rates in the world and has undertaken in the past successfully really big projects. Plus, it happens to be the origin of companies that group a huge commercial fleet with huge experience in the Middle East oil commerce, ideal in that case (nontheless things could be simply done with a pipeline).
So talking of a small country of 10 million only, only this "little" detail could solve the problem and make not only Greeks but even the bulk of Europeans at least just a bit more relaxed in terms of their oil provisions. What is the problem? War with Turkey? We are not afraid. We were never afraid. We are not going to attack but if they attack they will be in deep trouble unless... unless they attack with company (US and Britain) like they did in 1974. Well that is the problem.
And guess what. Accidentally and indepedently of Greece, that is the core of the problem of the EU as well. Do not take my word, take De Gaul's word. A yes... too French for you maybe... Well he can do as much as that to please you.
Start calling things their name:
What hinders the EU to start exploiting the Greek oil as well as any other ressource anywhere in the EU...?
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It is highly unlikely that Germany, or indeed the world's leading exporter China, will elect to become uncompetitive.
If the Southern European countries think they have problems, the General Accounting Office now suggests that the United States will never again run a balanced budget.
A solution? Many talk of introducing sustainable global economics - will this be incorporated in NATO's new concept? From its inception following WW2 the NATO treaty has had an economic clause - marrying security with economics - which mainly Canada insisted upon.
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dt;
"What is missing in this equation is the risk for the creditor. In the brave new world of corporate controlled two party "democracy", creditors are simply not exposed to risk. When they lend money, they are assured by the very fabric of the political and legal system of obtaining their usurious profits."
There is an alternative. Live on your savings, not on credit. Only spend what you can afford to pay for. Nobody is forced to live on credit. It is the creditor who enslaves himself. I want to own and drive a Rolls Royce but I only have money for a Cadillac. I have to borrow the difference by convincing someone I am a good credit risk. If I don't pay it back, then nobody will lend me more until I do. Interest rates are determined by perceived risk based on among other things past performance in paying back debt. Greece doesn't have to borrow. It can start actually collecting taxes from its citizens and spending only what it collects. It lives according to the standard of what it can produce. Blaming the lender makes no sense. Why should I lend you more money when you didn't me pay back the last time I loaned it to you. The EU has engineered the ludicrous arrangement you describe because it was willing to make any sacrifice to create what it hoped and expected to be a political powerhouse. It hasn't worked out. But then what do you expect from something the French had a hand in engineering :-) Now its fear is that if Greece doesn't pay back its debt, nobody will lend to anyone else in Euroland either, especially the other PIIGS.
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Re Mes63: A very precise message. The answer to your question on Falklands is simple. Greeks (one of the EU nations) are prepared to help British defending a random land in the other corner of the world as much as British were willing to let off Cyprus, a historic Greek land, self-determine it as a part of Greece...
Sorry but the truth is very painful. While Greeks recognise that they have nothing to divide with the British people, the British politics have been absolutely catastrophic not just for the Greek state - who cares... - but for the Greek nation itself. Things include the involvement of Greece in WWI, the genocide in Minor Asia (British co-orchestrated it), the involvement of Greece in WWII (British wanted it), the handing in to the Nazis (they British handed over Greece to Nazis), Cyprus (well there!!!...)... these are subjects you totally ignore and you are justified to pose questions but it is not up to now to explain to you on these and how Britain was implicated one way or another to the death of around 2,5 million Greeks (1,5 in Minor Asia and 1 in mainland Greece) and the forced emigration of another 3 million…
...in a few words, while Greeks will not hold accountable every last British citizen on that, they will find it hard to aid them in some far fetched war on the other corner of the earth. We did once for NATO in Korea and saw the “thank you” by being bombed in Cyprus.
However, your question is right. Yes normally we should arrive at a point of having every EU country showing solidarity in a such a basic question of sovereignty and that even in case the EU country’s position is muddy (and in Flaklands it is not, Britain clearly has every right to call it its land – the Spanish never colonised the island and only briefly occupied it for 1-2 decades at the end of the 18th century, hardly any case for sovereignty let alone it was a military invasion, now the case of Argentineans is simply muddy and perhaps completely unfounded, no matter if some view Britains’ position there as colonialism (the islands were uninhabited actually in the 17th century). So yes normally EU members should show solidarity and in case of war they should each alone send at minimum a symbolic force (Britain does not need additional tropos to deal with Argentine but a symbolic contribution really counts a lot in the international scene).
Now how about Greece? Do you know what Greece will demand in case of a war wiwth Turkey from the British and the rest of the Europeans? “Please do not aid so much the Turks to endanger our position…”. Cos we have reached that level… Back in 1974 British and US planes had to bomb the Greek military positions and that despite the brand-new dictator (the old one would not do the tricks) had already retired the 80% of the Greek protecting army of the island all that to enable the 3rd and 1st successful attempt. Today if Greece receives an attack from Turkey it can hope more aid by… China rather than any EU country.
And that is the problem of the EU. If on basic things like that we cannot have a common voice, how on earth do we expect to achieve anything financially? Unless you think defence has nothing to do with finance. In case of Greece it is the main problem. Why do you think this little country ended up having enough military equipment to take on the majority of EU countries together (apart the 3-4 big ones)?
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#67. Nik;
You are mentioning some of the problems in Greek foreign affairs, but we miss one with relation to EU: The Macedonia question, further the integration of the Balkans in the EU, which has been blocked by Greece.
Former foreign ministers of the EU countries are now publishing articles in the European press, writing that Greece has been a difficult partner and mentioning the country’s foreign policy and the falsified accounts. These things are not making it easier for George Papandreou, the PM, to get assistance in Bruxelles.
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To Nik (67):
You asked "Why do you think this little country ended up having enough military equipment to take on the majority of EU countries together (apart the 3-4 big ones)".
The answer is... stupidity.
If you are afraid of your neighbor and start pouring money into your military, what you end up is having your neighbor spend more onto his own military. For example, lets take Finland and Russia, a country of 5 million and a country of 141 million, what ever increase in manpower or armaments we would do, Russians could match it and top it and it wouldn't even cost them as much it costs us as they have 141 and we have just 5 million payers.
So outrages spending isn't an option as it can always be matched. Better option is to spend so much that it gives us credible defense capability making sure any invader pays a costly price, but in the same time doesn't alarm our neighbor. Do remember, defending is cheaper than invading. Throw in some nurturing of relations by both parties and with luck both parties just have enough military power in the border to defend themselves.
So maybe less defense spending and more diplomacy could do it?
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Nik @#58
Your input is exactly what I meant in the my comment. You want Europe to come rescue Greece from the mess that Greece is in. Greece is behaving like a spoilt child - having been caught stealing, they are blaming the theft on neighbours/strangers/passers-by/anyone-but-themselves and then seeking Greece's neighbours to pay the fine and the restitution!
That Greek economic mess is entirely the fault of the Greeks who have had the luxury of early retirement, generous welfare provisions, a bloated Public Sector and massive expenditure on weapons and the Greek Armed Forces.
My answer to you is rhetorical - why should Germany or, for that matter, anyone other than the Greeks pay for the Greek extravagance and the position where the Greeks have owned up to the revelation it is the Greeks who have 'cooked the books' and spent the benefits of EU membership on luxuries and avoided ensuring that the greeks pay their taxes to at least partly fund their extravangance?
The fact of the matter is that the Greeks have not accidently fallen into having a poor economy but they have deceitfully and culpably kept false accounts to hide their massive leverage and the gap between income and expenditure. If the Germans were to guarantee any Greek issued Bonds and those bonds fail to be paid by the Greeks because they don't like the austerity measures being imposed upon them and thus "can't pay/won't pay" then the German Governemet will have to pay and that would mean that the German citisens are then out of pocket and the Germans would either have to face austerity themselves or pay more taxes. Some rip-off deal that would be!
If I were German I would tell the Greeks to get on with it. Put their own house in order and pay for their economic mistakes - whether deliberate or accidental - and take the pain. If that means having to retire at 73 instead of 61 then take the pain. If it means less spent on the bloated Greek Civil Service and subsequest shrinkage of the Greek Public Sector then tough it out, take the job losses and be grown up about it. If it means having a smaller military then so be it - Greece is part of NATO so let NATO be your defence (everyone else in Europe hates that idea but puts up with it - why not Greece!).
Whingeing about the pain of austerity and what it means to be Greek is childish. The Greeks economy has been found out to be a castle built of sand and the Greeks have got to take the pain of having been found to have been stealing from the Euro and EU cookie jar .... and the Greeks need to grow up and accept the blame and stop blaming Banks, Anglo-Saxons, Germans or anyone else they can think of (including the Turks!) for the Greek Economic Tragedy which is entirely the fault of the Greeks and no one else!
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Mes68: Mathiasen, valid question but just picture this completely imaginary scenario:
1) Imagine that Ireland and Norway are out of the EU, UK is inside
2) Imagine Ireland and Norway being candidate countries
3) Imagine Ireland selling a weird propaganda about Irish having historic rights in Liverpool, Manchester and all of Yorkshire as well as the rest of Scotland and Wales and openly teaching their kids that it is their duty to reunite that imaginary "fatherland" whose ancestor was king ALfred, king Arthur and Julius Ceasar (all of them Irish).
4) Imagine that Norway says that since Vickings once ruled England, they have every right upon UK and thus all the oil of the North Sea is theirs and that they have to re-define the borders by taking some of the Scottish-north Ebglish coastline too as well as all the inbetween northern British islands.
5) Imagine now US giving ample military support to Norway and having aided it on a coupmlle of occasions to attack the UK.
... and afterall that imagine me coming at you saying "Ah! You British and your problems! You are really a difficult partner...".
Mathiasen, you just cannot imagine the extense of the attack that Greece has to deal. The financial attack is the last in the series and not even the most important, that is the thing that most of you do not realise.
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to marcusaurelius II : yes, i agree with you, a system in which you eliminate the willingness to win money and create his own company is infertile and concerning lobbies do you really think that a small lobby of citizens can fight against lobby which empbodies for example a company which make a turnover of 5 billion dollars a year. You are thinking that my speech on economy is simplistic, of course because i don't want to talk about economy i talk about life and i advise you to read georg simmel and his work on money you will find every answer which urge us to destroy this system based on money like an end in itself.
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@MarkusAureliusII: "That is what continental Europe did ten years ago, recast America as a common enemy to justify its goal of creating a centralized EU stperstate". Not true! The USA has always had a keen interest in the success of the EU. For a number of obvious reasons, such as having a common trading bloc for the European NATO members, given a strong economic bloc is a good guarantee for a strong military alliance. The USA had an interest in stopping the DeGaulle-UK rivalry when the UK joined. It's the USA that pushed many goverments over to support the expansion to the Eastern European countries (to solidify their economic independence from Russia) while most continental countries were not really convinced about the high price to pay (and we should be thankful for that). It has been the USA who has been the most vocal on the need to let Turkey join the EU. Every political analyst will agree with this. The unpopularity figures you are quoting are very misleading, you are quoting the support for the Iraq war. Before G.W.B. the USA was highly popular, and is again becoming popular now. So this all had to do with the popularity of a president, not with the European disliking the American people.
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@Nik: question for understanding: if Greece has such big oil reserves, why aren't they being exploited? I don't think that foreign companies are an issue, since Greece would determine the price for the cocessions.
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Jukka, diplomacy helps Russia and Finland to be friendlier to each other but mainly it works because we are not really into grabs about each other territory.
I know of course you await us coming every hour these past 70 years :o)))), like, come on, another winter war :o)))) but really, how to say, we were never in the mood ever after :o))))
Russian can also remember that you stopped 8 miles off St. Petersburg in 1920-s, but one has to make a mental effort to remember that.
So it helps the diplomacy when there is nothing to divide.
Turkey and Greece have got "a land issue", let's put it this way, so, I don't know, how diplomacy in helpful in such a case. All wars, granted, end by peace, as someone said. So diplomacy a good angle, but not a remedy every time alas.
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#73
@ignace "(to solidify their economic independence from Russia) while most continental countries were not really convinced about the high price to pay"
The only people that paid a high price are the Latvian's, Lithuanian's Estonia's etc.
If you live under the illusion that somehow we saved those countries, then a reality check on your understaing of the situation is needed. If you think an unemployed Latvian is better off because his country belongs to the EU, then think again. An unemployed Latvian is no better off in the EU than he/she would be outside the EU. The only people that benefited from the unemployed Latvian are the Danish & Swedish banks. I bet you if you ask an unemployed Latvian if he cares about his country been in the EU or that he may be able to use the EURO his answer will be "care for what?"
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@Jukka & Nik,
To solve both your problems as well as UK problems, a quick fix to some of Greece's problems maybe for Greece to issue illegal imigrants with one way tickets to Helsinki :)) That way Nik will be happy to try and convince Greeks they need to spend less on defence of their islands and also it will Help Jukka practice his diplomacy skills :))
Also to ease the Euro issue the Greeks should pay the Finns with feta cheese & ouzo instead of Euro. If the Finns don't like that arrangement they should put tarrifs on Nokia phones and with the money they collect buy real phones like iphone or something :))
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To ChrisArta (76):
Unemployed Latvian is better of because his country belongs to the EU. Why? Because Latvian economy benefits on bellowing to the common market thus
..allowing Latvian companies to trade with rest of Europe
..allowing foreign companies to to invest to Latvia with higher confidence
..transplanting modern and developed public and private systems to the country
For example the quite much decried Danish and Swedish banks are modern and developed, they have transplanted western banking and financial system to these countries, they have brought knowledge and stability that has allowed people and organization to save and thus helped them to make better and bigger investments.
All in all, due to belonging to EU, Latvian economy produces much more than it would without belonging to EU. By producing more there is even more to share via benefits and welfare, while not much, it is better than it would be without the added boost to the production.
If you want more solid testimony, then look at GDP per capita in 2009...
Latvia 10,701
Russia 8,874
Belarus 5,122
Ukraine 2,538
http://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28nominal%29_per_capita
Without belonging to the EU and without having European corporations and organizations working in and with Latvia, the GDP per capita figures would be more closer to Belarus and Ukraine.
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@76 ChrisArta: I don't disagree with you. I just pointed out the process that lead to the expansion, which was heavily USA supported/directed, AND in support of the then (and mostly current) political leaders of these countries. I didn't say that's how some people see it now. And you will know better than I do that none of these Eastern European countries saw the USA as the common enemy, which was MAII's theory, and that's what I reacted to. But there is indeed a growing feeling in the Baltic states, East Germany and not-yet NATO/EU countries as Ukraine that the Western system didn't do them much good.
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ig;
"Before G.W.B. the USA was highly popular, and is again becoming popular now."
That is not true. Read the recent history. The re-elections of Schroeder and the election of Chirac where the anti-American card was played most strongly and successfully was BEFORE the invasion of Iraq in March 2003 and only just after President Bush took office in January 2001. There were lots of disputes Europe invented to instigate a conflict such as over import of bananas from former European colonies into Europe at favorable rates, American meat supposedly being tainted with hormones and antiboitics, genetically modified food (what Europeans called Frankenfood), subsidies to Airbus versus Boeing, the Kyoto Protocol and many others. The obstruction of France and Germany at the UN Security Council to one final warning threatening military action if Iraq didn't fully cooperate with the inspectors was the last straw. America had recently been attacked and saw a likey threat of another attack. Had France and Germany just disagreed they could have abstained. But no they vetoed it while French, German, Russian, and Chinese were violating the UN sanctions with impunity and making a lot of profit while their populations seemed at best indifferent to another attack on the US and some may actually seemed to have hoped for it. Europe has more than burned its bridge to the American people, it blew it up. There is no feeling of good will towards Europe on this side of the Atlantic anymore. Those Americans of European ancestry are getting older and becoming a minority. New Americans will be very different and come from parts of the world where history is taught entirely differently from the way it is in Europe. Chinese remember the 19th century as a time when Europe humiliated their Country when it was weak. Indians remeber the Raj and how Britain occupied it. Other Southeast Asians remember European colonial rule. Latin Americans will remember the Spanish brutal conquest of native peoples, the control it exercised, and view the way the EU is treating illegal aliens as felons to be imprisoned before being deported with great anger. And what do you supose Africans think? Many future Americans will be coming from these places. Europe should not expect the kind of relationship with the US it once had. America's focus has turned elsewhere, to China and India and of course Japan.
When Europe calls 1-800-USA-HELP next time the way it periodically does when it fears trouble, the message it will get is that this number has been permanently disconnected and there is no forwarding information. America's special relatinship with Europe is ended. There is no reason for American troops to stay there one minute longer.
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#78 @ Jukka,
In the old days it was the communist party in the Soviet Union that told everyone how wonderful things were there, now it looks Finland has caught that art. Jukka I have been to both Belarus and Latvia in the last 12 months. If you think some bytes of information on the web reflect the situation on the ground you need to think again. Latvia is dead! Belarus is 10 times better than Latvia in every respect. You are wrong 100% in thinking an unemployed person in Latvia is better off because they have western banks there.
A) they could always trade with the EU even outside the EU, so nil benefit there, and for unemployed person even minus, as his government can not impose any import tarrifs on produts made elsewhere in the EU and his government is forced by the EU to kick his out of work and into the streets at -20c
"For example the quite much decried Danish and Swedish banks are modern and developed, they have transplanted western banking and financial system to these countries, they have brought knowledge and stability that has allowed people and organization to save and thus helped them to make better and bigger investments."
They have 25% unemployment thanks to the banks! They cut the pensions thanks to the banks and the EU, they cut teachers salaries thanks to the banks and the EU. Yes, Latvia has many things to thank the EU for.
They have 50% youth unemployment thanks to the EU and the banks! So, in reality if you take out the pensioners, students, under 16, youth unemployment and 25% adult unemployment you have about 30% employment in the country. Thanks to the EU and the banks! And what for??? So that they can join the EURO and ensure they can't devalue their currency so the money the Swedish & Danish banks will extract from them is secure.
They are simply stuffed like Xmas turkeys, they only people happy with that situation are the banks and their political papets, Merkel, etc. If I was a hedge fund I'd bet that the unemployed people in Latvia are not happy with the situation they are in. I'm happy to be proven wrong.
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Re:mes69 (and mes70)
Jukka you said:
If you are afraid of your neighbor and start pouring money into your military….. Throw in some nurturing of relations by both parties and with luck both parties just have enough military power in the border to defend themselves.
And also:
So maybe less defense spending and more diplomacy could do it?
I say:
You do not seem to be getting it. Greece has done nothing to deserve any Turkish aggressiveness. We could set aside the fact that Greeks are a nation that suffered repeated Turkish violence and even genocide of 1,5 million Greeks and the outsting of another 1,5 million as well as the invasion and ethnic cleansing in Cyprus. The problem is that this continuing extreme violence does not have an end. The country is under constant threat merely for wanting to apply their sovereign rights. Is there something you do not get? Do you propose less arming in relation to that? Tell me 1 case in history when a country fended off 1 aggressor by disarming itself. Greece is trapped and arming is a single way. The only solution for Greece to be armed less is to have the guarantee of some support from whatever friends it can find. Can we be based on you Finnish for help? I do not think so. The situation is so pathetic that we are at the point of pleading to the Europeans to try and stay as neutral as they can and not help Turkey and to plead to the UK to aid Turkey as less as possible (cos it is certain they will aid them against us, usual business for them…). We never asked help. We ask the very basic of neutrality. Greece has soverign rights and it is up to it to apply them. We only ask that. Nothing else.
You said:
Your input is exactly what I meant in the my comment. You want Europe to come rescue Greece from the mess that Greece is in. Greece is behaving like a spoilt child - having been caught stealing, they are blaming the theft on neighbours/strangers/passers-by/anyone-but-themselves and then seeking Greece's neighbours to pay the fine and the restitution!
I say:
Caught stealing, caught misbehaving blah blah. Easy catchy phrases. They are even used in Greece by some slave-journalists. Is the fact that the bulk of the Greeks working for less than 1000 euros, often uninsured in a country of prices more expensive than most European countries accounting for stealing and misbehaving? Are you referring to the political mafias that plague the country since and even before the dictatorship (during… I do not even discuss it)? Do you ask yourself why the Greeks kept voting for them? Well ask yourself first how is it possible for Americans to write 1 only congratulations letter 1 month before the announcement that there will be elections… We are talking about only country in the world where US, not so many years ago, placed a dictator to do their tricks and finally even him lost their favour and so they paid the leftish (sons and daughters of military people!) to do an as-if revolt (oh yes, it is this leftish pro-americans that still govern us! FYI) so that a new dictator, more obedient, could rise
You said:
The fact of the matter is that the Greeks have not accidently fallen into having a poor economy but they have deceitfully and culpably kept false accounts to hide their massive leverage and the gap between income and expenditure.
I say:
Oh! I did not know that Greek governments could be so effective as to cook financial books in secret so that nobody apart them would know and the truth came out only thanx to the good work of some US private financial control organisms. Now bad Greeks ask for more eh?
Well actually no. Contrary to European perceptions, Greeks ask for nothing. In fact, even in the past, they have never asked for anything. It is the EU (and there you can say whatever you want) that kept pumping packets in Greece to be eaten by the sharks and their company and everyone knew very well what was going on. But citizens in Greece had no way of reacting on that, afterall they were hardly ever informed what money came from the EU and what was the debt exactly.
Now the vast majority of Greeks since entry in the EU got poorer, for your information. The country’s productivity fell downwards. The easy EU money given was what empowered the political mafias and their financial orgies. Keep that for yourself. There was only 1 main reason that Greeks rejoiced when they entered the EU. They thought that EU membership could eventually become a political deterrent against an eminent war with US-supported Turkey. However, it proved quite the opposite: it pushed US to push even more Turkey against Greece that became a testing area against the whole EU.
As I said. We do not want anything. Tomorrow we start drilling oil to pay off 10 times the current debt and have spare to pay your debt too. Only that in 10 hours Turks (they need many hours to prepare, they are quite slow you see…) attack on a total-war scheme plan to destroy Greece. And so, the only thing we ask you is to be united and try keeping somehow the US as further away as possible, and to tell Britain stop supporting the criminals and you the rest just stay out of that and keep sending spare parts for our few anyway European arms (cos you never protected Greece enough so it can buy more from EU companies and not US ones). The rest we can handle. Are you willing to do this minimum?
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It seems nobody takes responsibility for the consequences of their own actions anymore. Greece is Europe's fault, it's America's fault, it's the speculator's fault, it is anyone's fault but Greece's. And the EU's obligation? The time to complain about the size of the bill for the meal is not when it arrives after desert but before you walk into the restaurant. The time for German, French, and even British taxpayers to demonstrate their opposition to bailing out the PIIGS was when they were being sold a bill of goods about how the EU and Euro was going to change Europe into an economic, political, and military superpower. They didn't, instead they bought the dream, the myth, no matter how preposterous it was. A siren song that was music to their ears, a rather sour note now. Amid howls of protest, I believe Germany, France, Holland, and even the UK will foot the bill for the PIIGS. All of it. Their taxpayers will pay through the noses and the PIIGS will be on an austerity budget comparable to what they merit based on their productivity in a competitive world in a global recession. Grim all around. That's another difference between Americans and Europeans, Americans don't trust their government ever. Even when it is telling them the truth.
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Nik,
With the greatest respect, you are talking drivel if you really, really do mean to say that Turkey will be invading Greece 10 hours after you discover oil in Greece.
The truth is that Greece uses the fear of Turkey and emnity with the Turks as a reason for massive spending on the Greek Military. It is time to wake up and realise that Greece AND Turkey are now in the 21st Century and that war is no more imminent than Germany riding to the rescue of the Greek economy.
It is time that Greece woke up to the fact that they cannot afford the current massive spending on their military, nor their welfare provisioons nor their bloated civil service. The Greeks just need to grow up and face the music for spending beyond their means.
Meanwhile, if the Greeks do find oil then good luck to them. I recommend having a look at the end of the next rainbow you see .... there will be a crock of gold there and you never know, it might be an oil field!
And, finally, if the Greeks do secede from the EU because the Greeks are worse off for being members, the Greeks will have my gratitude because the day that any country leaves the EU will be the day that the United Kingdom will wake up, smell the coffee that has the aroma of life outside the EU being better than within it, and begin to follow the other secessionist nation(s) and leave the EU too!
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Marcus:
"The time for German, French, and even British taxpayers to demonstrate their opposition to bailing out the PIIGS was when they were being sold a bill of goods about how the EU and Euro was going to change Europe into an economic, political, and military superpower. "
In case you haven't picked up the vibe from the numerous posters on this blob Marcus, the taxpayers did not have an opportunity to demonstrate their opposition to the bill of goods which was sold in their name.
The EU institutions have been a law unto themselves. The only slight democratic participation has been more carefully stage managed than any soviet farce, and indeed even then it never had any real chance to stop the EU bankers doing what they intended to do.
This has been, just like in the soviet union, an example of party executive power over the commanding heights of the European economy. The political parties, NOT the elected representatives in the member states, have been appointing their pet officials to the Commission, the ECJ and various ECB boards. Not having them elected. Appointing them. Appointment by the parties who created the EU institutions has been the way the EU has been built. It has been too important to be left to the idiot masses to meddle with, you see.
It has been a silent coup, insofar as there has been no gunfire or mass violent demonstrations from the people. But it has been a coup, nevertheless. The people of Europe were not invited to take part except as spectators, and the entire edifice has been designed and built by the party executives, not by elected members of the parties. The elected members of the various dominant European parties merely rubber stamped the decisions made by their executive leadership, and kept the people out of the matter.
Even now, the treaty does not allow the European Parliament to scrutinize or even comment on financial matters. The ECB is entirely a self governing, self regulating, self appointed organization. Much like the British monarchy and lords, but we wont go there just now.
In basic terms, the EU was created so that the bankers could have unfettered access to monetary policy throughout the Eurozone. Unfettered by any democratic oversight whatsoever. Now the result is plain to see.
Let us be clear about what has happened. Let us not pretend that the people who make money from the current situation were somehow ignorant of the likely consequences of their actions.
"Qui bono?" is the old prosecutors question, and it is always worth asking. Who benefits from the current system?
Clearly, the bankers. How have they benefited? Because they have been able to oversee truly massive public spending programs that created huge debt to themselves, in the name of the European taxpayers. And now that the taxpayer in southern Europe can't pay, the bankers expect the northern taxpayers to pay for them.
Do you imagine that was accidental, or unforeseen?
If all the bankers had wanted to do was lend the PIGS money, they could have done so without the artifice of the EU. What the EU allows them to do is to lend to the PIGS and get paid by the rest.
Now as for all this talk about how the deficits were Greece's fault, and that the greek government was to blame...... that is only partly true.
The fundamental data regarding the economies of the PIGS's was knowable and known. Everyone knew what was going on. The data was clear. Spain was experiencing massive growth due to an internal property market boom, fueled by cheap credit. The other PIGS's and eastern Europe were likewise experiencing boom times due to easy credit. All that credit was underwritten by the ECB and the sanctity of the Euro currency. But there was no doubt about what was going on. Greece did not "lie". And just so, the EU architects were not fooled by the data. In the final analysis, they didn't care. Why should they care? They don't care if Europe suffers massive taxes as a result of their policies. All they care about..... and this is something I wish a few more folks on this blog would try to understand.... all they care about is profit on their loans. Why do I say that?
Because folks, they are BANKERS. And what bankers do is they lend money and make a profit by collecting the interest on the loaned debt. That is what bankers do, it is what they have always done, and it is what they always will do. It is their trade, their ethos, their way of putting bread on their table for their children. It is why they get bonuses, and why they decide to do everything between getting out of bed in the morning and going to bed at night.
And they have done it. They have lent incredible amounts of money, and they are secured payment. Because of the EU they set up and control. And without interference from the democratic will of the people of the member states. It is a very neat trick, and it has been successful. The only way it can fail is if countries leave the Eurozone and start printing money, essentially defaulting on their debts.
And that isn't going to happen. Why? Because when Europeans go to vote for "their" representative in the member states, they are voting for party members from one of two dominant parties who are both owned by the very same bankers who hold the debt. Because they don't get to vote on what the ECB does, and the ECB and the Eu institutions are appointed by the financial elite of Europe.
I think people on this blog need to start looking hard at who is involved and has been involved in the creation of the EU institutions, and start asking why it is that a system created by parties sponsored by bankers has created a system where bankers get paid no matter how reckless their loans.
Bankers WANT to make reckless loans. They WANT to get paid interest from every person, company or government that asks for a loan. Because that is how they make profit, you see. What the EU does, more than anything else, is ensure that the bankers of Europe can have what they dearly want. They can loan money to anyone at all, in terms of governments, and then sit back and wait for the taxpayers across Europe to foot the bill. They cannot lose.
Does anyone really think that is an accident? A lucky accident for the same people who sponsor both sides of the two party system?
Bankers WANT European taxpayers to be in debt. As much debt as they can collectively handle. Because that is HOW THEY MAKE THE MOST MONEY FOR THEMSELVES.
Well, we are there now.
And it is an accident? Please!
There was no concealment of the economic situation in the PIGS nations, nor anywhere else. I was there. I heard all the banker and investment types talking about the future and what would happen. There was never going to be a recession. The PIGS were going to grow their way out of the mounting debt, and everything was going to be rosy and wonderful for everybody, especially the taxpayer. Listen to Jukka now, if you want to hear the mantra recited ad nauseum, even when it is transparently false. The mantra was that the debt would lead to unending growth and so it wasn't a problem.
And do you guys know what happened to anyone who said differently? Do you people understand what happened to anyone who did not toe the party line in Europe?
They got fired. They got let go. They failed their economics exams. They were not hired. They were passed over for promotion. They were given unsafe seats to contest, or cold shouldered from party meetings. They were sent away to places nobody would hear from them. They were spoken about in hushed and critical tones, and called trouble makers.
Everyone knew, and nobody said anything. Because everyone was desperate to get more money for themselves.
And in the end, the bankers have done so.
The EU is not in "crisis". This is exactly how it is meant to operate. This is government by the bankers.
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dt;
"In case you haven't picked up the vibe from the numerous posters on this blob Marcus, the taxpayers did not have an opportunity to demonstrate their opposition to the bill of goods which was sold in their name."
It is you dt who doesn't get it. You have the typical European mentality. "They" lay down the laws. "They" tell us what to discuss and debate. "They" call the shots, play the tune, and we jump when they tell us to. Docile, subservient, unwilling to take the initiative of course they are steamrollered by their own government, by the supergovernment in Brussels, by whoever cares to lord it over them. I haven't seen or heard of even one serious movement or party in any EU country to oppose the process or the government in power that was driving it.
You don't know much about my country either. Here is how it was invented;
From the second paragraph of The Declaration of Independence;
"We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are life, liberty and the pursuit of happiness. That to secure these rights, governments are instituted among men, deriving their just powers from the consent of the governed. That whenever any form of government becomes destructive to these ends, it is the right of the people to alter or to abolish it, and to institute new government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their safety and happiness"
In the United States, the government is owned by the people and serves them. In Europe the people are owned by the government. This is what they accede to. This is how they see life. This is why they don't protest even meekly. Where are the demonstrations out in front of the Parliament in Germany, France, Britain even today demanding that their governments not bail out the PIIGS with THEIR money? Where are the protests, where are the organizers? What do you think out Tea Parties are about? What is the symbolism there, why are they called Tea Parties? Hint, look at how some of them are dressed in colonial atire of the eighteenth century. This is not a joke. If the US government doesn't start showing results that benefit the overwhelming majority of Americans soon, we are getting ready to overthrow them....fortunately we can do it peacefully at the polls next November.
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Marcus, if you accept that the European two party system is run by and for the bankers, then it applies just as much for the mighty USA as it does for Europe. More so, in fact.
The US government is not owned by the people. It is owned lock stock and barrel by financial corporations, just the same as in Europe.
And lo and behold, the taxpayer in the USA is paying for bankers to make profits on bad loans.
You have a patriots eyesight, Marcus. You can only see the problems in other peoples houses.
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dt;
"And lo and behold, the taxpayer in the USA is paying for bankers to make profits on bad loans."
That is why we are on the verge of open revolt against the government. All incumbents of either party will feel the voters' wrath come November. They know it, that is why they are fleeing. They are quitting before they are thrown out. Anger in America is running very high and we know exactly who to blame. Those who replace them are on warning that unless they come across with policies that benefit the majority of Americans, they will be next. Against the overwhelming majority of voters, the bankers and government are powerless.
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democracythreat @ 85
MarcusAureliusII @ 86
Thank you for your passionate but very incisive insights.
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democracythreat @ 85
MarcusAureliusII @ 86
Yes, if blogs are taken over by a few extremists, no-one but extremists will participate. BBC, please limit postings to one per day per contributor (same email address).
And why is Gavin so preoccupied with the Euro? If the UK, with its huge deficit, was using Euros we might have something to worry about. As it is, a moderate fall in the value of the Euro would be welcome, bring it closer to its original parity with the dollar (1.168 compared to 1.359 now), and help EU exports.
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I believe that if Europe doesn't intervene (by say, individual nations voting for it) all heck will break loose--
Get it together..fast
Europe..its already been predicted... the demise of Greece's economy otherwise. Is that the Guilt you WANT on your consience?
Starving angry Greeks on your doorstep?..hmmmm.
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You already have starving angry ..other types of millions there on your doorstep..sad, but true.
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@90 Hibou,
both DT & MAII say what they think, they don't insult anyone and if have any ideas better than theirs, less extrem let us hear them. I'm worried more about your extrem views such as to ban people from writting what they think and the BBC not to report on the EURO.
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Re:74 Ignace. You are the first to ask so. The answer can be very simple: For the same reason that Arabs had to be divided in petty Emirates and ruled by ultra-religious local mafias, for the same reasons that Iran has to be internationally isolated, for the same reason that Lebanon fought a horrible civil war, for the same reason that Israel and Palestinians will keep fighting, it seems, eternally... don't you see the pattern? Greece just like Turkey was and still is part of the Middle East according to most geopolitical US manuals.
At the end of the day, there will always be people who will discard the whole case saying they are just ignorant fools that deserve what arrives on them. Palestinians are extremists, Iranians are blindly over religious and Greeks are just local mafias eating Europeans’ money.
It seems that Greeks are just accused of financial lazyness. But I said 10 times and I will say it 100 times. The financial side of it was never an issue in Greece – it is the geopolitical side that leads events and situations and it was like that and is and will remain for really long.
Back to the Aegean oil. I saw some of you laughed at it. It is of course easy to discard the case by saying “if they are not already extracting it, apparently there isn’t any substantial quantity and it is all an excuse”. Nice logic, indeed!
However, the truth is quite the opposite. There are enough quantities to bail out Greece and many other EU countries together multiple times. But – AND HERE IS THE PROBLEM – down to the basics, it does not even have to do with the global control on oil, it is much deeper and even predates the industrial revolution. The more in-depth answer takes more time and it will take you back in time + you will need to open a google earth page to see the area to understand.
Now you know well that it is the commercial paths of this planet that largely shaped its political, military, national and even religious landscape. And there were always certain commercial paths that remained all times classic. Such one was the India-Arabia-Palestine- Egypt & Greece & Italy line of commerce that practically linked all of East Asia to all of Western Europe and north Africa. Accidentally I included there most of the most important ancient and medieval civilisations. Another smaller but largely important trading line was the Ukraine-Greece-Italy & Egypt and the rest of the Mediterranean. Ancient Greeks largely profited from both lines but mainly from the latter since in the former they had also other competitors such as the Phoenicians (then working for Persians). Old stories eh? Ok… lets put aside the rest and keep the “commercial line” in our minds.
Just before leaving history I will mention the following:
Russian-Ottoman war of 1568-1570
Russian-Ottoman war of 1676-1681
Russian Ottoman war of 1686-1700
Russian Ottoman war of 1710-1711
Russian Ottoman war of 1735-1739
Russian Ottoman war of 1768-1774 (“Orloff war”, it started also the 1st Greek revolution)
Russian Ottoman war of 1787-1792
Russian Ottoman war of 1806-1812
Russian Ottoman war of 1828-1829 (It happened because of the 2end Greek Revolution)
Russian Ottoman war of 1853-1856 (Krimean war)
Russian Ottoman war of 1877-1878
Does this have anything to do with the need of Russia to link itself with the Mediterranean world? No! Not at all! Who said that! And guess what had been the position of Britain and France and the rest of the company? Of course 100% supportive of Russia and even advised Ottomans to open freely their passage to the Russian ships and to give autonomy and political rights to all Christians in Europe and Minor Asia! What else should I say! People are so naïf that they might not even understand the above irony…
You understand that this need of Russia did not cease to exist even under the USSR regime (well even more then, since Turkey was a staunch US ally). And now we reach to today’s world where the cold war is 20 years over … or so we believe… And were Russia is willing to actively pursue at least its basic geostrategic targets which concern its periphery.
So how Greece is implicated in that need of Russians if afterall it is Turks that occupy the channels of Bospohrus? Well, Turks might do so but anyway the channels are international waters by treaty. The Aegean waters though are not subject to this particular status. Now, according to international law (which by the way is signed by the Turks and applied by them to all their coastline!!!), Greece is entitled to have a 12-mile zone around all of its land including islands and even rocks. Given that the whole of the Aegean belongs to Greece (apart the 2 small islands in the mouth of Hellespont, the western part of the passage to the Black Sea, given by the British to the Turks in 1923 – what else…) this means that the Greeks by applying the international law close the whole sea making it their own lake. International passages are accorded but are not dictated anymore by open-sea-style geography but by the Greek jurisdiction – i.e. Greeks are obliged to give a passage but from the places themselves dictate. It makes no difference for the international shipping industry but it makes huge difference for the Greeks and of course huge negative difference for the Turkish who in a way control the Bosphorus without having any real control while seeing the Greeks enjoying full control of the whole Black-Sea – Mediterranean passage since the Turkish coastline is so close to Greek waters that no major maritime routes can pass from there. This alone is seen by Turks as a major handicap. On the top of this comes also the large quantities of oil that exist in the bottom of the Aegean sea, and mainly the northern Aegean, guess where is this? Around the area around the island of Thasos and along the coastline of Macedoooooooniiaaaaaaaaaaaaaa. Say all Aaaaaaaaa? Aaaaaaaaaaaaa! So now you know why Alexander the Great is currently being baptised a Slavic Tzar and his horse Voukefalas a Zastava (old Jugoslav car manufacturer…) – but then again even that is not the whole part of the story. As said, first comes the access to the sea, for everybody. And Greece remains the key.
The US target is simple and not any first-seen! Greece could jump at some point to the other side… so put them some threats around… it is the fear that keeps the sheep inside. On the east the threat of the arguably powerful Turkish army, on the north the threat of armed Albanian and/or Slavic guerrilla coming down and massacring Kosovo-style the Greeks towns. Local illegal (muslim) immigrants could potentially be guided by Turkey to act accord to its wishes. US & Europe intervene Cyprus/Jugoslavia-style and the whole place is reshuffled. New fantastic lands are created out of nowhere and among them a brand-new Macedonia where no Greek will be living, a western Thrace gone 100% muslim (no Greek will be living there too…) with Greeks being lucky to survive in and around Peloponesus and 1-2 remaining islands in the Aegean.
Attention: nobody said that this will certainly happen like that. Fantastic scenario, very real conditions for its realisation.
But the problem is already there. What I say is that this is what the US prepares so that it keeps Greece under fear and weak enough not to be able to get out of its grip. In that sense, the question of the Aegean oil comes as a secondary – as a side effect of the whole US-Russian conflict in the area! The point for Greeks was always this: entering the EU was supposed to imply a certain level of stability for the country in terms of its surrounding. In reality things got even worse as no European is willing to do anything about that, i.e. no European is willing to work on the enforcement of sovereignty over EU land!!! Which is downright amazing. Imagine that we sit and talk about economies when we have not resolved the basics of sovereignty. And you have to put it good to your mind – following a horrible NATO treason in Cyprus, Greeks joined the EU mainly for that reason, hoping one day that the EU would become some short of balance in the world inbetween US and Russia, protecting in that way their very land. something that EU countries do not seem willing to become. When Greeks ask for solidarity, this is not all about money, but political support which the EU never gave. As said 10 times above, give the support and the oil revenue will cover 10 bail-outs plus your own ones… kind of saying, we’ll keep it all our selfs since we are selfish local mafias.
PS: Message 85 by DemocracyThreat though coming from a different angle describes elaborately why countries are overloaned. But it is not an EU-restricted phenomenon of course.
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First of all just a quick point on the 'conspiracy theorist' label, which has been used by the media (British or other) with the same ease as 'extremist'/'fool'/ to discard certain positions. Rather than judge somebody as good/bad, sane/insane, healthy/leper it is better to engage with their argument.
Yes the Greek state of financial affairs is in a mess. Yes it is the weakest link in the eurozone. All of these points are absolutely right. But it is different to say that Greece's finances have been managed badly and different to say that all this (including the reporting) is fair game. Markets bet (yes this is what they do) but who gives them the right to bet against a state and its people?
And another point on the defence of the current reporting of Greece's troubles. A basic understanding of how journalism works would actually tell us that the British press undeniably is closer to sources from the City rather than any other part in this situation. So a certain bias is to be taken for granted.
Let me see how people in this country would have reacted if the markets were gambling against us. But then again we have bailed out almost all banks, in order to see them with record profits 1 year later and then betting against Greek people. But then again what do we know...
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@DT,
You are on the money! The Bank of Italy chairman that may make move to the ECB worked for Goldman Sachs in his past around the time Greece (and perhaps more countries) were taking out loans that were made look like investments :)))))) So, there is still more to this story than meets the eye!
It looks like Goldman Sachs made $700m profit out of that scheme:))
And what's more Eurostat knew about it!!! Mathiesen, we need an enquiry into Eurostat, either they are part of the game or useless either way an inguiry, is needed
And two weeks after the famous "we have a sneaky plan, to save Greece and other Eurozone countries, from speculators" statement from the Eurozone ministers we still haven't seen a plan and the talk still appears to be "one foot away from my rear and I don't care on whose rear it lands!!" I think the plan follows your scenario, let the situations get desperate then pay the banks and turn around and tell us "well, there was no other option left".
So, the Euro, pound or dollar unless the banks are turned back into banks are not safe, they will be there for speculators to bet on and for banks to either award themselves bonus or only huge salaries:)
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Quite funny, currently in France and none of the papers are going on about the Anglo-Saxon conspiracy. Seems to be a double-think strategy dreamt up by the isolationist UK media to create this impression. Probably a good idea for Brits to start reading news media from outside of the UK, as it is often more reliable and less inherently biased against everything with Euro in the title.
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We have to clarify 3 things:
1) The current crisis was provoked largely by the activities of US private investment groups combines with the catastrophic action of Mr. Papandreou (a US citizen with known links there)... something that was not so much commented (only in Greece, internally). In a sense Mr. Papandreou is part of the attack on Greece and in Europe (and his comments on EU were showing this)... as well as the comments of Russians ("Greece" should go to the IMF to solve the mess itself created").
2) The bad state of Greek economy is by no means related to the activities of these private investment banks but is rooted more deeply. And that is why this crisis is related to no1. This crisis could as well happen 5 and 10 and 15 years back as Greece's economy was in bad heading heading to nowhere. Under what logic back then it was deemed as a country that could pay? Mes85 explains a big part of the reality.
3) Explanations on purely financial issues are not enough and remain in the surface. Yes Greece this, Greece the other, .... yes, but why? As I explained extensively the problem is as basic as the geography of the planet itself. The position of Greece imposes it either to be the ruling nation in the area, either the weakest link - there is no middle way and there was never any mid-way in history anyway. So either Greeks have to assert themselves of beg to the last penny. However, Greeks asserting themselves - something very positive for the interests of EU and the rest of Europeans anyway is strictly against the interests of the US. Europe has conflicting interests there since it is dependent on the US thus it is unable to protect Greece on its effort to stand up. The result is that Greece still remains a largely US-ruled/ruined country (no hard feelings to fellow Americans, its pure ice-cold geopolitics here we're talking).
4) The ruling over Greece for more than 50 years (more or less by the circle that the British had installed in 1944) has been based in 1 main axis: make Greeks dependent. So this traditionally very intelligent, active, individualist, commercial and inventive nation that even under the oppresive Ottoman Empire had managed to built large enterprises (mainly having to do with maritime commerce), progressively became dependent and incapable of taking any initiative (note this word INITIATIVE, then search what dear Henry Kissinger had said about us and you'll get the point - call it conspiracy if you want, I call it simply cold-blood geopolitics).
5) PLEASE NOTE THIS so as to avoid all those comments above: All the above are NOT to be taken as any excuse from the part of Greeks to explain why they failed to perform and they found themselves in that situation. Greeks have been sleeping deeply, they have been easily manipulated, they have been tolerant of a few foreign-based but very much local mafias to rule not only the country but their lifes - they have tolerated for long having to beg a political party to get a job for their kids, they have participated very actively in the most idiotic left-right battle that was ever presented in a European non-ex-communist country including a horrible civil war they were dragged in by British manipulations during the horrible WWII occupation by the Nazis. Either they like it or not while Greeks as individuals are generally highly educated and very intelligent, Greeks as a group must be the most naif and stupid nation to circulate in Europe, they are ready to believe just anything and be disappointed and let down again and again - and that patially explains why they kept voting for long the same and same people. The other part of the explanation is known: parties rule the circulation of money, thus you have to adhere somewhere to have any hope of doing something in that society.
6) All the above together and in equal measure are very good reasons why the EU should NOT aid financially Greece, and whether you realised it or not, a large part of the Greek nation (possibly an easy majority) do NOT want to be bailed out. And that is not due to any fear of losing financial sovereignty or any national pride – as said, Greeks are one of those nations that do not get attached to their state since their nation pre-existed this state and lived and thrived under various state formations.
This has to do with the by now well understood idea that it is time to take measures. Naif Europeans think that measures are increasing the age-date (only a few 19th century communists argue on that, the majority of Greeks were always ok – what they care most is not to work 1-2 and 4 years more, but to be assured that they will receive at least a portion of the money they gave while working all those years, and the problem is that this is under attack…and the bulk of Greek pensions are nowhere near what you think… its survival), changing the social-security and health system, reducing the defense costs
This has to do with the by now well understood idea that it is time to take measures. Many Europeans think these measures have to be things like increasing the age-date, freezing and even reducing salaries and cutting off benefits, reducing the public sector, reforming the social security and health system making companies and individuals pay their tax, attacking the black market etc. But what Europeans do not understand that is:
1) the measures against the working population that abides to the rules (since they cannot do otherwise), will not even give a breathing space! Just to give an example, as things are, the increase even of 3 years of the retirement age will give a breathing space to social security of about 4 to 6 months (i.e. making a hole in the water…).
2) The measures against the… involuntary tax evaders (i.e. normally honest people who are pressed to tax evade to survive their businesses) – and that includes mostly start-ups who are simply fought-off by the system (explaining why there is so little business initiative in the country and a will to become rather civil servant). I.e. doing sos before changing the architecture of the taxation system will simply shut-off the last faithfull of private initiative!!!
3) the measures against the malevolent tax evaders and the black market … here is the big game… so… whom does this include? Large families – let me throw in the air and without any proof… some of them in excellent relationship with Americans, other hosting prince Charles in his summer vacations, other organising the Olympics, other simply being all but in the name the public construction company taking 80% of projects and with a past as double US-East Germany agents… i.e. the kind of people that fund not only both major parties but also even the minor ones! These people who maintain a whole political system in the country which in turn to maintain a basis will take state (largely loan) money to spread it among “their own one”. From there one you have all these professions (doctors, construction engineers etc.) or civil servants with a stamp on their hand that simply can tax-evade and will keep on doing it (like ANY citizen of ANY country would do if he could – and spare us the moral teaching!) unless the state starts taking possessions and opening prisons especially for them – something which I doubt any political party (apart a totalitarian – which obviously I do not endorse!!!) would ever dare. So in a few words, EU calls the very same people who played along mostly willingly all that mafia game all those years to give a solution! Like asking Al Capone to bring order and organise the investigation of financial cases! Well, do you think they will willingly give back what they stole? Of course not, it is already in Swiss and Cayman island banks. The other option is
There is a third option. There is a silent majority of around 70% of Greeks including all social classes up to the few remaining local industrialists and mid-sized ship owners. And there is a will to turn a page. There are things to be made in Greece. Bailing out will simply erase this chance. What Greece needs is political support to get on with a clear planning of re-becoming what it knows best: the intersection of the traditional commercial lines passing from the Mediterranean. Aegean oil may follow but it is not even the foremost. SO we talk about Greece needing from the EU words not money! For once, helping “is so easy” (of course in reality, as explained it is not as both Greece and bigger EU countries alike are trapped)….
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Freeman "The record for the EU on being open and welcoming whistleblowers is not good."
By not good, do you mean worse than the US and their so called unpredictable financial crisis that we still suffer from all-around the world?! Just asking.
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DT (61): Nice post, only slightly marred at the end by an unwarranted reference to the Westminster system.
If we don’t reduce bankrupts (individuals or states) to slavery or indentured servitude to work off their debt, then it is inevitable that their creditors will take some loss. It is actually desirable that creditors should accept the risk of losing some of their money into account when making a deposit. A great deal of this recent recession was due to banks becoming viewed as a commodity item where a saver regarded an Icesave the same as the most reputable bank in the world, and placed his deposit in whatever institution offered the best rate. If savers henceforth take risk into account when making bank deposits then something good will have come from the recent credit crunch and we will be well on the way to ensuring it does not happen again.
Whenever you see one industry paying so much more than any other, you can be sure there is some kind of monopolistic practice at work. You put the blame on a political system which has somehow been captured by the bankers with corrupt politicians putting the banker’s interests ahead of the voter’s interest. I see it a little differently. There is clearly a lot of public anger with bankers, who are never the most popular of people at the best of times. A good deal of this is driven by negative human emotions, particularly envy of their high pay. I believe that politicians are actually responding to the public mood and seeking to express it in the form of punitive regulation that has little relationship with the interests of either borrowers or lenders.
Ask yourself who really benefits from heavy-handed banking regulation? The only people who can afford all the specialist workers needed to comply with all that intricate regulation are the existing banks. The regulation is actually one of the barriers to entry for new banks. When there are no new banks able to enter the market and undercut the existing players the result is a quasi-oligarchic industry whose inside players can extract near-monopoly profits in the form of very high pay. So all the negative emotion from the coalition of the Left and the instinctive over-regulators in Paris is actually the root cause of the high-pay that so inflames their own sentiments.
The surest way to cut bankers pay would be to introduce more competition. The surest way to do that would be to sweep away the barriers to entry in the banking industry, of which the costs of complying with regulation is the most significant. This however would run directly counter to the institutional self-interests of the Brussels institution in expanding their own power through the growth of European regulation, the costs of which falls on those who must comply and never on the EU budget itself. When you add the EU institutional self-interest in more regulation, to that of the existing coalition of Left and instinctive over-regulators the result is likely to be even higher barriers to entry to the banking industry and even higher pay. Even if this coalition could impose their regulation worldwide it would only diversify the industry geographically and not reduce the monopoly profits that its insiders can extract in the form of high pay.
The enlightened public interest would instead seek more competition in the banking industry. When the UK state sells off the banks taken over to prevent their collpase, they should be sold as competing entities. In the post Great Depression USA there were restrictions on banks operating in more than one US state to prevent giants emerging, the failure of one of whom could risk the entire banking system. Today we need to break up the global giants like HSBC, Barclays, UBS and all the others to introduce real competition and reduce systemic risk. Instead we are likely to get EU regulation that only these giants can afford to comply with.
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Jürgen Stark (European Central Bank (ECB)): “Great Britain has a budget deficit of the same magnitude as Greece. The US budget deficit is also more than 10 percent of GDP. All advanced economies are currently having problems. In fact, it is astonishing to see where most of the criticism of the euro is coming from at the moment.”
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External debt (source: CIA the world factbook):
Rank
1 United States $ 13,450,000,000,000
2 United Kingdom $ 9,088,000,000,000
3 Germany $ 5,208,000,000,000
4 France $ 5,021,000,000,000
5 Netherlands $ 2,452,000,000,000
6 Spain $ 2,410,000,000,000
7 Ireland $ 2,387,000,000,000
8 Japan $ 2,132,000,000,000
9 Luxembourg $ 1,994,000,000,000
10 Switzerland $ 1,339,000,000,000
11 Australia $ 920,000,000,000
12 Canada $ 833,800,000,000
13 Austria $ 832,400,000,000
14 Sweden $ 669,100,000,000
15 Hong Kong $ 631,100,000,000
16 Denmark $ 607,400,000,000
17 Greece $ 552,800,000,000
This entry gives the total public and private debt owed to non-residents repayable in foreign currency, goods, or services. These figures are calculated on an exchange rate basis, i.e., not in purchasing power parity (PPP) terms.
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Greece2000 well exactly. In the list you presented we could argue that every country pretty much has borrowed according (more or less) to the size of its economy. Greece might be a bit higher not so much because of "money eating" (as people will think) but because the same project in Greece costs 2 times and in some cases up to 5 times more than it being implemented in most of the other countries (remember? geography? 1O0 mountains and 3000 islands? send private companies to connect all that, and wait). Concerning the sharks, these will just eat any sardine pack-size given but the pack is not defined by the sharks’ apetite but by the sea conditions.
However, what makes things more difficult for Greece is that it has no major productive base to defend its case of these loans as most of the aforementioned countries have to a sufficient level so as to guarantee the repayments (or at least pretend to have one of such a level).
Still the above remark simply is not any explanation. One should wonder, why did they do it now that Greece – despite not yet taken the needed measures – is on the verge of starting some extremely interesting projects such as the Russian gaz pipeline and the commercial connection with the Chinese while nothing such happened 10 years back when Greece, after already completely de-industrialised (that happened in the 1980s of course!), was getting more and more indebted to organise Olympic fiestas which are widely known to be a whole in the budget even for decades even in much larger countries than Greece, the smallest country to ever organise modern Olympics (and the first post-2001! I.e. with double the cost!!!).
And how on earth does this escape us that Mr. Papandreou goes even against the will of many of his party members to deteriorate the relations with Russia and China with an upper thinking of cancelling all agreements or at least freezing them or at minimum substantially delaying them. The Russian reaction to Mr; Papandreou was ice-cold. Understandable!
Lil’ George Papandreou’s most well known statement : “I am interested in working for constructing a framework of an international government”… EU is not his case, let alone Greece, a country that still is a strange land to him. If you did not understood, this guy attacks the EU right now and in parallel Russia, let alone attacking the interests of Greece!
You should see what other measures he has planned to take to be convinced that he is no no real plan of reducing the deficit but merely working for his “own guys”.
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Marcus aurelius "In the United States, the government is owned by the people and serves them. In Europe the people are owned by the government. This is what they accede to. This is how they see life. This is why they don't protest even meekly."
Oh Marcus, still believing that he lives in DisneyUSAworld, so funny and pathetic...and as for the capacity to protest being a sign of democracy, then I guess the French must have the most sound and vibrant democracy in the world, for no people around the world protest more than my countrymen! Thanks for the unintended compliment Marcus Delirious!
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Greece2000 (102): Your figures are irrelevant for the following reasons:
1. They mix up private and public debt. If some US or UK private citizens go bankrupt it does not bring down the state. Greece public debt (102.6% of GDP) is far higher than in the USA (70%), Germany (68.8%) or UK (56.8%).
2. They only consider debt held overseas, but the Greek state will need to pay back debt to all its bondholders, including Greek institutions and citizens.
3. For the same reason the figures you present paint a distorted picture in which open economies (e.g. Hong Kong) look far worse than closed ones (like China). Open economies have a high level of both overseas debit and credit, but you are only showing one side of the picture. Taken together these tend towards balancing each other out.
The bottom line is that Greek public debt is over 100% of GDP and increasing at 12% per year with no credible plan to get off this road to ruin.
http://en.wikipedia.org/wiki/List_of_countries_by_public_debt
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"99. At 12:14pm on 18 Feb 2010, Cracklite wrote:
Freeman "The record for the EU on being open and welcoming whistleblowers is not good."
By not good, do you mean worse than the US and their so called unpredictable financial crisis that we still suffer from all-around the world?! Just asking."
Interesting that you compare the EU with those greedy incompetents. In answer...worse. At least the bankers did nothing illegal, just incredibly stupid. Better than covering up fraud and incompetence by shooting the messenger though....just.
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The current crisis will put the test to whether there is any real union in the European Union. In a real union, people in one part of the union will make great sacrifices to themselves to help people in another part of the union when they are in trouble. That is what the term union means. During all those staged rallies and in interviews a lot of people in Europe talked about how "European" they felt. Now we will find out if they still feel so European after all.
Even if it just comes down to a contest between fear and greed which are often said to be the only two operative emotions in a market, we will see which wins out, fear of the unknown consequence to their own Eruos if Greece and the other PIIGS are allowed to default or the greed of not wanting to give away their money or lend it away with the likely prospect it won't be paid back, at least for a very long time at a time when they feel they need it most.
Europe, the whole wide world is watching you. We'll see what kind of stuff you are really made of under the camoflauge.
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greece2000 @#102
In stark numbers the national table of debt you provided would scare the pants off the uneducated observer but there is a problem with like-for-like comparisons as demonstrable by this table.
There is a huge difference between government borrowing and private debt and the two should be viewed as separate forms of debt.
In regard to private debt there is a big difference between short-term borrowing such as bank overdrafts and credit card debt when compared against mortgage debt which is longer-term debt and definitively guaranteed by being tied to collateral in the form of the mortgaged property which is an asset partially and, more often than not, wholly convertable to repay the debt if needed as the value of property does increase over the longer term.
It is also worth noting that certain nations have a penchant for home ownership versus residential rental and the difference in national characteristics can have a profound impact on the size of private debt of individual nations and be misleading as the howm ownership characteristic is never factored into the comparison that is drawn between national debt of different nations.
I fully accept that individual people live well beyond their means and do take on debt that they cannot repay let alone service the interest payments but the majority of people who borrow within the private sector do so honourably and repay their debt on time and in due course. I would therefore contend that private debt is a proportion of national debt that has to be viewed separately from and with less jaundiced eye than that of government borrowing.
Government Borrowing is guaranteed by individual Governments who can simply borrow more, sell off national assets (which incidently is something that the UK's Gordon Brown has a real penchant for!) or can simply print more money, devalue the currency or engineer reduced public expenditure or raise more domestic taxation revenue so as to release funds for debt repayment - as the government so wishes.
As regards Greece it is the suspicion that Greece may not be able to service its forthcoming Debt Interest payment - because it has fraudulently concealed the gap between Revenue and Expenditure for years - that is the factor that is being seen as the weakness of the Greek Economy. The fact that Greece is tied to the Euro means that devaluation or quantitive easing cannot be available to Greece and this limits Greece's options leaving reduced public expenditure and increased taxation, i.e. the Austerity Package being imposed on the population, as the only viable means available to Greece to meet its financial debt obligations.
Whether Greeks or Americans own more property through mortgage debt is really neither here nor there and the volume of private debt should be discounted unless your assertion is that all private debt is never going to be repaid or serviced because people are inherently a bad debt risk and should never be allowed to borrow or banks should not lend to the private sector .... in which case we open a whole new topic for discussion.
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Freeborn John wrote:
"DT (61): Nice post, only slightly marred at the end by an unwarranted reference to the Westminster system."
Given that the entire post was a calculated attack on the way the westminster system fails, I think you need to make up your mind on the issues.
You claim to be "freeborn", so where were you born?
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Hibou wrote:
"democracythreat @ 85
MarcusAureliusII @ 86
Yes, if blogs are taken over by a few extremists, no-one but extremists will participate. BBC, please limit postings to one per day per contributor (same email address).
And why is Gavin so preoccupied with the Euro? If the UK, with its huge deficit, was using Euros we might have something to worry about. "
Extremists?
Hibou, being a petulant sycophant towards established authority does not entitle you to judge others as extremists. It just means you like standing next to money. And indeed, that is perhaps the single most significant factor in why and how we have come to the point of political rule by the banks. So many people like to stand next to money, they will betray their fellows in order to move just a little closer to the man with the checkbook.
Is that not how our political system has been corrupted? By the checkbook, and the need for advertising sponsorship? And isn't that how the unions were corrupted? Their officials bought off with party favors and cushy "administrative jobs" until they represented nobody but themselves and discredited the entire labour movement?
In any case, I suspect you would prefer to make rules for participation in a blog you don't own than debate the issues.
For your enlightenment however, Hewitt discusses the Euro because he write the European blog and is a journalist paid to write about Europe.
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Oh what a tangled web we weave
When first we practice to deceive.
Hypocricy, thy name is Europe.
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Marcus
Did you see the news where our president created a task force to look at how to reduce the deficit. What ever happened to the old admonition "when you find yourself in a hole the first thing to do is quit digging". Don't we need a tsar or something?
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Jean Quatremers (Libération) has been pursuing the "speculators" story since December. His latest news is that these speculators are real - and that they have access to insider information.
Goldman Sachs has been heavily involved in placing Greek debt, through the use of various "off balance sheet" methods (not unknown in other EU countries, UK included). However, at the same time, they have, apparently, been speculating against the Euro and Greece in particular. Also, according to the FT, they have been providing advice to John Paulson, head of several hedge funds; to the extent of showing them around Athens. Guess whose hedge funds are named as Euro/Greece speculators.
What seems to stink here is not the fact that banks and hedge funds should gamble on the Euro but the possible conflict of interest raised by Goldman Sachs' involvement. Maybe MAII's epithet (#111) should be better applied to some banks?
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Democracythreat (109) said "I think you need to make up your mind on the issues... You claim to be "freeborn", so where were you born?"
I was born in the UK, a few years before EEC membership.
While you make some useful remarks about shortcomings in the Westminster system, i do not recognise your description of that system. Please believe me when i say that should the UK show any inclination towards becoming a banker-controlled fascist state, you can count on me to be raising the alarm from the rooftops. But in the meantime i prefer to address more real and present dangers, notably the loss of law-making powers to Brussels institutions against the wishes of the British people who are the rightful owners of the power to decide the system under which the law they live under is decided.
It seems to me the cause which you champion - direct democracy – can be a useful adjunct to representative democracy. I think the 2005 Labour and Liberal Democrat manifesto commitments to hold a referendum on the EU Constitution show there is a danger of politicians lying to get elected, and then doing the opposite when in office, and direct democracy could play a useful role in preventing that, and indeed an indispensable one when the unpopular changes they lie about are of a constitutional nature (like Lisbon) that cannot be reversed by simply electing a new government. Never-the-less, a body of full-time elected representatives is indispensable if anyone is ever to come up a coherent body of legislation. Direct democracy should therefore be used to shoot-down whatever measures this body of representatives come up with that do not enjoy the support of the national majority.
I do not defend the Westminster system because i am British, but on those merits which it has. I think it is quite easy for those who live outside the UK to caricature the Westminster system, with its opaque constitutional arrangements, and arcane features such as the House of Lords or Monarchy. But remember that most people reading this page live in the UK and can easily distinguish between the real political powers exercised by the majority in the House of Commons and the decorative but largely powerless Lords and Monarchy. The one case of real political power exercised by unelected people who still dress up in funny costumes is the judiciary but the accumulated body of centuries of their work – the common law – stands on its own merits and is retained not just in this country but numerous others who could have jettisoned the common law after their independence but retained it on its merits too.
Where the Westminster system has flaws i point them out without resorting to implausible scenarios about fascist bankers ruling the country which the Labour MPs who form the majority in the House of Commons would never tolerate anyway. The Westminster system has lost much of the separation of powers that Montesqueie and Madison admired with power now unhealthily concentrated in the hands of the one person (prime minister) who leads the majority party in the House of Commons. This person is now able to use powers of patronage and party discipline to push through almost anything; even changes of a constitutional nature like the Lisbon treaty which his successors cannot easily reverse. I prefer to target my criticisms at these flaws, and the unhealthy consequences they lead to, in particular the one-way expansion of EU law which permanently preempts Westminster law and therefore increasingly diminishes our very ability to elect a new government capable of changing the law we live under.
The system i want to see has three parts (i) a realm (the common law) where the individual is sovereign over his own actions so long as he neither harms nor seriously offends the interests of other citizens (ii) a remaining large area where politically contested decisions are decided by the nation as represented by the majority in parliament so long as this majority respects the rights of other nations and (iii) a remaining arena, as small as possible, where decisions can be decided by near unanimity at the international (global) level. There is no place for the EU in this system due to its limited geographic extent and the inappropriateness of law superior to national law being decided by QMV and therefore imposed on dissenting nations.
Elements of direct democracy may be useful, but by far the most urgent problem of the age is the lack of any functioning limits to the one-way expansion of international law and its encroachment into the rightful area (ii) where the national majority should decide. Once EU law exists no national law can conflict with it, even when backed by a Swiss-style national referendum, so direct democracy on its own is no solution. We need to correct the asymmetry whereby one person (the head of government of the moment) can use treaty-signing powers to unilaterally and permanently transfer law-making powers to the international level which his successors and future generations of voters cannot get back anywhere near so easily. Unless that problem is fixed we are on a one-way trip to an undemocratic super-state whose law cannot be touched by any national election or referendum. That is the real democracy threat to which all talk of bankers is pure distraction.
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Re113: ... I accept all that, and indeed Greecen given the course it had taken since the 70s would attract only speculators, not investors. However what escapes really my imagination is how Europeans pretend not to have known. I do not mean that Eurostat could had checked in 1 msec all the financial data, no these things take time and at the end of the day it is more or less a matter of trust of the kind "Ok, you might lie here or there a bit to facilitate your tasks, just don't overdo it and we end up in trouble!". I mean that it is quite strange that no Greek guy involved in this muddy business had talked... Greece is known to be one of the most easily controlled states where it is known that even the mobile phone of the prime minister is bugged... no kidding, it has happened. And did all Greeks working in Eurostat have no idea? Or where they "too patriotic" so they spoke not of their suspicions? And even with no information, how many finance specialists could believe Greek financial data when it is obvious even to the least knowledgeable in finance (like myself!), that a country with such a small production and such a negative import/export balance and such a low ration of tax received/imposed and even lower ratio of tax imposed/should be imposed it cannot maintain that amount of public spending without intensive loans.
Still the question is "why now". Why not earlier? The economy was in equally bad state. These loans were not taken today, not even yesterday but throughout the 80s, 90s and 00s. The answer is simple. This issue was provoked by Greece itself, not by Greeks though but by Mr. Papandreou (the "little american" as Greeks call him, hardly can pass for a Greek anyway, I repeat - even his party members agree that this man is dangerous and can sell-off half Greece to anyone if his country, US, says so...). Not that he is responsible for these loans or the situation in the country, but his family, namely his father is perhaps the politician the most responsible of all having created whole politico-financial mafias to keep his party always around and in power. But Mr. Papandreou is the one that came out with all that, just 1 week after the elections.
1 week? After being elected? Ouaou! EU specialists could not find out in 10 years, himself found out exactly the Greek deficit in 1 week! Quite effective that Greek government and what an example for the rest of Europeans!
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'He who laughs last laughs longest'
From today's business page:
The government expects public sector borrowing to peak at GBP 178bn this year - equivalent to 12.6% of GDP. . (italics mine)
Welcome Great Britain to the PIGS club!
When the present Greek government came into office the found the supposed figure of 4% was in reality 12%. What will the next GB government find when they start looking in the Whitehall cupboards and under the carpets? We already know that some 50bn of capital expenditure has been morphed in revenue expenditure over the next 30 years. Link provided by Europrisoner.
What more is there to come I wonder!
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Gavin,
Great to see you were able to use that Paul Krugman quote. Separately, may I make a small but actually quite important comment on terminology? I know the BBC takes such matters very seriously in all areas of news output.
Must you refer to critics of the EU and its projects like the euro as "anti-European"? It's important to remember the distinction that the EU is a political system, of which some European countries are members, and Europe is a far broader concept - an entire continent.
There have been long-standing efforts by the EU lobby to conflate their unfortunate political project with the cultural appeal of 'Europe', in a bid to cast all opponents of the power centralisation project as motivated merely by base xenophobia. Note how that arch proponent of the strategy, Denis MacShane, who you quote, uses the term pro/anti-European unfailingly.
But by using it shortly afterwards yourself, you are repeating the terms coined by one side of the EU debate to denigrate the other. Not exactly in line with the neutral and impartial ambitions of the BBC!
May I suggest that there are many more accurate alternatives available, such as EU/euro-critics, anti-EU campaigners, eurosceptics. You might even like to try 'eurorealists' or 'democracy campaigners' ;)
all the best,
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To Marcus
I gather that your friends in France have made a lot a profit out of selling wine to the United States which was not quite what it was supposed to be. Bad boys again?
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To Freeborn John
I, of course, agree with you that far to much power is now in the hands of the Prime Minister and unelected and unaccountable 'advisor's'
The question is ¿What, if anything can be done about it?
(Sorry to use the Spanish format - can't remember the English format)
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As it has been mentioned here, BBC is very close to “the markets”, more precisely the finance industry in the UK.
Die Zeit, The German weekly, is not far from the German government, and its editorial this week suggest two different solutions to the present situation: One is to reduce the countries in the Euro zone that is to expel countries, which differ from the leading countries like Germany. It will be an unpleasant process and would weaken the Euro.
Another is to increase the political commitment within the Euro zone that is harmonize (centralize) further areas of hitherto national politics like spending, taxation and the labour market. This will also be a difficult process, which as a side effect would increase the distance between the centre and the periphery of the union.
It took seven years to get the Lisbon treaty through. Die Zeit thinks EU will have less than seven months to make a decision on this new problem.
Let us see.
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#120,
Mathiasen, yes please!! The first sensible solution to this fiasco! The current approach is laughable, there are 16 different views and opinions plus the ECOFIN, plus the commission, plus the Eurozone chairman no one wants to take responsibility and they all hope it will go away by itself. This crisis was due to happen, it is obvious the Euro response is completely uncoordinated unlike the speculators that appear to talk to each other quite a lot!
Either kick out Greece, Spain, Italy, Ireland, Portugal, Belgium! (maybe France also) or make it a proper union where they look after each other. The Eurozone at the moment is not a union, it does not speak with one voice and no one is charge.
The Euro is a good idea and it will work but it needs far more integration, I think reducing the size to a smaller group without changing the rules it will fail again in the future. Speculators will pick again a target and force that country's interest rates to differ from Germany's unless the rule is such that no country is allowed to have any deficit :)) then only Norway will qualify and they are not in the EU :)
Closer union and fast is the answer, union with no commitment is like banking with no risks!!
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Maud;
"Marcus
Did you see the news where our president created a task force to look at how to reduce the deficit."
You don't need a task force to know how to eliminate deficits. All you have to do is spend less than you take in. The question of course is whose ox will get gored. Whichever ones they are, they will be angry about it. That's what politics is about, cutting out someone's favorite organ while giving them enough anesthesia so that they don't feel the pain.
MDLS;
"I gather that your friends in France have made a lot a profit out of selling wine to the United States which was not quite what it was supposed to be. Bad boys again?"
And I understand that the court in France was very harsh with the perpetrators slapping them hard on the wrist. Some of them will be on probation for as long as six months. Whoever buys anything from France had better beware. Of course we remember the Cruse wine scandal of the late 1970s, early 1980s don't we? Oh some of you weren't born yet? In fact some of you were born....yesterday I ccnclude from reading your postings :-)
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To ChrisArta and Mathiasen
A lot of people have had enough of your lousy dictatorship already.
Don't push people too far!
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#105 Free born,
The link you provided had some very interesting data! That at least leads one to conclude that private debt can make impact a country. Iceland had mostly private debt but the country is dead, so is Latvia, Lithuania, Estonia by the looks of things. None of the last three countries have high public debt, so why are they suffering? The obvious answer is because their citizens can't pay that debt, so, private or public if the markets turn against you and they ask for their money or they will not lend you more the country goes bust!!
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Mike Dixon (119): We need countervailing powers to the Commons, which should include (a) an elected 2nd chamber (I.e. Senate) to replace the House of Lords) and (b) some elements of direct democracy.
The Lords should be reformed as an elected regional Senate. This would give the 2nd chamber a character distinct from the Commons. It should be elected by proportional representation within each region of the UK such that elections to the Commons could continue to be a choice between two competing programs of government with the weaker 2nd chamber representing a wider range of opinion.
With such a democratic mandate the power for this Senate to block bills from the Commons could be restored (the Lords has only been able to delay, currently for a maximum of 1 year, since Lloyd George). The danger would be of this reformed 2nd chamber becoming more powerful than the Commons. One solution might be that a supermajority (perhaps 2/3) be required to block measures on 3rd reading which were included in the manifesto of the party winning the election for the Commons. The Lords/Senate should also have the power to block international treaties negotiated by the government as these are proving to be the Achilles Heel in our system today through which political power escapes the democratic arena to international organisations.
The Lords/Senate should not be elected at the same time as the Commons. One possibility would the follow the practice in the US Senate of electing 1/3 of its members every 2 years so that we can periodically fine tune the power of this 2nd chamber to resist the government. Party discipline and the Whips will inevitably mean that the leaders of the parties in the Commons would exert influence in the 2nd chamber, but everything possible should be done to minimise this including PR to encourage more parties, a rule that members of the Senate cannot be ‘promoted’ to ministers and perhaps more pay for Senators than MPs to encourage them to stay in the weaker chamber.
The size of the Commons could be cut to about 400 MPs with maybe 200 Senators.
On its own this would not enough. Other countries have bicameral legislatures that have rubber stamped Lisbon with only Ireland’s constitutional safeguards proving anywhere near effective. A reformed British system should be documented in a written constitution that can only be amended by national referendum. This constituion should also include a citizens right to initiate by petition referendums to strike down individual new laws from either Westminster or the EU (the latter in the UK only of course) and any international treaty that would transfer law making authority outside Westminster.
Such changes would retain the traditional advantages of representative democracy, while giving voters the possibility of a final say to reject the worst ideas of politicians, and introduce real countervailing powers to balance that of the Prime Minister, Brussels and the political class in general.
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Re the french wine. The french rightly stated that American consumers didn't complain (i.e. not sophisticated enough to know they'd been had). No harm no foul, in my opinion. From the BBC article that I read it was French customs officers that raised the red flag. They should be fired. :)
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To ChrisArta (81):
With all due respect, some bytes of information on the web, to which I refereed were statistics from the IMF, they are a much more reliable measure on what the economic situation is that any eye account. The fact of the matter is that Latvian economy produces per capita more than economies of Russia, Belarus or Ukraine.
In case of your points...
A) No. Without belonging to the EU or the EEA, a country will have tariffs when exporting to the single market. Because countries like Latvia haven't specialized or high-tech exports, but more or less commoditized export products, a tariff will put their export products in highly disadvantaged situation. For an example, do look for Serbia and Ukraine who both are very concerned on their neighbors either being in the EU or becoming EU members, thus putting them in disadvantage due to tariffs.
Import tariffs on the other hand would only cause Latvian economy becoming less efficient as it would put an obstacle for Latvian companies to use the best tools available not to mention that for most high tech development and manufacturing you need a market of at least few hundred million consumers or in case of some cases global markets. Import tariffs only work when you are USA, EU or China and you can you size as an leverage to negotiate much more satisfactory trade deals.
B) They don't have unemployment because of banks, but because of over spending on credit by both the people, by the corporations and by the state. Banks could and should have had much stricter credit controls, but then again blame also relies on those who loaned money and didn't end up having good investments.
In case of the banks and the Euro, the choice is this:
1) Make devaluation and you end up having banks gone bust, you end up having funding cut from corporations that either go bust or downsize, you end up people having lost their savings, if you try to save savings you will end up increasing inflation, maybe even getting it out of hand. The worst thing is that because of lost of professional organizations, banks and financial institutions and corporations, when depression ends, you don't have knowledge and organizations to make growth happen.
2) You cut spending so much that the situation balances. Ordinary people can and will have very hard time, but after the situation has balanced out, you still have banks, financial institutions and corporations there who will again start to produce and grow.
Furthermore the Scandinavian banks are still there, the only bank that was nationalized was the Parex bank, a domestic home grown bank. Without foreign banks that do hold out, what Latvia would have ended up is the same situation that Russia had in 1998, in short wave of banks going bankrupt and disappearing with peoples moneys. Just ask Alice would she had preferred having few Scandinavian banks or domestic banks.
C) Every country makes its own decisions regarding social spending, Latvia could have maintained pensions and other social benefits, but it would have had to raise taxes in order to do that. That is matter of internal valuation on what is important.
In regards of an Latvian unemployed person, the fact of the matter still is that Latvia out produces its non-EU neighbors and when the world economy recovers, growth will be faster in Latvia than in its non-EU members. Besides 20% unemployment isn't unworkable situation, sure for few next years it will feel horrible, but after that it will start to ease up and when growth recovers it recovers much stronger.
I should also note that it is only 20 years when Finland was in a same kind of situation, there was speak by writers and journalist and all non economists that the country was doomed for poverty for ever, but little they knew. The creative destruction freed people from old sectors of industries, government put more resources to education and new industries, joined the EEA and then the EU, and boom, the economic growth was back there and stronger than ever.
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To ChrisArta (121):
If you want a proper union where member countries help each others more than they do know, to make it economically work you will need to have to give the union authority to use sticks and carrots. If my tax euros are going to help people who haven't kept their own house in order, what I want is that if the union helps them, they will also use the stick, for example in Greek situation how about some measures...
Cut 10% of the public sector employment followed by hiring freeze.
Cut 20% of the public sector wages and put freeze on wage rises.
Cut 30% of the unemployments benefits to make people more motivated to seek jobs.
Cut 40% of the military spending.
Cut 50% of the size of the black economy by increasing tax officials authority, by legislating that all business transactions have to be done via banks
If we can have this relatively small corrective measures in place, I don't mind giving some carrot too.
A union is not a free ride, a union relies on solidarity and solidarity entails also that all work as hard as possible and waste as less as possible.
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Let's focus again on Goldman Sachs, and the report on Bloomberg news yesterday that they allegedly helped market Greek bonds without informing the investors adequately about their initial deal with the Greek finance ministry back in 2001 which allowed the latter one to cook the books in order to enter the Euro. It smacks of lack of transparency to investors, maybe even withholding insider information, etc. i.e. not the kind of behaviour one would like to see from a respectable outfit. Several newspapers report that Frau Merkel and Madame Lagarde want this investigated further.
So maybe there is no conspiracy and the 'markets', including Goldman Sachs & Co. "do only their job", which presumably is to wreck the Euro project if they can (since then a lot of profits can be made for their shareholders), or there is a 'conspiracy', i.e. somebody thought they could take 'Europeans' for a ride by attacking the weakest link in the Euro, Greece, who has to raise the measly sum of ~50B euro (one tenth of the USA bailout in 2008) in the coming couple of months to stave off defaulting on its debt.
Rather than blogging about the perceived faults in the Euro project, maybe Gavin can give us, based on his USA experience, a good feel for how the behaviour of Goldman Sachs in this case is perceived by the rest of the financial world in the USA, including those whose like to see 'fair and transparent trading' arrangements?
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StuartC @ #117
I wholeheartedly agree with your advice to Gavin.
It is far too easy to label and stereotype people. That is exampled by labelling people, like myself, who are critical of the EU as being anti-EUropean whereas, in fact, I am actually very pro-European.
I like the diverse national characteristics of the various nations that comprise Europe and firmly believe that a united Europe is an eventual possiblity. I just hate the EU because of the way that it has evolved from Common Market tariff-free zone to have become a political union without any real and meaningful democratic mandate to do so!
That makes me anti-EU but not anti-European, it makes me Eurosceptic without being anti-European and it makes me angry that even Gavin and other EUrophiles thinks that I am anti-European without accepting that I have as much right to criticise the EU as those who love "ever closer union" and are willing to see that union continue to develop and give up their freedoms year-on-year to the union so meekly and without realising the eventual consequences!
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To Mathiasen 120
Die Zeit are, of course, quite right. The implications are obvious and clearly spelt out on the joint statement by José Zapatero and Herman Van Rompuy. The italics are mine:
Nothing could be much plainer that that.
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Nice theory Jukka but no relationship whatsoever to reality. All Eastern European countries had free trade with the EU/EEA/Efta prior to EU membership, including the Balkans today, Turkey, isreal and all except North African countries along the Medieterrean coast.
Central European Fta
http://europa.eu/rapid/pressReleasesAction.do?reference=IP/06/1837
Turkish Customs Union
http://ec.europa.eu/trade/creating-opportunities/bilateral-relations/countries/turkey/
FTA with all countries bordering Mediterean except Libya and Syria
http://ec.europa.eu/trade/creating-opportunities/bilateral-relations/regions/euromed/
You don't need to be an EU member to have tarrif-free access to the European Market. And countries outside the Eu like Turkey are growing faster than Eastern Europe. Many countries further afield from Mexico to South Korea to Canada also have tariff free access to the common Market or are negotiating it now. And the tariff to the rest of the world is less than 2% for industrial goods and 0% for services. Welcome to the global economy Jukka.
P.S. What are Finns planning to do after the 'creative destruction' of Apple puts Nokia out of business? Will that 1.9% tariff save you?
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Jukka, I have no experience with Scandinavian banks. But we are in a rank of its own, and unfortunately are likely to stay, in that foreign banks in Russia are not allowed to service private individuals.
Accordingly all "foreign" banks in Russia working with individuals (because there are a plenty) are only by name foreign but by fact 100% registered anew in Russia as if created fresh, and 100% subject to Russian fin. laws and banking laws, taxed here, supervised here, treated exactly as Russian local own, they are not branches but Russian banks in all but name (usually kept to attract Russians who never lose hope that "a foreign bank is better" :o)
As they are subject to all Russian rules, accordingly they also behave exactly as Russian banks! I told you before everyone here becomes Russian in no time at all :o))) For example they don't spoil Russians with any exessive services :o))) or offers, don't pursue you with any credit card suggestions or credit loans suggestions, and when you go there pleading for a loan they longly think and then charge you 36% interest a year be it a loan in euros in dollars or in roubles.
Russian banks also operate individual accounts in euros, dollars and roubles, a choice of the individual, what currency to have his credit card attached to or an ordinary spending card, and in what currency take the loans or keep a savings' account.
You will look hard to find ANY difference between a Russian bank and a foreign bank in Russia - no difference in services, in friendliness, in currencies, in interest - nothing at all. They are all Russian.
So, if a Scandinavian bank will come, you won't know any difference guaranteed.
Another thing of course a branch of a real foreign one - but as I said these are not allowed in alas. Those ones won't ask for 36% interest per year on a loan as I strongly suspect :o)))) Surely I'd love that, but fin. lobby won't let such competition in and will fight tooth and nail against.
In this world crisis what Russia had not is inability of Russians to return loans. Russian return back loans, because, in the first place, it is so hard to take a loan in a bank here, there very few get filtered in. Secondly, 90% simply get scared by this robbery 36% and don't ask for a loan, in the first place. So there is no "non-return" of loans given by the banks in Russia, "foreign" or local banks alike don't suffer from it.
I've got an account in a Russian local and Jesus Christ in terms of debts' collection they are tough :o)))) First of all, the amount of money on the "credit card" in Russia is limited by most banks to "1.5 monthly salary". That's all. You won't get a bigger credit here, without tying in your dacha or apartment as a security, or unless you find 2 people with dacha-s and apartments who will sign with the bank a paper that if you fail to return your credit - these 2 will pay instead of you.
Russians do find such friends guaranteeing for them, when they take loans to build a house or something else expensive, like to buy a car, but as you understand it is not easy.
On this pathetic "1.5 monthly salary" credit card limit (and I wasn't able to have it raised in the same bank for the past 2 years) (though I awfully much want to buy a note-book but 1.5 monthly salary size credit doesn't allow) - I have to return every month to the bank the interest and a 10% of the loan. On the 20th every month. Now, on the 18th you can already as well as plug off telephone and switch off mobile, because there starts a terror, they phone by automatic voice every 2 hours (2 days before the day due to return some lousy 100 dollars) and strongly recommend me to return immediately and not to miss the date. Last month I missed the 20th - they phones on the 21st, 22nd and 23rd EVERY HOUR and despaired about their interest and 10% :o))))
At that they had the only 2 cash taking cash-machines in the city broken, and no offices working on Sat-Sun, and how was I to return was unclear 9as min to me). But with debt collection such a bank who doesn't spare 40 phone calls in 3 days to get back their 100 dollars - will nevr suffer from "bad debt collection" :o))) rest assured. Bull-doggie snatch.
Monsters, in other words. Phone calls from 10 am to 10pm! Terror alive.
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I try not to use the credit card because it is mind-boggling how they calculate interest, and then interest on interest if you miss one day, plus the payment for the credit card very existence (for the issue of it to you), 20 dollars a year (and that's a lousy card which I can't even use for internet purchases, only in supermarkets), I tend to go to old money lenders instead, carrying them grandma's golden tooth, a golden ring, some assorted golden ear-rings left overs when you lose one, or things like that. Various small golden chunks that you leave with them and they give you cash. It is far easier to get a hundred dollars this way than to deal with dangerous banks. They also charge hilarious interest, 4 per cent a day on the loan, but at least all is straightforward, amount clearly stated, date when you pay them back or lose your golden ring forever specified, all plain and simple and they work till 8 pm every day of the week and some are even 24 hour, and heaps of them on all corners in St. Petersburg.
That's where normal Russians (un-rich ones) address for small loans, not to the bank.
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Suppose I need to bring a pet to a vet or have a tooth of mine fixed at a dentist, in other words I urgently need 2-3 hundred dollars ASAP. What is my chance of getting it in a bank? Zero. They will demand tax papers from work, proving my salary, and will think for 2 months about the 100 dollars credit checking all work telephones and talking with the office admin, and the hell, how to say, greedy monsters, where you are a customer for 3 to 10 years and always returned the loans and can not even get a small cash loan when needed ASAP.
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Jukka I understand the new Baltic States make more GDP than Russia, but may be somehow they don't notice the happiness because it's more expensive to live there. Than in Russia I mean. It is not enough to make money, it also depends on how much livings costs you, I mean, how much of it you will need to spend to simply live, minimally.
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The only handy habit banks operating in Russia have got is ability to work in 3 currencies on everyday level. Thatt 100 dollars that I need to return to the bank on the 20th, I can feed into its cash dispenser machine, "the big powerful hole in the wall" :o))) in either dollar banknotes or rouble banknotes or euro banknotes. Cash dispensers in Russia eat all and give cash also in all, well, not all banks' cash machines, but all the biggest ones anyway.
We feel really "people of the world" :o)))) fumbling with our 100 dollar equivalent "bank loans".
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What an irony of history. 70 years ago Germany wanted to control the fate all of Europe by imposing itself on everyone else by force. Today it is at risk of being in control of the fate of all of Europe by having it imposed on them. The old saying is be careful what you wish for, you never know when your wish may come true.
Anyone who puts their money in Euros or French wine should be wary of the risk they are taking. Tomorrow your purchase may turn out to be worth a lot less than you think it is today.
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@ Reactions to the editorial in Die Zeit
The analysis of the newspaper put a perspective on the measures taken in the Euro-16 so far (and we should perhaps stress to certain contributors that the UK is not a member of Euro-16 and is very unlikely to join in the nearest future). Instead of the tough measures suggested by Die Zeit, the Euro-16 are going back to the demands of convergence (stability within the Euro zone). It could be described as the political less painful way for the Euro-16, except for Greece of course. Die Zeit is of course aware of this political aspect.
The measures might not work, and then new measures can be expected. It is time consuming but from a political point of view it might be the necessary process, which can provide political support for further measures. In that latter case we might see a new economic-political structure within the EU, since it might bring some EU countries outside the Euro zone closer to the currency (Denmark) and increase the distance to the union for other countries (GB) for instance. However it is speculation at this moment, and we have indeed already too much speculation in this blog.
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Nik,
Denial plus more denial is where you are headed. It is one thing to need assistance. It is quite another to threaten nations OR maintain 6ne's complete judgemental insanity as a way to get assistance.
Your load is heavy alright. Let me elucidate.
I know a woman whose boyfriend told me that all his brothers had died of alcoholism. Bur, HE told me that he totally avoids alcohol so he will live.
It sounds good till one finds out he is a weekend prescription drug binger. He gets all the Pain Pills he can get his hands on and takes 10 or more at one time (these from his "friends" or drug dealers)
Then he binges..as an alcoholic would ..with the same effect.
This is killing his body's organs--ie, his health is always in emergency room mode--but he nevers lets his doctors know ..OR himself it seems--about his addictions.
Hmmm, now you're going on and on about conspiracies and wild theories of persecution..denial upon denial (of financial horrible habits to start out with).
Well, uhhh ohhhh.
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#127, 128,
"Besides 20% unemployment isn't unworkable situation, sure for few next years it will feel horrible, but after that it will start to ease up and when growth recovers it recovers much stronger."
Jukka, that's what priests used to say: "this life maybe horrible, but be patient, be happy with your lot in life and in the next life paradise waits for you". No, Jukka theory is just that theory. Belarus and all this other countries you mentioned may have less output per capita but they don't have more than half of their population unemployed.
Regarding the closer union numbers you mentioned I'm all for it, not just for Greece but also here in the UK we need to reduce our public debt also, but not in the way Latvia is trying to. We need to spend less on our military but we can only do that if we know other's will help us. We need to reduce the size of our financial services and real estate and increadse our farming output. But the way the union works today is not easy because if we all go for saving at the same time you will see a huge drop in demand for Finish, German products, so Finland, Germany, Sweden need to start consuming more of their products.
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Ah!
The old 'Salem Witches' ploy!
The hysteria is becoming more open with everyday that passes! More and more are claiming they see the apparitions & smell the foul stench.
Lock 'em up!
Those in charge can spot the signs! Apparitions... 'Hedge-fund' managers and those devilish 'Anglo-Saxon media & Markets executives'... THEIR signs are everywhere: Those in charge can read the runes..
The World Markets have it in for the greeks, EUro, EUrozone, EU...
Much more prosaic reasons are at work: The Greeks cooked their EUROzone accounts aided & abetted by Paris-Berlin-Brussels and they've been caught out.
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Mathiason (139) said “Instead of the tough measures suggested by Die Zeit, the Euro-16 are going back to the demands of convergence ([i.e. Maastricht] stability [criteria] within the Euro zone)...”
In the decade after German unification the former East German Länder were running a deficit equivalent to 50% of GDP. This was almost entirely financed by taxpayers from the Länder that formerly made up West Germany. How do explain that West Germans were prepared to finance such as massive bailout for East Germans, but not the much smaller (12%) Greek deficit today, even with the assistance of taxpayers from other eurozone countries?
It would appear from your posts that you either accept my explanation (that West and East Germans are part of the same national ‘demos’ which Greeks are not part of) or simply have no explanation.So i ask you this: If the solidarity required to legitimate redistributive government spending – so closely associated with the modern conception of government itself - only exists within nations, then what do you conclude about the prospects for the European federal government that you have until now demanded?
What is German for ‘pie in the sky’?
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Menedemus @ 130:
Thanks for your supportive comments. As you say, I think it's very arguable that those who support democracy and diversity as well as international co-operation on our continent (ie. those campaigning against continued EU political centralisation and brand of bland conformity) are the *true* pro-Europeans in the EU debate.
Seems to me that many eurosceptics have much more of 'Europe' at heart than the often blinkered or backward-looking followers of some 1950s superstate concept. Maybe, as you say, a European demos will one day emerge and common government in Europe will become possible and genuinely democratic. But that time, if it ever comes, is a very long way away. Today's EU is government that has left the people behind.
That's why alternative terms to 'pro/anti-European' are needed. Because they are commonly used doesn't necessarily make them right. And even beyond the question of which side of the debate is served or harmed by the terms, it is perhaps most importantly (especially in such a controversial and sensitive debate) about being as accurate as possible.
In general I fear we humans leap to label things too quickly, in most cases simply to cope with the sheer quantity of data coming at us every day rather than through malice. But I do think journalists have to be especially careful about this, and not fall into a trap of defining people as something they're not.
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Haha, All the posts complaining about the use of Anti-European to describe people against the EU are a bit like the pot calling the kettle black are they not?
Maybe stop with the 'Europhile' and 'EU Apparatchik' and we can all get along? And everyone should stop it with the 'Xenophobe' and 'Little Englander' tags.
Things to remember:
Being supportive of the EU doesnt mean:
You support everything it does
You don't think it needs reform
Your an elitist know-it-all
Being against the EU doesnt mean:
You hate Europe
Your an idiot
Your a xenophobic 'little Englander'
p.s. EUSSR is a very silly name that does nothing to advance the "EU-sceptic" cause.
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Yay another useless topic. The euro may be able to buy less many dollars than it used to. Why excatly is that even bad?
Even if it is which I am not at all conviced off - it is still far far atop of where it once started. If one euro could only buy 0.5 dollar then we could start talking about it.
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#143 Freeborn John,
Much that I disagree with your idea that you need a demos to make a union. I think with your argument in post #143 you have hit the nail on the head. If what you wrote there is correct then I also would like to see what type of "union" Germany, France, etc. have in mind? To me at least when I say union I know what I mean, helping the Welsh, the Scots, the Polish or the Greek is all the same to me. But if pro-EU Germans think there is one union between east & west and another union between Germans & Spanish, Italians, Greeks, Irish, etc. then the word "union" looses its value.
I know the answer is the Greeks did something wrong, but it looks to me that if their PM didn't tell us 4 months ago they lied to Eurostat, we would not have a glue about it even today, so we are punishing the first "honest??" guy they ever had as a PM! :)
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British deficit up to 12.8% !!!
Best regards to the biggest PIG (IMF may help you)
PS Not a single article by the Anglo-Saxon "objectively" media of course
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Sarah Phlegm
"The euro may be able to buy less many dollars than it used to. Why excatly is that even bad?"
The day may not be far off when it will take a lot of them to buy even a few dollars or it won't buy any dollars at all. That would not matter if Europe were self sufficient. But it isn't. A lot of things it needs are sold on the international market only in US dollars...like oil and gas. I don't think you will hear much about oil and gas being sold based on a basket of currencies that includes the Euro again for a while. The US dollar seems to still have some legs to it.
What if the Euro became a non convertable currency, that is no one outside Euroland would accept it in exchange for goods or other currencies?
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ChrisArta (147) said "If what you wrote there is correct..."
These are the figures for transfers from West German taxpayers to individual states that were formerly part of East Germany in the decade after German unification, as a percentage of each state's GDP.
Year, Berlin, Brandenburg, Mecklenburg/W.Pom, Saxony, Saxony-
Anhalt, Thuringia (% of GDP)
1991 14.2 45.6 60.4 59.8 57.8 58.2
1992 13.2 42.0 63.9 51.0 63.2 60.1
1993 12.4 50.8 65.8 49.7 65.5 64.8
1994 10.3 52.1 61.0 54.8 64.6 61.9
1995 11.8 44.3 54.1 52.7 60.1 54.1
1996 15.1 44.6 50.1 49.6 51.6 42.7
1997 19.7 41.6 46.0 46.1 48.7 42.3
1998 13.3 39.4 42.2 41.6 46.7 38.4
1999 12.4 36.9 37.6 37.7 41.1 38.1
2000 11.0 32.1 34.6 36.2 38.6 33.0
2001 12.1 29.5 33.2 30.7 33.5 31.0
2002 13.0 27.8 32.2 29.3 31.9 29.4
Source: Destatis
The figures for Berlin are lower than the other Lander because much of Berlin was not in East Germany. However even transfers to Berlin were higher than the current Greek deficit as a percentage of GDP. Although German unification was an exceptional event, transfers greater than the Greek deficit remain typical today.
Maybe Mathiason can ask some of his Berlin cafe goers why West Germans made such huge transfers to East Germans, but will not bailout a comparatively small 12% Greek deficit (even with the help of 14 other countries in the Eurozone)? I suspect words such as 'We Germans' and 'Those Greeks' will feature prominently in the answers he gets. Maybe he can also ask them why they did not make similar transfers to the Czechs or other East Europeans emerging from communism? Or to keep the UK and others in the ERM in 1992? Hopefully he will ponder on the answers he gets before he next talks of federal Europe.
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Most of what Russia buys comes from Euro land.
35% of Russian yearly revenue is oil and gas, sold, also, in the most part, to the Euro land.
Exists that euro or not exists is all the same for Russia.
In euro, in individual "Euroland currencies" - Russia will buy its stocks from Europe in whatever currency-currencies they operate.
If things for euro come to the end, LOL, we can switch onto barter deal mode of trade with Europe - oil and gas for goods. We'll find a way, should the need be - without dollars.
And to trade with those countries who operate in dollars - for that there always stays the rest 100-35% of the Russia's yearly income.
Which we can comtinue to sell for dollars. Arrmament, space trips, steel, minerals, wood, gold or diamonds, whatever. In case we need to buy something from the United States or Brazil.
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This comment was removed because the moderators found it broke the House Rules.
Benefactor @ 145:
Reckon you'd probably have to quash 'europhobe' if you wanted 'europhile' ditched. But I agree, both similarly fall into the category of abusive terms rather than accurate or balanced ones.
And terms that involve Communist or Nazi labels are obviously absurd. Use of 'EUSSR' by some EU-critics is so wildly inaccurate that it's actually counter-productive for them to fling it about. No-one's ever going to be persuaded that the EU is the same thing as the USSR so those who trumpet such ideas merely diminish their own credibility.
The EU obviously isn't either of those past extremes. It is a new democratic threat of a different order and style. Though that should not necessarily mean we ought to gloss over the early-to-mid 20th century origins of the concept or the past affiliations of its prime drivers eg. Mitterand, Giscard d'Estaing, Spinelli.
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ChrisArta @ 147 wrote: "Much that I disagree with your idea that you need a demos to make a union..."
Indeed, you can technically make a 'union' without a demos. You can build buildings and politicians can have meetings and grandstand. We know they love that!
But, like the EU, it simply wouldn't be democratic. It would be a veneer union, of elites, not of people. The need for a demos for government to be democratic cannot be glossed over, given it actually comprises half of the word!
As we are seeing now over Greece, glass palaces in Brussels, Frankfurt etc. are all very well. But buildings cannot straddle fundamental cracks that the lack of a demos will inevitably provoke. Eventually, even if repeatedly propped up, the buildings will be destroyed by them.
I think the EU has been driven by a misguided elite way too far beyond its ideal role and benefit for Europe of fostering trade and co-operation on the problems that affect us all. And it's way past time to reign it in.
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There is something quintessentially Kafkaesque about the European Union. It is "The Castle" but on a scale orders of magnitude larger. A fascinating laboratory of human and bureaucratic behavior to observe from the outside. It must be utter frustration for at least some living inside it. Its subjects so powerless, its rulers who have complete control over their lives so anonymous and so beyond reach of individual subjects. Reading the book at a young and impressionable age, I experienced that frustration and exasperation just in that fictional work. But as they say, life immitates art. A monstrosity just by its very structure. It is hard to imagine that so many would have wanted to be devoured in its maw.
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#143. Freeborn John
I am to some extend repeating what I have written before, so I shall make it short.
The West-German government under the leadership of Helmut Kohl decided to transfer money to East Germany. It was from day one supported by a great majority in the united Federal Republic.
There are the net payers and net receivers within the EU. In the “old EU” Ireland and the two nation states on the Iberian peninsula were net receivers. Greece has received money too. Then from the beginning of the century countries in East Europa have been supported by the EU.
I don’t have to tell you that UK is also a net payer, I suppose. Germany is making a major contribution to this, and there are other countries including Cyprus.
The border-crossing solidarity is a complicated theme, and only to some extend relevant here since the transfer of money in the EU is linked together with the development of a market and a political entity in Europe. So the net payers are themselves profiting from the spending.
In order to be a member of the Euro-16 Greece has presented Bruxelles with falsified accounts, and later it has moved far away from the convergence criteria. It therefore has a deficit, also politically seen, and that is a major reason why the bill is being send back to Athens, but there are others, as I have mentioned in a former contribution.
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#156
I'm pro-EU but I support a "union" that is equal to all, I don't care if my taxes go from London to help someone in Scotland or to help someone crossborder.
I don't disagree with you one part that Greece broke the rules the part I strongly disagree is of the logic you use "because Greece broke the rules in the past, the union is off" the Euro is suffering and it looks more and more like as dis-union rather than a union.
As Free born pointed above, it looks more like there are two types of union. One for Germany another for the rest of us, I find that type of logic at least strange if not scary!
Bring up net contributors etc. does not point to a union we also pay for help in Africa, Haiti, etc. it doesn't mean we are in a union with them.
Further more if the BBC is to be believed they keep reporting the Greek government has not asked for a specific amount of money or help, they keep asking for political support and a statement from the other 15 eurogroup members to say if the markets will not lend them money then the Eurogroup will provide the loan, so in other words they are asking for union support no money, it doesn't look as if they are getting any political support so far. There was a statement from Eurogroup, a different one from ECOFIN, another one from the EU council, and about 5 different ones from Germany. I happy our own GB said nothing negative so far:))
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#157. ChrisArta ,
I see to my surprise this is supposed to be a reaction to my contribution #156.
Nowhere did I write that "because Greece broke the rules in the past, the union is off". In my contribution I repeated what I have written a couple of times, namely that the political credibility of Greece is limited, and since I was asked in #143 I related this to German tax payers.
Nonetheless: The Germans are not equivalent with the political decision makers in the EU.
German banks have been giving credits up to 535 billion Euros to the Piigs countries. Read the number again. We are having a saying here that goes: If you owe the bank 5 billions you have a problem. If you owe the bank 100 billions, the bank has a problem. Germany is involved in this, but so is for instance Denmark, even if it is not among the Euro-16: Its currency is linked to the Euro.
And so we are back to the point of departure of the editorial in Die Zeit.
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WebAlice,
Can you foresee your beloved native Russia joining the EU anytime in the future?
....Just curious...
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Mathiasen wrote:
"We are having a saying here that goes: If you owe the bank 5 billions you have a problem. If you owe the bank 100 billions, the bank has a problem. "
Sure, that is very wise. But then ask yourself then next question.
If we know that large loans create problems for banks, who is responsible for ensuring these loans can be repaid?
The creditor, or the debtor?
If you were running a bank, and you knew the wisdom that a large debt that cant be repaid is YOUR problem, what is the logical answer?
Of course the loan is the creditor's problem. The only possible way the loan is is not the creditors problem is if they have a rock solid security that the loan will be repaid by someone else, in the event that the debtor cannot pay.
And in this case, oh my what a coincidence, the banks DO have such a guarantor. The population of the rest of the EU, especially germany.
So you see Mathiesan, your traditional wisdom no longer holds truth. You are talking about the old world, where banks existed as private institutions that suffered loses if they made bad decisions and gave out loans that could not be repaid.
Welcome to the new world. In this world, banks cannot lose money. If they make bad loans, the money will be extracted from the people through government.
That is the new world, and anyone who refuses to face the fact is in hysterical denial about reality. We have seen this new world order in the USA, in the UK and now we are about to see it in Euroland.
What has changed? Well, it is pretty clear. Banks no operate outside government. Government now operates to ensure bank shareholders are protected from any loses and therefore any responsibility for the wisdom of their loans.
Banks pay to sponsor the political careers of politicians and indeed whole political parties. And they are now part of government. Indeed, they own it.
Does anyone want to make me smile by calling this system democratic?
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Mathiasen (156): It’s a shame you prefer to quickly repeat what you said before rather than pause for real reflection. Very EU ...
Ask yourself if any EU spending decision can ever be decided on its merits by an international majority? In the absence of a European demos every spending issue (other than cases of charity) comes down to how many nations are net payers and how many are net recipients. There is a permanent 21-6 majority of nations in favour of the CAP because there are 6 net payers, and all the others regard the CAP as ‘free’ money. Similarly there is permanent 26-1 majority in favour of eliminating the so-called British rebate irrespective of any logical arguments for why it should exist. And there is a 26-1 majority against bailing out Greece out for the same reason.
Qualified majority voting on international redistribution is nothing more than adding up the census figures of nations who are net payers in one column and those who are net recipients in another, and this cannot tell you anything about the issue itself. If one nation’s taxpayers can be debauched to the benefit of many other nations, there will be a permanent international majority in favour of doing just that. European federalism is based on the mistaken idea that this is how political decisions should be made in future.
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hoptoit
"Can you foresee your beloved native Russia joining the EU anytime in the future?"
Why so they can help bail the Euro out too? Even they aren't that stupid.
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Marcus, I wish you would tone down your insults of the european people just a little.
I am hearing you about the massive public reaction to the bailout in the USA, and indeed I look to the american people with hope in regard of leading the intellectual debate about the scope of real democracy in a system paid for by corporate power. I can't see it happening anywhere else just now, and it is happening in the USA, I concede that.
But let us wait and see what good it does. So far, all the noise has achieved zip. Remember the slogan "Change. Hope you can believe in!"?
Well, I don't see the republicans offering any truthful solutions either. Until i see evidence that the people of the USA are effecting real change in their system of government, I just don't accept that they have some superior system of democracy.
From where I sit, the people of the USA are making noise, but they are in the same boat as Europeans. That is powerless to stop the bankers fleecing them via the taxation system.
Until that changes in the USA, you opught not feel and articulate such superiority to the despised europeans. People in Europe do know about what is happening. A lot of them. There is simply not much they can do about it.
And until I see evidence of the people of the USA being able to do something about it, I can't understand what makes you feel so superior in your own nations' political system.
Show me some change. Show me something I can believe in. Then call us stupid for not following the lead of the US.
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Dt (160): “Government now operates to ensure bank shareholders are protected from any losses”
The shareholders of Northern Rock, RBS, etc. were all wiped out. The government rescue was only to protect depositors, and only their first £50k on deposit at any one bank. Banks are not just any business, but the lubricant that efficiently moves savings to wherever they can be used to generate the best rate of return. If the lubricant is removed (because depositors think their money is safer under the mattress) then projects that could have generated a return do not happen and the capitalist system grinds to a halt.
We have the less than perfect situation that some banks are now government owned, but the wider economy is still being lubricated with deposits held in banks. This is simply the least worst alternative available given that what happened happened. Nobody is happy about it, but the likelihood remains that, a few years hence, the UK government will sell the banking assets off at negligible loss, i.e. a large capital gain compared to the fire-sale prices the banks were acquired at minus some loan losses, and everyone will live happily ever after.
This at least was the Swedish experience after the ERM breakdown in 1992:
http://www.nytimes.com/2008/09/23/business/worldbusiness/23krona.html?_r=1&em
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I have read a lot of interesting comments here, but I am bound to have missed a few. There is one relevant article I should like to mention, it is from the wallstreetpit.com and is headed "goldman-sachs-the-great-enabler.
There is one small point I should like to make. The financial crisis has taught us that banks have become to big to fail (something that needs to be remedied). The EU has by now grown, as has the Euro, that they cannot fail for the disturbance it would cause. The way the EU has evolved, inspite of the hiccups, serves other regions of the world as example. The stability it provides to those countries that were part of another bloc, not that long ago, should not be overlooked either.
National pride or preferences don't get us anywhere. And a little word to the admirers of market forces, how would you to propose to withstand the forces that China and indeed India will bring to bear on the rest of us? Hasn't China the US already by it's -----, holding all those dollars?
Time to wake up auntie Beeb and the rest of that bent.
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165. At 7:27pm on 19 Feb 2010, jablko wrote:
" ... EU ... The stability it provides to those countries that were part of another bloc, not that long ago, should not be overlooked either. "
EUpris: It is your opinion that it does that. NATO could have done that or another European organisation that genuinely was about cooperation and peace BUT NOT about megalomania and the creation of a Greater European Reich.
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165. At 7:27pm on 19 Feb 2010, jablko wrote:
" ... Hasn't China the US already by it's -----, holding all those dollars? ..."
EUpris: Are not those Dollars declining in value. So has the USA in fact not got China by the short and curlies?
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165. At 7:27pm on 19 Feb 2010, jablko wrote:
" ... And a little word to the admirers of market forces, how would you to propose to withstand the forces that China and indeed India will bring to bear on the rest of us? ... "
EUpris: There never can be a situation in which only market forces exist and no other. All governments tax and in so doing they unlevel the playing field. I have heard it said that import duties inhibit trade. I am sure they do. Other taxes also inhibit. Sometimes they are designed to inhibit and we call them fines. I find it perfectly reasonable to fine drug dealers. However here in the UK we have taxes that punish legitimate and worthwhile activities. We "fine" people for doing worthwhile jobs. We "fine" entrepreneurs for making a profit. We "fine" employers for employing people. I reckon they might have similar taxes in other countries.
So I reckon we need to change the tax system.:
Low import duties.
More property taxes with an allowance for each person living there.
Higher fuel taxes including ultimately taxes on fuels used to heat homes.
More congestion charging and road pricing. That way those Chinese goods that are off-loaded in Felixstowe but destined for Liverpool would be taxed more heavily.
We in the UK have military forces which many of us believe are too small. I suggest that as military personnel near the end of their engagement they should be offered a longer "cooling off" period in which they spend more time working in industry but still train for war to some extent. We do not merely have to fear China's economic might but her military might. We are, I believe, supporting her military might with our flawed economic policies.
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To Eu prisoner and the European Reich
If we feel at all responsible and accept to do more for our own future must we not move together in Europe? And ask yourself, who benefits from splitting Europe?
With regard to China and the US. The interdependence does create a sort of balance for now, be the "hold" a trifle uncomfortable for both of them. You get the picture, I suppose.
"Devide and rule", was that not a tactic some little Frenchman liked to use? Since when do the British fancy copying the French?
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Austrian Radio website has a summary of food scandals of recent years. Most of them involve stuff being taken across borders. I suggest that we need better controls at borders and that the people who eat the stuff should pay for those controls via import duties.
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169. At 9:21pm on 19 Feb 2010, jablko wrote:
"To Eu prisoner and the European Reich
If we feel at all responsible and accept to do more for our own future must we not move together in Europe? And ask yourself, who benefits from splitting Europe? "
EUpris: What you write is just too vague. We do not always have to cooperate. There are other people out there to cooperate with. There are other ways of cooperation which do not involve handing power and loads of dosh to the "EU" Commission.
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To EUprisoner re your comments at 168.
The world as it is requires military commitment, the British commitment is quite exemplarary and should be matched by others.
There are imbalances in Britain as there are in other countries. It requires imagination and sometimes unusual solutions to overcome them.
The might of China has to be addressed before tensions escalate. Having a strong EU will give all of us a better chance. Their exports are indeed too cheap and not only to Britain. It is a question of how soon we will get them to have their currency revalue. But with regards to military threads, don't worry, they probably buy up a good chunk of Britain which should make you feel quite save from them in other ways.
But their power will come about in many ways. Just take an American company that we all know: Wallmart. They are expanding in China at an enormous rate, which will mean that the Chinese market might be one day their biggest. The Chinese consumer power will then be such that they, the Chinese consumers, will "direct" the company.
Therefore bickering, encouraged by the Beeb or others, is only wasting time. It is really only a form of alibism, sort of pointing the finger in all sort of directions to cover one's own blushes.
Let's not forget, the British deficit is greater than the Greek one. The British are not even proposing to cut it the way the Greeks are seemingly promising to do. So that triple A rating is really the crux.
But then we should'nt talk it down, should we?
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#169,
"If we feel at all responsible and accept to do more for our own future must we not move together in Europe? And ask yourself, who benefits from splitting Europe?"
Good idea jablko, I still support the above statement but it looks at the moment that the Eurozone at least has a smogersboard type union, where each one looks after their own state not the group. So, if looking only after your own state is the name of the game, why bother with the union? Get rid of the whole lot and save ourselves a whole lot of expense and headaches!
If the last few weeks have shown us anything is, that there is no Eurozone and that the speculators are righ to attack the Euro as there is no one in charge of it.
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dt;
"Marcus, I wish you would tone down your insults of the european people just a little."
You don't get it dt.
Hahahahahahahahaha....
I already have. Undiluted what I have to say breaks every rule BBC has.
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To EUprisoner re your point at 171
The other possible ways of co-operation perhaps of a more individual nature, sort of "a la carte" may work for a while for a larger country, like Britain, but smaller ones invariably struggle in many ways. I know from personal experience here in Prague. Very dark eastern figures, often called the Russian Mafia, have a great influence. It is a great battle to establish law and order, the corruption is enormous. British Aerospace is part of the game, but on the wrong side. They have been supporting corruption here. They paid a large fine, 100 Million or so, but we don't know who they bribed, so how can we clean up this country with that sort of "co-operation"?
Having "bashed over the head" a couple of EU Commissioners for not controlling our money efectively in one particular case I might agree with you here to some extend. On the other hand they have been tougher on other occasions. But the EU Parliament is getting more power to deal with those fellows. Then there is one other co-operation that is rather a very unhealthy one: the Tories have joined up with a bunch of crooks in the EU Parliament. Ted Heath would turn in his grave if he knew. How can we fight those crooks if the Conservatives give them cover. But this is another story.
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Re174... hehe Marcus.... but then don't you see it? We are here talking seemingly about an issue which is rather internal to Europe (apart the dodgy intermingling of some US investing companies) and the most passionate of all is an American you. Giving your opinion is not something bad but why such a passion anyway? I can give my opinion on Indonesia for example but 1) I do not claim to know much about the area and its politics
2) I am inherently not very passionate on the issue anyway
So, now do you realise what is the problem here? You are passionate about something you should not mind so much. But there is really something there that affects you (the you is plural, youguys as you say there...).
Its not the EU of today that you mind so much... but what the EU can possibly become.
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To: EUpris
From: viewcode
EUpris, hi!
In answer to the question you posed in post #16 (which nobody else bothered to answer)
The woman on the left of the picture is Christine Lagarde (http://en.wikipedia.org/wiki/Christine_Lagarde), France's Finance Minister (equivalent to the Chancellor of the Exchequer).
The man on the right of the picture is Jean-Claude Juncker (http://en.wikipedia.org/wiki/Jean-Claude_Juncker). Juncker is the current President of Luxembourg and the President of the Eurogroup
The man in the middle of the picture is possibly Wolfgang Schäuble (http://en.wikipedia.org/wiki/Wolfgang_Sch%C3%A4uble), Germany's Finance Minister, or Giulio Tremonti (http://en.wikipedia.org/wiki/Giulio_Tremonti), Italy's Finance Minister, tho' I may be wrong.
At a guess, the picture was taken during the last meeting of the Eurogroup (http://en.wikipedia.org/wiki/Eurogroup): given the subject, prominence of Juncker and the date, I don't think it was the ECOFIN meeting (http://en.wikipedia.org/wiki/Economic_and_Financial_Affairs_Council)
The Eurogroup is a meeting of the finance ministers of the 16 European nations (Austria, Belgium, Cyprus, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, Netherlands, Portugal, Slovakia, Slovenia, Spain) that currently use the Euro.
Hope that helps, viewcode
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Islandhopper1, @159
"Can you foresee your beloved Russia.. joining.. the EU" ?
?
?
First thought - the EU - never.
Second thought - Europe, in general, why, I mean o:)))), we'd always like more land :o)))) And when on offer :o))) - and someone more, several someones' more, beyond the current "EU", I mean, peacefully-quietly - wow, Yes!
Seriously, the EU isn't a hostile block. (until you start winning ice-skating), so I wouldn't write anything out. I mean, it behaves hostile to Russia often, but underground there aren't tragical differences, type communism-capitalism, land issue claims, strategic disagreements, so, it seems, nothing much stands in the way. Or does it?
Must be there is something, I have such a feeling. Hard to define what. We clearly don't like something about the EU but can't explain what.
And the feeling is reciprocal :o)))), by all looks :o))))
So, let's say, there is "something".
Then, what? Currently in Russia no one aspires to join the EU. Medvedev murmurs something vague, unrecognisable, at times, but at the ? can't explain. this "murmur" level. Like a cat purring.
But then we might have to, at some point. Either Europe will be unable to continue without us, or we will be unable to continue without Europe.
A reason. Some unpleasant disasters. :o) So, may be, it's better not even to look forward to such a scenario. Why to wish bad things for oneselves. ?
In peaceful times when nothing bad happens to either side I can see it only as a 2 partners, on equal footing, get-together, but in no way Russia "joining" the ready set of rules of the EU.
Say, the EU will have to change by 50%, and Russia will have to change by 50%, to get together. into something.
At that, no guarantee that that future "something" will be better than either side taken separately! :o)))))
But we can make use of some sensible attitudes and ? better practices, and of some values, borrowing these from Europe in the get-together. Certainly. Certainly. Especially because nothing else but values you have got! :o)))))
To Europe Russians won't move in big numbers, nowhere to, by Russian standards, you are living awfully squeezed up, no space for maneuvre.
So may be some Europeans will come over here, together with the precious for us "practices and values", in fact, looks good. We are shrinking innumber, and all who will come if the operational systems are aligned - will become Russians. Right? Right. In Russia - Russians. Voila. We get Russia living on, more population.
I saw crazy Germans yesterday in TV, a whole village by Omsk relocated from Germany recently. Real mad Germans :o))))) Brought with them an own city mayor, built very rich looking to me cottages, "Goete strasse", "Beethoven strasse" - honestly - signs in the small village. Just 5 thousand of them there or something. Children in the school speak German
(not on lessons, between themselves, in the canteen), people in the snowy street speak German! shops speak German, both customers and the ones behind the counter. Total crazy look in minus 20 in snow up to the roofs. A passer-by in the street (corner of old Lenin street :o))) and Beethoven street :o)))), in the hat with ears, you ask the way - answers in German! I'd be scared the first thing, like the 2ndWW.
But they seem happy (so far) :o)))) So all is possible.
As the song goes, "never say never again". That is,
"Don't give oaths "I'd never" - Life will lift up the bar (for you to jump over),
Don't say "I'd never" - fortune changes her colour.
My granddad spent 3 hrs in the cellar of Lubyanka -
And became white-haired, in un-full 30 years!"
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To: Freeborn John
From: viewcode
Freeborn John, hi!
Regarding your post #132.
You are correct that EU membership is not necessary for tariff-free trade to the EU, and the three examples you gave (the European Union – Turkey Customs Union http://en.wikipedia.org/wiki/European_Union_%E2%80%93_Turkey_Customs_Union, CEFTA http://en.wikipedia.org/wiki/CEFTA, and the Euromediterranean Partnership http://en.wikipedia.org/wiki/Euro-Mediterranean_Partnership) illustrate that.
But the issue is not cost-free: the regulations set down are decided by the EU, the power remains with the EU and, in practice, the other countries gradually align themselves to the EU.
It should be noted also that your second example (CEFTA) is specifically designed as an incubator for eventual EU membership.
Regards, viewcode
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Nik #176;
"Its not the EU of today that you mind so much... but what the EU can possibly become."
Once I was at the beach in the ocean and it started to rain. My first instinct was to get out of the water but then I realized I couldn't get any wetter than I already was.
So can Europe become broker than broke?
I have never known Europeans to show any restraint in commenting on anything and everything about America, usually in some negative way. So is there any reason why this one American should show any restraint commenting about Europe?
Do you really thing Europeans will be able to turn their situation around by themselves? Do you really think anyone from outside Europe cares what happens to it anymore and will try to come to its rescue? Hint, don't waste your time looking west across the Atlantic. Uncle Sam has better things to do. With the Superbowl behind us...spring training and Opening Day cannot be far behind. Play Ball!
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#177. viewcode
The man in the middle of the picture is not Wolfgang Schäuble. (After an assassination attempt many years ago he is using a wheel chair).
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The woman on the left is Juncker's therapist and the guy at the back his doctor. They are helping frustrated federalist Juncker during one of his fits of anglo-saxon speculator rage.
Not since last June, when Richard ‘I let the BNP in’ Corbett demonstrated to the Labour party the dangers of running with a federalist zealot on their Euro-list has the BBC brought such a heart-warming image to the EU-sceptic masses. Well worth the license fee ;-)
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To ChrisArta (141):
No. Let us think again. Latvia has GDP per capita (nominal) of 10,701USd and Belarus has 5,122USd. That literally means that every person in Latvia produce double the amount that a person in Belarus produces. Now if you say that an unemployed person is worse of in Latvia than in Belarus, then what the problem is, is not unemployment, but sharing of the products of the economy, in essence welfare and social benefits. If the Latvian state doesn't re-distribute wealth as much as it should to guarantee every person livable conditions, that is an internal Latvian political problem.
I also object to your note that it is better to have work for all people. Work isn't an absolute value, our western societies produce so much that it isn't necessary for all to work, it is good that people work, but isn't absolutely necessary to always work. Actually it is good that people don't have to work all the time, by having welfare and social benefits, people have the opportunity to re-invent by re-education or by enterprising themselves or to wait for an better opportunity.
In states like Belarus where the state creates work for people, the whole economic system looses. It first looses when people don't have time to think on what would suite them best in life, there is no re-education, no reinventing, no entrepreneurship, etc.. The second thing is that by staffing work with unnecessary persons, in time a work that needed only one person will require two persons, thus lowering the productivity of the economy even more. I should also add that work in case of Belarus is a way of social control, by putting all to work, there is no time to overthrow the dictatorship running the country.
The thing is that our western economies aren't the most productive by accident, they are most productive because of ways on how we have organized our societies and economies.
In regards of the internal working of the union, markets decide on how different states and societies consume. In case of Finland it isn't our fault that our companies our doing quite good products and services and are able to sell them, thus allowing us to have a trade surplus. Actually we must have a trade surplus and preferable soon a state budget surplus because people are aging and pensions and welfare are going to take more money, so all the savings will become very necessary. Also, as we are living in unbuilt world, developed nations should have trade surplus compared to non developed nations, we should export investment and infrastructure goods to developing world and participate to its finance, that would be the fastest way to advantage development all around the world.
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To Freeborn John (132):
"The EU economy is already one of the most open to trade: the EU average level of customs duty protection amounts to around 4% on industrial goods, taking into account MFN (Most Favoured Nations) rates." http://ec.europa.eu/trade/creating-opportunities/trade-topics/european-competitiveness/tariff-and-non-tariff-barriers/
So the average tariff is around 4% on industrial goods. Now be the tariff 2% or 4%, that is relatively large amount, especially if the product you are selling is highly commoditized thus profits margins are already short. Further more tariff isn't the only cost you incur, you incur also added overhead costs due to you or the customers having the trouble to calculate what the tariff will be, making the paper work and paying the tariff. Then there is the thing that people and organizations want to play it safe, if you are a small company, why order a product outside the EU when you can procure it with around same cost inside the EU.
In case of CEFTA, that was a free trade agreement that didn't constitute EU in it. Its current members are Albania, Bosnia and Herzegovina, Croatia, Macedonia, Moldova, Montenegro, Serbia and Kosovo.
http://en.wikipedia.org/wiki/Central_European_Free_Trade_Agreement
"On 31 December 1995 the customs union between Turkey and the European Union came into effect. [1] Goods can travel between the two entities without any customs restrictions. The Customs Union does not cover essential economic areas, such as agriculture, to which bilateral trade concessions apply, services or public procurement. The EU-Turkey Customs Union is one of the steps towards full Turkish membership of the European Union itself." - Do note the part about this being a step towards full Turkish membership in the EU.
http://en.wikipedia.org/wiki/European_Union_%E2%80%93_Turkey_Customs_Union
In case of Mediterranean countries, the EU has used Association Agreements to advantage beneficial development in those countries... "The EU typically concludes Association Agreements in exchange for commitments to political, economic, trade, or human rights reform in a country. In exchange, the country may be offered tariff-free access to some or all EU markets (industrial goods, agricultural products, etc), and financial or technical assistance. Most recently signed AAs also include a Free Trade Agreement between the EU and the third country."
http://en.wikipedia.org/wiki/European_Union_Association_Agreement
The thing is, if you want to have an free access to the single market, you must have something that the EU wants. Mexico has an Association Agreement, Canada is negotiation about it and they have some hardy discussions internally about what they are willing to give in exchange, South Korea also is only just negotiating on having FTA.
P.S. There is much more to Finnish economy than Nokia, Nokia isn't the only international company or the only big high-tech manufacturer. And in case of Apple, you must be joking, the value proposition of my current phone, Nokia X6, is much better than anything Apple can offer... Lets see... Better hardware spec, operating system with multitasking, free turn by turn navigation in off line mode, Comes With Music gives access to 6 million songs for a year and everything I have downloaded I can keep, and all this costs less than an iPhone. So lets think about it again.
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In his article Mr. Hewitt wrote:
“It is worth noting that the IMF will have a strong and possibly growing role in monitoring and advising the Greeks on their plans.”
This must be questioned. IMF is dominated by Americans and the economists in Washington has very little understanding for the European (read German) stability cult, Die Zeit writes in its background article. The article by Petra Pinzler and Mark Scheritz lines up a number point where Germany is unlikely to compromise:
1) The Euro will be defended and it will remain a European currency governed by Europeans.
2) For political reasons it is very unlikely that Greece will be expelled of the Euro zone.
3) If Greece goes down it might trigger off a domino effect in the Piigs countries, and in any case German economic interests in Greece will suffer from it.
This makes it likely that the Euro-countries and Euro-linked countries within EU will stretch out a safety net under the Greek economy, but the price will be that Bruxelles dictate a number of key figures on the Greek state budget, and Greece will have to report with short intervals. IMF is very likely to do exactly the same.
At the moment it is unclear what the consequences of the crisis will be. However, two things are emerging: There will be new rules for the finance sector, restricting (hopefully) its possibility for making damages. In this matter the Europeans can probably count on the Americans.
Secondly: The article in Die Zeit is titled “Merkel is learning French”. It is supposed to say that the Germans are now accepting a stronger role of the state, the French tradition of more government in the economic life than we have seen so far in Germany and in EU. Therefore the crisis seems to trigger further political integration in EU and more competence to authorities above the level of the nation state, or to mention what seems to be the monster to a number of British subjects: more federalism.
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#183
Jukka we are going around in circles. The point I was making and you half-admitted is still valid. The point was that with the type of "union" we have today in the EU a Latvian unemployed person would have been better off outside the EU, end of story!
Now if an unemlpoyed person is more "productive" been unemployed in Latvia or in Belarus, is a argument for econimists not for the actual unemployed person in Latvia. And the fact is that there a lot of unemlployed people in Latvia & Lithuania, etc. I'm sure the people are really excited because in theory they have higher productivity than an unemlpoyed person sitting at his home in Belarus.
The fact that Latvia has such high unemployement is due to their government pushing hard to join the Euro, so that banks from Sweden & Denmark will receive their money without the risk of currency devaluation.
You can propose all types of theory, but the fact remain on the ground today, people living in Belarus are better off than people living in Latvia. The EU has not shown any "union" concern for the unemployed people in Latvia. To the contrary, it publicly admits that the government is Latvia should be applauded. So, if the government is not working for the good of the people and if the EU approves of it. doesn't that point to an unfair union, where priority number one is profits for the banks?
No one said that Finland should do bad to the contrary, Finland and every other state should do well. The problem I have with the EU we have today is that it is not a "union" you also said that Finland must collect as much money as it can to cope with aging population. That goes back to the argument that Freeborn John keeps making that the EU will never work because there is no solidarity. If your idea of a union is a place where each nation only commits to what is good for its nationaly (again as in your argumant about Latvia) and not for the common good then it is not a union it is at best a "jobs for the boys" and at worse and as the anti-EU people will call it a conspiracy by Berlin-Paris to control markets for their manufacturers & bankers with out having to fire a shot.
I'm very pro-EU but I'm also pro-union, not this "a la carte" skin deep union, where each nation just looks after its own interests and doesn't care about anyone else. If it that is all the EU going to be then for sure were all better off on owr own and able to raise and lower tarrifs as it suits each nation's interests
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#185,
If, they do that it will restore my faith in the EU. If the Greeks can't manage their economy then someone who can should step in.
I support:
a) more integration
b) changing banking rules
Both long overdue
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Gavin: in March 2000, the EU set itself the objective, in the Lisbon Strategy, of becoming, by 2010, "the most dynamic and competitive knowledge-based economy in the world ....." (http://en.wikipedia.org/wiki/Lisbon_Strategy).
Will you be writing an entry in this blog to consider the extent to which this objective has been achieved? It would be interesting to read your views on this subject.
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To ChrisArta (186):
Solidarity doesn't mean that all decisions are done together and that everybody is provided the same, that is irresponsibility as it detaches responsibility from individual actors, be it an individual, community being part of an municipality, municipality, metro area, province or a state. If you pool up everything, the only thing that you are going to create is too big to fail entity which when it fails, takes everything with it. China was a good example of this and the USA is fast becoming a next example of it. Pooling up everything is not an responsible thing to do.
For example, lets make an example of Finland. After the WW2, we had a baby boom that in 60s, 70s, 80s and 90s provided us with ever increasing work force. However there were few problems in the making. In 60s we created our pension system, all workers started to pay small amounts of money to it, this money wasn't even enough to someday pay up pensions, to make matter worse this money was also used to pay pensions for the earlier generations too. The whole system relied on ever increasing workforce, as long as the next generation was bigger than the last one, there would be no problem. However the structures of the society and acts of the state didn't in the end support this, our fertility rate dropped below 2.2 that is required to maintain population size.
Fast forward to this day... our fertility rate is 1.83, meaning that not enough babies are born to maintain population... for every 100e I make, another 22e is contributed to pensions funds, which still is too less, and my own retirement age will probably be 70 or 75 and the pension a fraction of my current income, actually there is no guarantee that I ever will receive pension... Now if we today tighten our belts somewhat, work hard, work very efficiently, we can put some more money into savings so that one day we don't have to tighten our belts into extremes.
Now let me ask you, why should other countries help us with this problem that has been 100% of our own fault, and that we have seen it coming for some quite time, and decided to do too little and too late? And again why should other countries help us when we have all the necessary thing to solve our problems? Save up, work more, work more efficiently, then save more, work, work and work, have more babies, and so on... Actually if and when we solve our problems and can somehow manage our situation, do we have to help other countries too? For example in Greece the baby boom started after 1949 when the civil war ended, when in Finland it started in 1945.
The thing is that as long as we do decisions in the country level, we have to carry the responsibility in the country level. If it would have been the EU that told us to have a pension system that we have now, then it would be the responsibility of the EU to solve it. The same is true with Greece, if the EU or the ECB were making decisions regarding usage of derivatives to hide debts, or running too high spending, then it would the responsibility of the EU to solve that situation. However the fact of the matter is that Greeks made their problems happen and they carry the responsibility to fix them, same is too with Finland.
I would also make a note that are you sure that you know better what is good for Latvia or Latvians? The Latvian government, elected by the Latvian people, has made these decisions, they have made decisions to maintain their curse on making sure that they can join the Euro as soon as possible. The people have chosen to suffer now, to tighten belt now, to make sure that in the future they all fare better.
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Re: * 177. At 01:18am on 20 Feb 2010, viewcode
EUpris: Thank you for your helpful reply.
To others: Sorry, but I haven't got the time to reply at the moment.
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Freeborn John wrote:
"Dt (160): “Government now operates to ensure bank shareholders are protected from any losses”
The shareholders of Northern Rock, RBS, etc. were all wiped out. The government rescue was only to protect depositors, and only their first £50k on deposit at any one bank. Banks are not just any business, but the lubricant that efficiently moves savings to wherever they can be used to generate the best rate of return. If the lubricant is removed (because depositors think their money is safer under the mattress) then projects that could have generated a return do not happen and the capitalist system grinds to a halt.
We have the less than perfect situation that some banks are now government owned, but the wider economy is still being lubricated with deposits held in banks. This is simply the least worst alternative available given that what happened happened. "
John, i don't think you understand what happened. With respect, I don't think you understand the fundamentals of how companies are structured, nor what it means when governments buy their shares after they have gambled all their money away in the market.
These banks were not involved in merely loaning money to "lubricate the market". Their staggering losses arose from market speculation, from deals whereby huge sums of wealth were transferred to other companies under the guise of share trading.
This process made a lot of people very, very wealthy, without even going into the detail of the massive bonuses which were made by the executives of the banks over the years, nor taking into account the dividends which were paid out to the shareholders over the years.
Let me give you a concrete example, involving RBS. That is the Queens bank, so how it did business should be of immense interest to the average UK voter.
In October 2007, a mere year or so before the great meltdown, RBS paid 71 billion Euros for ABN Amro. So that means RBS took 71 billion euros and gave it to ABN amro shareholders. That is a truly vast transfer of wealth. Now at the time everyone said it was far too much to pay (remember this was even BEFORE the great meltdown, when everyone became aware how valueless the great banks truly were). But it was nobodies business except the board of RBS. The shareholders of RBS decided to transfer 71 billion euros to the shareholders of ABN Amro.
Now THINK about that, and while you do, consider the very real probability that the shareholders of RBS are very likely exactly the same people as the shareholders of ABN amro.
If that is the case, or if the same families own both banks, then what has happened here?
What happened to RBS just a year before it became worthless and massively indebted?
The people who owned it transferred 71 billion euros to the shareholders of another organization. They effectively took 71 billion euros and moved it.
And there was absolutely nothing the government could have done, nor any way of knowing who owned what in which company. Sure, you can check the register of shareholders of both banks, but what you will find is that the major shareholders are companies, not real people. And when you check the register of those investment companies, you'll find they are owned by trusts and companies. And when you check the ownership of those companies and trusts..... then you find they exist in jurisdictions where no register of owners is available to the public.
Try it. See if I Lie. Anyone can do this research from their home computer, if they are curious to understand how the anonymity of corporate ownership works in the big wide world.
So when the UK government buys the shares of RBS and takes on the debt of that bank, and it pays 15 billion pounds for those shares, it is not simply paying the shareholders for worthless shares. It is taking part in the last of a series of business transactions that have made a lot of people very, very wealthy over a period of decades. Those people did not get wealthy by accident. Those people are not ignorant of the debt they create, and they are not, as you suggest, "wiped out". If you check, the queen still lives in Buckingham palace. She is not "wiped out". She's doing fine, as is her family firm.
In any case, you are just repeating what you have read in the financial corporate press without understand it.
It is ridiculous to suggest that if the current banks are truly let go bust, there will be no more banks. The market doesn't work like that. When companies in an industry go bust, that creates a market opportunity for new companies. It creates the possibility for new managers and new investors to try new methods of doing business, and making money where the old guys made losses.
You are repeating the mantra that we need our current bankers because they are irreplaceable.
That is the greatest lie since Lenin was proclaimed as the crucial irreplacable man in the soviet union.
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In my posting at 175 I mentioned that BAE (British Aerospace) had paid fines of about 100 million, this should read 300 million dollars. This was for "accounting irregularities", the term that was agreed upon. The money goes to US and UK coffers respectively. The dammaged "parties", or if you like, the victims which include Hungarian and Czech ordinary citizen are not only not compensated but have to spent more money and time to investigate corrupt politicians. Greek citizens are of course in a similar position, the crisis there being due to a long "tradition of corruption" at many levels.
There is some irony in this, since Mr Darlings "coffers" are getting quite a few millions for the dammage done to the Hungarian and Czech citizens, it is they that in a roundabout way provide help with the British deficit.
Anybody grateful out there?
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#189
So basically Jukka what you are telling me is the same thing that Freeborn John & CBW have been saying all alone. That the EU is not a union, it is powerless to have any impact on the every day life of its citizens, the only purpose that it is there is as CBW puts it for "big government, big business". Also as Freeborn John puts it, "there is no demos" for the EU to exist.
Now if you are right, I feel sorry for the poor fools in Greece, Latvia & elsewhere that are break up their societies in order to become markets for a few big companies. I'd like to believe you are not right by the way I prefer to believe that EU is there to support all its citizens regardless of their geographical location.
As I said many time before I don't care if my taxes help someone next to me in London or someone in Wales or someone in Rovaniemi. Once the tax amount is taken out of my pay packet, if that money goes to help an Englishman or a Hungarian means the same to me. I don't see the need for a "demos" that Freeborn John sees and by the looks of things you also.
Regarding Latvia one doesn't have to be an expert to see that what their government is doing is not in the contry's interests but in the banks interest! Even the government itself admits that its policies are making the situation for the country and the citizens worse, so if their government admits it, it doesn't require much additional knowledge to say it. The government said that the policy it follows in order to join the Euro makes the situation worse it was in a BBC report that I read.
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... anyhow my own guess is that the way the Euro is managed today (or not) will have to change. There will have to be some type of rescue mechanism if a country gets into trouble and life will go on, and the Euro will be stronger and more countries will join it.
I say the above because the alternative is to do nothing, say all is well, the Euro is perfect, it was just on country!! No one will believe it, another country will get attacked and the Euro after the second attack will colapse.
Thus Euro management mechanism is the cheaper and more logic option.
Of cause the Euro original thinkers will scream and cry don't ruin it is perfect the way it is, it ensures countries keep tight policies, but no one has done that so far, so they already been proved wrong :))
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To ChrisArta (193):
http://en.wikipedia.org/wiki/Eu_budget
I hate to use figures calculated by Open Europe as they are contested before and I have before also criticized means of calculating them, but they do give some direction. In the EU budget, between years 2007 and 2013, Greece gets 25 billion net benefit. We already transfer from richer and more developed EU states money to less developed and less prosperous states to help them to build and renew their infrastructure and in general help their societies work much better. With this transfer of wealth I don't have any disagreement, the money goes to good cause and will eventually be earned back. What I have strong disagreement is bailing out countries because of their own incompetence.
For crying out aloud, in the good years the Finnish state budget had some surplus and we were able to decrease our debt both in absolute figures and relative to GDP. Now that didn't happen without costs, the public sector has done much to rationalize their functioning, in essence sectors like health care and education are over worked, under staffed, under paid; people are sent home as quickly as possible from hospital; too many mental patients are in outpatient care; student benefits, unemployment benefits, pensions, etc.. have remained behind the economic growth, etc... Still the taxation hasn't gone down much, tax revenue as percentage of GDP is still 43,6%. If we are going to give money away from here, we going to have cut, cut and cut are own expenses until we have fiscal balance and hopefully a surplus so that we can start to pay our debts back.
To be quite frank, it does irritate quite much to being said that we must give more than we give now just because some people were financially irresponsible and didn't want to pay the bill. For example now Germany has just proposed approx 20-25 billion euro help package to Greece paid by other Eurozone states in accordance to their share of the ECB capital. In case of Finland that is approx 440 million, that is how much we have to loan from the markets, and someday pay it back. Actually as size of our debt per GDP grows, we will pay more by having higher interest rates set up on us, also has our debt to GDP grows more we have to start pulling cuts to public spending, raise taxes, etc.. tighten the belt.
I really don't have problem on the EU spending on less developed states to help them develop and become more productive and efficient, but I have large problems on just wasting money on state welfare. If we are trying to pull a tight shift to pay our expenses, and give some out, then why can't we expect the same from others?
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To ChrisArta (194):
Greece isn't being attacked. The fact is that their previous administrations hide debt in order to deceive not only other EU states and the ECB, but also markets to appear being more credit worthy that they actually were. They overspend the whole decade money that they didn't have and the amounts just went up and up. Markets aren't attacking Greece, markets are rebounding from the fraud that Greece state committed. Who in their right mind would lend money to a entity that deliberately made a fraud and which overspend without any plan on how finances would be balanced out in the future and how debts would be paid back.
The thing is, Greece doesn't have debt problem, it has an overspending problem. The moment the Greece state slashes out cuts that will stabilize the Greek states budgets, starts to earn surplus budgets, start to payback its debts, then in that moment markets will again start to truest Greece and its ability to handle its finances.
In case of Greece, Euro and the investors, letting Greece handle it on its own is the right way to follow. If investors loose because of a default, then they will learn that not all countries in the Eurozone are equally trustworthy. If the Euro looses some credibility due to having members like Greece, it is a good lesson to the EU and ECB to make sure that they take in members that actually have some idea of what responsibility is, and in case of Greece the country will learn that at the end of the day somebody has to pay the bill.
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To: EUpris, Mathiesen, and others
From: viewcode
Hi!
Mathiesen is right in his post #181: it isn't Wolfgang Schäuble. Even worse, it's not during the Eurogroup meeting of 15 February (Christine wore a black jacket to that one). So I went into "Shooting the Past" mode (http://en.wikipedia.org/wiki/Shooting_the_Past) and worked it out.
The man in the middle is Philippe Maystadt (http://en.wikipedia.org/wiki/Philippe_Maystadt).
He is the President of the European Investment Bank (http://en.wikipedia.org/wiki/European_Investment_Bank).
The encounter took place during the roundtable part of the Ecofin meeting of 16 February 2010 (http://en.wikipedia.org/wiki/Economic_and_Financial_Affairs_Council).
A video was taken of that roundtable (http://tvnewsroom.consilium.europa.eu/story/index/story_id/15357/media_id/32036).
The shotlist of the video says that encounter took place between 00:04:37 and 00:05:00 of that video [Unsuitable/Broken URL removed by Moderator]
Ecofin is the meeting of the economics, finance and associated ministers of the 27 European Union member states.
A press release for the Ecofin meeting of 16 February 2010 is here; (http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/10/38&format=HTML&aged=0&language=EN&guiLanguage=en).
So there you have it: the three people are Christine Lagarde (http://en.wikipedia.org/wiki/Christine_Lagarde), Philippe Maystadt (http://en.wikipedia.org/wiki/Philippe_Maystadt), and Jean-Claude Juncker (http://en.wikipedia.org/wiki/Jean-Claude_Juncker).
In my defense, I need to point out that:
* nobody else even tried to answer the question
* I qualified my original answer with a "possibly"
Hope that helps, viewcode.
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Viewcode (179): It is true that all those who sell a good in a member-state of the European Union have to comply with whatever EU regulations exist about such products. But those regulations are a different thing to tariff-free access to the EU market. If you buy a TV set from a Japanese company the manufacturer will have to comply with EU regulations to sell it, even if it is not made in a state that is either a member of the EU or one of Free Trade Areas from which it can be shipped without tariffs. So i don't think those regulations imply any power over Balkan, Euro-Med, etc. countries with tariff-free access to the EU/EEA/EFTA market that is not there for manufacturers from the Rest of the World.
In any case, the 'power' to set product regulations (mainly health and safety, environmental rules) is a very minor one, and not the same thing as a real political power over people, which is what the EU wants and must be stopped from getting.
The point that Jukka was making, which is wrong, was that Latvia, Lithuania, and Estonia only got tariff-free access to EU/EEA markets when they joined the EU. They already had tariff-free access to the European market for their industrial goods (though not all agricultural produce) 10 years before that by virtue of an agreement between the EU and Baltic Free Trade Area (BFTA) of which they were part. The same is true today for Balkan, East Mediterranean and most North African states.
Jukka should acknowledge that his theory, of the EU strongman holding a gun to the heads of these states and forcing them to sign unfair trade agreements, has no basis in reality. Indeed the opposite is the case, because these countries have free access to the European market for industrial goods(and many of them also free access to the US market too), while European countries do not have free access to their markets (Tunisia excepted), at least so far.
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Jukka (184): I double-checked my data and the average tariff paid on an industrial good imported into the UK from outside the EU/EEA subject to a tariff, is 1.6%. So how to explain the difference between your 4% figure and my 1.6% figure? Mine is based on what is actually collected, where as yours is an average from EU tariff tables. Many industrial goods are not in the tables (and so tariff-free) and those with below average tariff tend to get traded more than those with above average tariffs. So when weighted for the actual volume of trade, the average tariff that is actually collected is lower than the average in the EU tariff table.(Note this also means that different European countries can actually pay slightly more or less than the EU average depending on the different types of products they actually import).
The 2010 Index of Freedom says “The common EU weighted average tariff rate was 1.3 percent in 2008”. That is the same as the average weighted Japanese tariff, and slightly lower than the weighted average U.S. tariff of 1.5 percent.
http://www.heritage.org/index/Ranking.aspx
In any case, a debate about the exact nature of a small number can lose sight of the bigger picture and it is there where your bigger error lies. These low tariffs do not distort the market for manufactured goods as a look at all the “Made in China” labels on the back of things around your home (even those from local companies) should confirm. Other factors are far more significant that a 1.3% tariff, particularly labour cost which are hundreds of percent higher in Europe than in China or India. So while we should try to eliminate tariffs entirely, they are not the great problem they were in the 1970’s (except in agriculture where they are still over 10% and big enough to distort trade).
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#195
Jukka we don't give money just to Greece we also give money to Africa and other parts of the world. That is not called a union! As you said most of that money we give comes back to us, because it is our companies that build the infrastructure there.
Either you want a union with all its bells and whistles or you don't as Freeborn John says, he don't want a union because he doesn't want his money to go and support anyone outside the UK, fair enough, I disagree with him because I don't care if my money goes to support someone outside the UK. But at least he he doesn't say he is pro-EU.
For me the word union means that when someone in the union is in distress then everyone else helps, the Euro & the EU with the problem that popped up by Greece in the last few weeks has proved that it is not a union. If nothing is done the EU "dream" is over, we are all better off to stop having illusion that we are a union and go back to been 26 happy states, with our own national currencies our own duties and support our own industries to employ our own people. I see nothing wrong with option, I don't want it but if we are not a union, then drop the pretends of been one.
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To: EUpris, Mathiesen, Freeborn John and others
From: viewcode
Hi!
Mathiesen is right in his post #181: it isn't Wolfgang Schäuble. Even worse, it's not during the Eurogroup meeting of 15 February. So I worked it out. Unfortunately, my post #197 was crosslinked and fell foul of moderation. So you'll have to be happy with this truncated post.
The man in the middle is Philippe Maystadt (http://en.wikipedia.org/wiki/Philippe_Maystadt), the President of the European Investment Bank and the picture was taken during the roundtable part of the Ecofin meeting of 16 February 2010.
So there you have it: the three people are Christine Lagarde, Philippe Maystadt and Jean-Claude Juncker.
In my defense, I need to point out that:
* nobody else even tried to answer the question
* I qualified my original answer with a "possibly"
Hope that helps, viewcode.
If my post #197 clears moderation, then this post is redundant: apologies.
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To Freeborn John (198) and (199):
Your link didn't work, but I'm going to take your word on it. 1.6% figure is actually surprisingly low, but then again with commoditized products, like most basic industrial goods are, I would still claim that number to be significant.
For example on trade deals, please take a look on the EU - Canada negotiations about free trade agreement.
"The draft intellectual property text of the EU - Canada Trade Agreement has leaked, with news that the EU is demanding that Canada fundamentally alter copyright, patent, and trademark law. The laundry list of demands includes copyright term extension, WIPO ratification, DMCA-style legislation, resale rights, new enforcement provisions, and following patent, trademark, and design law treaties. The net result is that when combined with the ACTA requirements, Canadian copyright law may cease to be Canadian."
http://yro.slashdot.org/story/09/12/18/1531216/EU-Demands-Canada-Rework-Its-Copyright-Patent-Law?art_pos=2
Now of course these are just negotiations and the EU may not get what it wants, but still, I would say that this at least gives some indication that the EU has via import tariffs considerable power to negotiate trade deals witch are more beneficial to it.
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#196,
also Jukka what about Spain & Portugal, they did not lie about their debt (at least not that we know) yet their bonds were under attack also and their spread to German bonds hight just after Greece a few weeks ago. Would you support their borrowing, or you support to EU states borrowing goes as far the Helsinki outer suburbs?
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To ChrisArta (203):
Spain and Portugal ran account deficits before the financial and economic crisis had even began. For example Spain ran high account deficits in good years, in 2008 which still was a very good year, the account deficit was already 10% of the GDP. Now add to this backdrop that the economic crisis has deepened still, unemployment has exploded in Spain and account deficits haven't started to decrease.
http://spaineconomy.blogspot.com/2009/10/spains-current-account-deficit-folds-in.html
The reason why markets have been nervous about Spain and Portugal is their economies are going into an even worser state without any hint on that their governments are going to take action to decrease their deficits quickly. Another reason why markets are nervous is that if Greece default or restructures its debt, banks that loaned money to Greece will either go bust or shutdown their loaning, thus putting Spain and Portugal into a position where very quickly they won't get any new loans as their creditors went bust, thus putting their ability to pay back old loans with new loans under severe question.
In any case, I don't support borrowing. We all should try to manage with own means, if we earn less, then we should spend less. Yes, in downturn states should spend some to balance it out, but if their debt ratio to GDP go too up, they should start cutting and saving. At the end of the day, somebody is always going to pay up the bill and as sooner we tighten our belt, the less we have to tighten it.
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Jukka (202): My understanding is that the Europe/Canada Free Trade Agreement seeks to go beyond the elimination of tariffs to get rid of some non-tariff barriers used by protectionsts. Free trade is a not a zero-sum game. It is one of those "win-win" scenarios so please put away your big-gun theory because there should be no need to coerce the Canadians to get them to do what is in their enlightended self-interest anyway.
It is because the EU is now trying to get into zero-sum (I.e "win-lose") issues in Europe that it feels the need to coerce the losing national 'demoi' (and there must be losers in a zero-sum game) i.e. by QMV or fines, etc. and is becoming increasingly unpopular.
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Marcus,
In America, I am impressed by employers hiring proceedures.
Here one can get a job by having the appropriate qualifications and good references. I do think that is very fair, very practical. One is valued according to how hard one works and the image one projects of the company to the customer. That really needs to be emulated by the EU.
When I was last in the Netherlands, I met Europeans who told me that anyone applying for work there had to show proof that they had a residence (which could not be a hostel, hotel etc!) before they could get a job.
This kind of ridiculous red tape from the paranoid Dutch needs to be gotten rid of.
I am very much in favour of the EU, but it does have a lot of catching up to do.
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Sueddeutsche Zeitung (South German Newspaper) reports speculation that Greece will receive 20 to 25 billion Euros from the Eurogroup based on reports in Der Spiegel. Up to five billions of that to come from Germany.
Reportedly there is an intention to found a European version of the IMF to deal with future cases.
Some of these comments are disputed by the German ministry of finance,
The Greek Prime Minister reportedly claims the EU is partly to blame for the fact that Greece was able to fiddle the numbers and the data for so many years.
The EU should have checked up on Greece more. "The EU must recognise (accept?) that a failing of its institutions is also to blame for the fact that such things were allowed to happen."
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EUprisoner;
Very funny but hardly original. The criminal blames the police for not having caught him sooner. Who will put up the extra 15 to 20 billion? I thought the gap is 50 billion. Where will the other 25 to 30 billion come from? If there is a gap and it isn't filled, is throwing the 20 to 25 billion at it just throwing good money after bad? What happens when the next little PIIG comes out of the oven and is done to a turn? Where will all this Euro-IMF money come from? If the Germans are reluctant to put up even five. Hey I know. It could be paid off in those Zimbabwian dollars they used a couple of years ago. You know, the ones where it took ten billion dollars to buy a loaf of bread and they papered the walls with for all they were worth. Germany's economy could be headed back to the 1920s despite itself....but not politically.
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Nik,
Russia is not "ice cold" to the concerns of Greece.
:o)
No, we didn't give money, true.
But your PM didn't ask for them either.
(It was just vaguely mentioned :o) that Greece needs to find out somewhere forgot, 23? 25? 30? bn to service payments on state obligations in March, and vaguely mentioned by our Fin. Minister that unfortunately Russian budget for 2010 is stitched together with a deficit and we decided to borrow ourselves, for the first time, in years.) The real reason of course is the Fin. minister sees it as a bad debt in future, because no one so far figured out in what type of a joint venture or a common enterprise or how otherwise to get the loan at some point in time back.
But Medvedev ran the Greece question through several profile committees (various industries) demanding that someone figures out the way how to help Greece.
Agricultural minister said she doesn't see a way, as regards her part, as "Euro Union does not encourage the agriculture providers positioned on the out-skirts of the EU to make excess products so Greece doesn't have a surplus to sell to us. And their vine-graperies are cut on the demand of the EU."
I didn't understand her how suddenly you are not "in the centre" of the EU what she meant, but I guess after she spoke with the Greek partners she somehow understood something which is you don't have a surplus in agricultural production which Russia can buy right now.
The Immigration committee was also thumbs down saying we can not "import" the Greek as any "arbeiters", because they are more expensive than our regular builders Tajik Moldovian etc former USSR so a large scale proggramme he can't see a way, another standard of living in Greece, on the money Russia pays the Greek people won't be able to support themselves on return home.
On the oil pipe delay you weren't blamed because the matter got stalled pending Bulgarian steps. The ball is in Bulgaria currently. Though a problem for the future is envisaged that Greece won't be able to pay for her part in constructing the oil pipe because it is a joint 3-countries' project, aiming at common financing of the project and at common profits from it. (But where there are profits in view I think the tube finance will be settled somehow :o)
On the gas pipe delay Greece was not blamed either, don't even worry about it, as min in media no one said nil. Because there is no "delay" yet, all goes according to the plan, and currently all are focused on the North stream, South stream after.
I am afraid the only practical things figured out for Greece so far were an invitation to build whatever you can for Sochi Olympics and we shall pay you, and as I understood Putin he won't be comparing Greek quotes with other inernational bidders :o))) He said "Greece has experience they recently ran Olympics". So that's it.
Another offer was to run some cruise lining in the Black Sea on your ships, for ordinary tourists, with stop-overs here and there, to bathe or see the sites or whatever. Because "Greece has experience", again.
That's 2 Putin's ideas so far, and it is not much to put it softly, but still can be something.
As I said, you are welcome back to the Black Sea.
Putin also shook some oligarchs demanding that someone desires to build in Greece any piece of industry, because "Greece needs heavy industry, something that will work for a long time" but must say the faces of the men in the room were far from happy :o)))), they mumbled something about high costs of operating in Greece as compared to home :o)))) but Putin anyway made up his mind that "someone from the metal making industry, steel makers or something" ought to go and investigate the grounds.
That's all, honestly. Alas.
Practically, nothing. But some moves were made, as you friendly enquired type if there is anything possible.
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Here's an idea for Greece to raise some money. Sell the Elgin Marbles to Britain for a few billion. Greece isn't going to give them back anyway so it might as well get something for them.
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If everyone can put down the flags and stop anthropomorphizing the nation state for a moment, I'd like to run some figures past our resident high brow economists, and see if they agree with the general conclusion.
Right now public debt in the EU is upwards of 62% of GDP. It was 61.5% in 2008, and it has gone up since then. Let's be generous and say it is 62% of GDP.
GDP in the Eurozone in 2008 was about 18.5 thousand billion US dollars. So by my reckoning, the combined governments of Eurozone countries are in the hole to the bankers for about 11.5 thousand billion US dollars.
So that means the governments of the Eurozone countries have borrowed 11.5 thousand billion dollars which they have yet to repay. That is where we are, in the Eurozone. That is how the governments of the member states have been playing their hand, up until 2008.
Now assuming the interest rates on that debt is around an average of about 4% (I take this figure from the ECB website), that means that eurozone governments are paying 460 billion US dollars each year in interest to private investors.
460 billion US dollars each year is being raised in taxation and paid to the people who lend money to governments.
The population of the EU is 500 million, more or less.
So that means that every man, woman and child in the EU is paying 920 US dollars each year in tax, just to see that money go to the pockets of the private investors who lent money to government road agents.
Given that around 65% of the population are working age, that means each worker is actually paying 1420 US dollars in tax as interest repayments to private investors in government debt.
Given further that EU unemployment stands at over 8%, we can increase the tax due for working folks to 1530 US dollars, give or take a few beers.
Each.
So that is how much this thing called government debt costs the workers, and more importantly how much it transfers wealth from the workers to the bankers.
Remember, this money is not paying for anything. It is just interest on debt. It is a direct transfer of wealth from working people to investors who act as governments creditors.
Now my point is simply that this is the EU now. Or, in 2008. Now it is much worse.
This is where we are at, after years and years of the same folks running the show. 460 billion US dollars are sucked out of the people and handed to the bankers each year, instead of that money being spent on infrastructure and jobs for people doing real things for real people.
Curiously, 460 billion dollars would create salaries of 17'650 US dollars each for 26 million europeans.
Now that is exactly how many working age folks are unemployed right now. 26 million.
So instead of sitting around doing nothing, these people could be working providing useful services to their community and growing the value of the economy. If only the public debt were not taking the revenue required for this effort and giving it directly to the bankers.
Who sit around and calculate their profits, and speculate on currencies.
In other words, if European governments sat down with the investors and wrote off the debt, everyone could be working in useful jobs.
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All references to "eurozone" in my previous post should be to the EU instead. The figures are based on the EU, not just the Eurozone.
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The economist.com is saying the uk and usa are also in some danger of this "greek" debt wipeout..puts it all into perspective..huh?
(either the economist site or the angloshere, something smells off puttingly snarky)
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dt;
What do you mean "just write off the debt?" How do you just write it off, what exactly does that mean? If it isn't paid back, you don't expect anyone to ever lend the EU another cent do you? The entire economy of the EU and most other nations is based on financing through debt. Lose your credit and basically you are financially dead. Isn't that what this is all about? It is one thing for governments to forgive debts to poor nations on behalf of their hapless taxpayers but don't expect sympathy from banks who have to actually answer to shareholders. From pension funds that have pensioners to pay. Not to the tune of half a trillion dollars a year. There is only one out, cut government spending, live within your means. Spend less than you take in especially until that debt is paid off. Europe lives too fat, too rich, it is not sustainable. The US has the same problem only it may have more room and more time to maneuver. Europe's day of reckoning has arrived.
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MarcusAureliusII wrote:
dt;
"What do you mean "just write off the debt?" How do you just write it off, what exactly does that mean? If it isn't paid back, you don't expect anyone to ever lend the EU another cent do you? The entire economy of the EU and most other nations is based on financing through debt. Lose your credit and basically you are financially dead. Isn't that what this is all about? It is one thing for governments to forgive debts to poor nations on behalf of their hapless taxpayers but don't expect sympathy from banks who have to actually answer to shareholders. From pension funds that have pensioners to pay. Not to the tune of half a trillion dollars a year. There is only one out, cut government spending, live within your means. Spend less than you take in especially until that debt is paid off."
you make a fascinating case, marcus. you first say the debt cannot wiped out because that would mean nobody would ever lend to governments again. you then make the case that the only solution is for governments to never borrow and to live within their means.
This is the great lie about government debt: that it does anything more than simply transfer wealth from the taxpayer to the bank shareholder.
Anyway, the banks know all about wiping out debt by increasing taxes. I don't know if you have been following the news lately, but there was this thing a few months back.....
You see, it is no problem to levy a tax on taxpayers to wipe out bankers debts so they can start fresh.
So why is it a problem to levy a tax on bankers to wipe out the taxpayers debt so they can start fresh?
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dt;
"This is the great lie about government debt: that it does anything more than simply transfer wealth from the taxpayer to the bank shareholder."
Yes what debt really does is transfer wealth from the future to the present. Your children will pay tomorrow for the money you borrowed and spent today.
"You see, it is no problem to levy a tax on taxpayers to wipe out bankers debts so they can start fresh."
Except for one thing, taxing people who are nearly broke themselves will only make them insolvent too. It will also seriously damage the economy by soaking up discretionary money for retail purchases and any money available for business investment.
"So why is it a problem to levy a tax on bankers to wipe out the taxpayers debt so they can start fresh?"
Why not just hold a gun to their heads and steal it, it's the same thing? If you do that, not only could the banks become insolvent, nobody will ever willingly lend you money again starting tomorrow. People lend money they've saved because they didn't spent it to make a profit called interest. If they can't be sure of earning interest, what reason would they have to lend it out anymore, at least to the governments who stole their profit from them the last time?
Sorry dt, you get an F minus in economics. Go to the head of the class, you qualify as a professional economist. I'm sure there is a government job with your name on it. Now all they have to do is find a bank that still has money in it they can rob to pay your salary.
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To democracythreat (211):
Why are you using dollars in your examples? Most if not all debts that the Eurozone states have are denominated in Euro, at least that is the case around here.
However you made a note that a huge amount of money is being paid to people who loan money to governments. What you didn't make a note of is that those people are largely us average Joe's mostly via our pension funds. For example for every 1e of gross pay I make, another 22c goes to pension fund. Pension funds invest that money largely to various government bonds and some go to other forms of investment like stock.
Now why are governments loaning money? Well, because sometimes governments can invest that money efficiently so that the economy works better and produces more in the long run. A traditional example of this could be building a large infrastructure project like a hydrodam, nuclear plant, rail road or a motorway. More modern example could be investment to additional education, like educating large amount of telecommunication and electric engineers to get those few booming corporations up and running. All is well as long as the GDP grows quicker than the debt.
In case of Europe and in some part also the USA, is that we can't anymore build our GDP growth just to rely on expansion of workforce. In good old days states could run infrastructure expansion programs more or less without worry as the expansion of workforce would anyway make that investment to pay itself off. However with either stagnating or plummeting workforces, it is harder and harder for governments to make that investment so that it actually introduces more GDP growth than what was spent on it.
The thing in Europe is that governments have to slash their expenses, to remove the glut in the system which there is lot even in our system, rationalize, make more efficiency, automate, etc...
Debts that European states have are not workable, however to make them workable politicians and the people will have to start thinking with a much bigger scope, we should be asking on where we are in 2030 or in 2050 if we follow the current track, and if that isn't very likable picture drawn out, what can we do to fix that.
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What an absurd statement "Even if the EU breathes life into a rescue package the euro is wounded." If that is true than what does that say about the pound sterling which has fallen like a rock against the Euro making it impossible for many British citizens to continue to live in EU countries. Some 10 years ago a US$ was worth something like €1.15 whereas today it is worth only €0.73. What does that say about the US dollar? I would say that one of the problems for the Euro is that it is too high making exports more difficult, and so if it should drop in value against other currencies than that should be welcomed, as it will aid not only exports but tourism which is at effecting Spain as the world's second largest tourist destination.
Although Britain is technically part of Europe I do not consider them Europeans. Mainland Europeans have much more in common with each other and will resolve this problem in their own way .... Europe without a common currency is unthinkable!
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The chaos we see currently within the Eurozore is due to the fact that there is no political unity within the group, the value of the Euro will suffer more if the Eurozone leaders don't find the courage to sort out the mess the eurozone is in at the moment.
If when a Eurozone country that account for about 3% of the Eurozone causes the Euro to drop like it did in the last two weeks what is going to happen if any larger country finds itself in trouble?
Of cause most economist will say "it should not happen, if everyone keeps to the rules" the problem with such a statement is the "if" it contains.
So, lets make the changes now so we can sleep safe knowing that "if" it happens we have a plan to deal with it. Unlike the current state of affairs where no one has a clue as to what to do.
@Jukka,
When the markets finish dealing with Spain & Portugal there is also Belgium, France, etc. So the list in theory can run through every single member of the Eurozone until there is only one left. running around to please the markets is the way forward the way forward is to make a stand and push back to let the markets deal with areas that they know what they are doing like keeping banks healthy, ooops they failed on that already!
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Jukaboxa:
"To democracythreat (211):
Why are you using dollars in your examples? "
Because it is convertable into dollars....for the moment."
"However with either stagnating or plummeting workforces, it is harder and harder for governments to make that investment so that it actually introduces more GDP growth than what was spent on it."
It's part of a syndrome that results in more and more people out of work who demand more and more unemployment benefits with fewer and fewer tax revenues to pay for them, and an ever decreasing private sector activity generating wealth and taxes. I call it a death spiral.
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ChrisArta & all Brits considering the European Union is the better option
Re: Jukka_Rohilla and his '%' cuts, cuts, cuts, cuts, cuts...
Hope a little of what this ardently pro_EU wrote on this topic along with some of the open and other not far-off anti-Brit/US comment of Mathiasen, frenchderek, nik, mike dixon, smroet etc. opens your eyes just a little to the nonsense peddled by those hankering for the illusory 'perfect' EU that can never be seen or found to have got anything wrong at any level on any issue for any reason.
Their basic line is always: 'EU IS GOOD; ANYTHING ELSE IS BAD!'
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19. At 1:30pm on 21 Feb 2010, ChrisArta wrote:
When the markets finish dealing with Spain & Portugal there is also Belgium, France, etc....
--------------------------------
So financial markets start a domino effect of blackmail and then financial terrorism. One should not deal with blackmailers so how is this cycle stopped?
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#221,
Yes, some of the comments are a bit "out of this world" at least with Freeborn John I know where he stands, with Jukka's idea of "union" I'm confused.
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#222,
Pass laws that turn the banks back to been banks and if the finance sector gambling addicts need to gamble they can go to their local ladbrokes and place as many bets are they like but with their own money and with the risk of loosing it, not betting knowing the government will bail them out.
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To ChrisArta (219):
True and this is what the markets will into some extend be doing, maybe. However what you have to note is that everybody is in a tight spot. If you invest into USA or UK bonds denominated in their local currency, while they with high probability will be paid of, there is no guarantee on what the actual value will be, because of all the printing of money. Now if all states keep things going on as they are right now, then we will have at least some exodus of money into stocks and equity. Governments all around the world that refuse to print money will feel eventually the pain on finding funding if they don't start decreasing their deficits.
I would also like to remind you that it is actually our money on the line there. If my pension funds make bad decisions, for example loan money to Greece until it defaults, there will lot less money available when I retire. So the money question isn't about some bankers or financial speculators doing some mystic attack on Greece, it is our money, and there is a big question hanging on, on can Greece and some other countries pay their debts back or not.
Regarding on your question on what idea of an union I have, my idea of an union is a union of equals, where only best is expected from them, where all do work, where all take responsibility, I some gets lost in tracks, it doesn't lead into abandonment, but one is given a chance to redeem. In case of Greece and this whole crisis I have said again and again that Greece or no other troubled country wont be thrown out of the Eurozone or the EU, there is no fear for that, but that troubled states have to work and fix their problems by themselves especially when they are self caused.
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@Jukka,
Sorry if I keep stressing you and make things sounds as if everything is your fault, my fight is really directed more against the financial system than you. However you think the way the finance system works today is perfect and you can't see anything wrong with thus so many of my comment are directed at you.
I don't have any problem with countries putting their house in order, but they should be shown solidarity. If we take Greece as an example for now (it could be any country) their new government is trying to put things in order, they need political support to get things turned around. Every one now has come to realise they will pay their debts and there will not default on their payments, however if they are forced to borrow at 3% more than Germany that makes their task of turning things around a lot harder. It is a problem not just for the government but also for business. Business will have to borrow at 3% more than a business in Germany for example and as they can't devalue the Euro to make their products cheaper makes it harder for them to compete. This is just one example where when you (or anyone says) the markets punish the government for borrowing to much, it is not true they punish the entire country.
with the above I can't see how the union can work, there must be solidarity. I know that we here in the UK are looked down somehow because we don't have the Euro and I really do wished we had it. But if there is no solidarity within the Eurozone I really will have a hard time to convince even myself that joining the Euro is worth it, let alone convince others that the Euro is a good thing!
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@ cbw # 221
I don't think I would have voted for the new EU constitution in 2005, had I given myself a chance to vote. The refusal of referenda concerning the Lisbon treaty was not democratic. So I don't think I can be considered as 100% pro-EU who applauds every bit of policy decided in Brussels.
However, in the current crisis with the Euro the focus should not be uniquely on Greece, and the fiscal situation there. The 20th century history of all PIIGS countries is rather turbulent, and helps understand why their economies are not as solid as those of the core of the EU and the Eurozone (Germany, Benelux and France). Since I know the Greek situation relatively well, having visited Greece for enough time to appreciate the pros and cons, there is no need for me to repeat the comments that, despite the turbulent Greek history and the perceived threats from their neighbours, they should put their house in order. Obviously there is sufficient knowledge about the real Greek situation in Brussels, if only because of Barroso's ties with Latsis (they were students at the LSE together, apparently).
This leaves the criticism of the behaviour of Goldman Sachs and similar 'market forces'. I am very surprised about the little differentiation people make about the 'markets'. For me, there are investments firms, some having a lot of influence such as Goldman Sachs, pension funds ("institutional investors") who go for the long term presumably, and a whole host of others, each with their own strategy. Having read this week a lot about Goldman Sachs, I must admit that I do not admire their actions, since they try to get the best of both worlds, and with practices which smack too much of using advantage of others being not as well informed as they are. True, such actions brought them the compliment of USA president Obama ("savvy bankers"), but I can measure the cost of the current fincancial crisis not only for my American friends, but also for e.g. the University of California which has to cut back on expenditure while politicians continue to bragg about a 'knowledge based society'.
As for the UK government, they want to have a lot of influence in Brussels, but are not in the Eurozone, nor in Schengen. Seems farfetched to me. Anyway, if Greece defaults, Spain and Portugal will follow, and then it is the turn of Italy and the UK, just like in 1992. Now why should I be happy about that ? I don't think the ordinary tax-payer, be it in Greece or in the USA, should pay for the folly of sophisticated bankers who play with other peoples money on highly dubious financial schemes, and, when the going is good, pocket the money, and when it goes bad, have to be bailed out. If this opinion counts as anti UK/USA, so be it, though I do not agree with such an assessment.
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175. At 10:59pm on 19 Feb 2010, jablko wrote:
" ... I know from personal experience here in Prague. Very dark eastern figures, often called the Russian Mafia, have a great influence. It is a great battle to establish law and order, the corruption is enormous...."
EUpris: There are any references throughout Europe to the Russian Mafia and to Russian Criminals. Russia is not in the"EU". If the Czech Republics arrests Russian (citizen) criminals, they should be thrown out. I have met people here who tell me they are Russian but are Estonian citizens. They seemed like nice people and I don't want to throw them out. If we were outside the "EU" I might not have let them in. I want to be outside the"EU" for many reasons, but one is so that we can throw out foreign criminals. Other countries should throw out British criminals and parasites.
The Czechs are still recovering from the USSR so they have an excuse/reason. The Italians have no such excuse. I want the UK to help other countries but not through the wasteful, worse-than-useless, megalomaniac "EU".
" ... British Aerospace ..."
EUpris: I don't think I have ever heard anything good about British Aerospace. If they are involved in corruption the the British authorities should be dealing with it, "EU" or no "EU".
" But the EU Parliament is getting more power to deal with those fellows. ..."
EUpris: I see no evidence to suggest that the"EU" or its "parliament" are capable of dealing with anything in a worthwhile way. If British Aerospace are engaged in corrupt practices in the Czech Republic, then surely the Czechs ought to be able to deal with it through their own courts ?
" ... Then there is one other co-operation that is rather a very unhealthy one: the Tories have joined up with a bunch of crooks in the EU Parliament...."
I do not know the truth of this matter and I don't vote Tory. Daniel Hannan has disputed some of these claims. The "EU-parliaments" seems to have rules which encourage these groupings. If you are not a groupie then you miss out on funds. I think they should change those rules.
" ... Ted Heath would turn in his grave if he knew..."
EUpris: Ted Heath was an arrogant liar and a traitor. He cannot spin enough.
"How can we fight those crooks if the Conservatives give them cover."
EUpris: I cannot see that the Conservatives can give them cover.
The "EU" has been no good for the UK or Greece. I doubt if it is any good for the Czech Republic.
Dobre vecer!
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To ChrisArta (226):
No problem. I have chosen to answer you because this is an interesting discussion...
First of all the interest rate that businesses and corporations pay for their loans is set by banks that loan money to them, banks themselves loan money from the ECB that loans money with the same interest rate regardless from which member state the bank comes from. The interest rate that markets price for the state, and the interest rate that markets price for a particular company are not inter-linked, it doesn't affect them.
In case of the Greek state, the interest rate that they are required to pay to get new loans, is actually correct. They are more riskier investment than Germany and that requires higher interest rates. Secondly higher interest rates actually serve a purpose of signaling to the Greek state that they are in the wrong track and if they don't redeem themselves then financing will be cut. And that is the only right thing to do in a situation like that.
In case of the Greek businesses, as I noted before they pay the same from the money as everybody else. However if they are uncompetitive then they should either lower wages, cut headcount or move some parts of their activities to a better location that makes them competitive again. That is what all corporations do and what they should be doing, if you can cut down headcount then you have glut that needs to be removed. While especially layoffs and moving of activities can for a moment hit the economy, in longer term it will make the economy work more efficiently.
In case of the financial system, it isn't perfect, but it is far best than anything that has been tried and presented to this day. Our economic and financial system is actually a distributed self-correcting and self-learning global information system that resolves where and how resources should be allocated and where and how not.
Criticizing how this system works is part of its self-correcting and self-learning nature, but demanding to scrap it all together is irresponsible act to do. If you are thinking that this system needs to be replaced, then you really start to need to think on how on earth you can move huge amounts of information from every single living person, how to value, how to process it and how to make it self-correcting and self-learning.
Again, in case of the union, the has solidarity, Greece is still both Eurozone and EU member, they have workable position, they just have to cut, cut and cut until they cut all cutable and then cut some more. The situation that the Greeks have is much better than we and the Swed's had in the beginning of 90s, we cut a lot, but still managed to retain our welfare states. If there is will, there is always a way.
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When reading an article like this, I can only say cut, cut and cut again.
http://www.foreignpolicy.com/articles/2010/02/19/greek_disease
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#229,
Small correction, companies and house holds will not be able to borrow at interest rates less than their government, on that point you will find out that you are wrong. That is why I say if Greece doesn't get political support to allow it to borrow at levels similar to Germany's they will be stupid to stay in the Euro. As stupid as Latvia's policy to try and get into the Euro. In my view if those countries plus other's don't enjoy the same benefits from the Euro as Germany's companies do, they are better off outside it. The way the Euro works now is enabling German companies to compate without the fear that other countirs cab devalue their currency to make their product more competetive.
If what you suggest was to be followed through, ie. cut, cut & companies leave the countries, then you'd end up with a whole lot of Greeks, Spaniards, Italians, Irish, etc. shifting north to follow the work, that most likely will take place no matter what.
I don't disagree one bit that Greece and every other country has to reduce their deficits but it has to be done in a controled way and the Eurozone has to act with one voice and to give a single message, not the multitude of messages that come out of it today. Again here we see two different things, you for example can spot union & solidarity, I can spot a whole lot a people runing around with no coordination and everyone says what ever he or she feels. Regarding solidarity I don't spot any, I can only see finger pointing.
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For a sec. Whole USSR abroad calls themselves "Russian". 15 countries.
To not go into details :o) to confuse foreigners with their "Western Ukraine", Transdniestria-Moldova, Belorussia-Northern Kazakhstan etc.
Anyway you don't know where is what, say, 70% of the time :o))))
But here at home - I mean in respective countries, all are awful nationalistic and very well remember who they are. "Russian" - it's just a general name for foreign consumption.
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#230,
@Jukka,
Very good article did you read all three pages? The message I got out of it was that they are trying to fix things, and what I've been saying all along that they need politcal support from the Eurozone now. Even yesterday on interview their primemister gave to the BBC, he said that they don't want financial support they just want political backing be able to borrow at normal rates to reform their systems.
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Within the Eurozone there is the same degree of difference than in USA, Brazil, China, India or any other macro-state. So putting the finger on the economical disparities within the Eurozone in order to justify the inner weakness of the Euro, is a baseless stance, with no real reference. The Euro will emerge stronger afte the Greek crisis. BTW, the "Anglo-saxon conspirative theory" against the common currency is certainly very convincing, gentlemen, no offence meant.
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This comment was removed because the moderators found it broke the House Rules.
Yo Alice
The Tunguska event. Was it an asteroid as most Americans say or was it a comet as most Russians say?
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To Cool_brush_work - 221
"--. hankering for the 'illusory' perfect EU..."
"EU IS GOOD; ANYTHING ELSE IS BAD"
YES and NO
Yes as far as Spain is concerned. Spain joined as soon as it could, in 1985. It has taken full advantage of the opportunities and financial assistance offered. In return it has given full support and commitment. Economically the account with the EU is now in balance. As much is paid in as is received.
No one is claiming the EU is, or ever could be, 'perfect' but for myself and I would say, for the vast majority of the Spanish, it is by far the best that is on offer. Do you suggest we go back to the past?
When I was born in 1934, Spain had a republican government that was little short of anarchy. In 1936 the Civil War broke out. In three years 650,000 died and 500,000 were driven into permanent exile. In 1939 General Franco became dictator. A dictorship that lasted for 36 years until his death in 1975 and during which Spain was poor, backward and hungry!
Should we go back to individual nation states for the rest of the world, not least the Americans, to pick off? I would give 10 years before war broke out between at least two of them.
No, I am not anti-British. I am very proud of being a Londoner and living in the London suburbs when 30,000 Londoneres were killed amidst distraction and injury.
The present state of my native land makes me sad. In my view, over centralized, beaurocratic and grossly under invested. Try flying from Heathrow to Barcelona for a weekend. I think you will see what I mean.
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MaudDib,
"an asteroid or a comet?".
Good question. To be or not to be. Hamlet - prince of Denmark. Dane Gold!
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@ Marcus idioticus:
As we are exporting more goods than we import your comment about nobody outside europe accepting the euro just doesn't make any sense at all as there always will be demand for euros to pay for the goods produced here.
I heard today that the Chinese are considering releasing the dollar reserves (which are a couple of trillions) back on the free market to thank Obama for inviting the Dalai Lama. If they pull that through (which I am not really convinced off - but hey they are Chinese, it could be something about losing their face which we don't understand in the Western world that makes them against all logic really do it) I guess we will get 2 or 3 dollars per Euro very soon.
As long as the Euro stays above par with the Dollar, I am not worried at all that it could bust, as it is right now simply overrated.
For the discussion here about the difference for Germans paying for East Germany rather than for Greece. Hardly anyone there did choose to live in a completely broke system and when they first protested they were faced by russian army tanks. So they really had few options. The Greek however can each couple of years vote their government and they keep voting for ones that live on corruption and even lie to the EU. Plus as long as in Greece the retirement age is at about 58 while we have 67 in Germany, I don't understand any of their protests in the first place any way. There is still a lot of room for the government in Athen to save money and to still provide far more public wealth than most other Euro nations do.
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#239 Seraphim85,
Lets leave the Greeks out as they don't qualify for German solidarity because they were not occupied by the Soviet Union.
Would west Germany fund/support the Latvians, Hungarians etc. to the same tune that it support former east Germany? After all they suffered just as much as former east Germany under Soviet rule?
Or is Freeborn John correct in saying the EU is only a union just in name, there is no demos for it and each state will not support anyone else outside its national boarders. Please don't give the argument about largest net contributor etc. I know all that here in the UK we do that also.
The point I'm trying to make is that we also give money to Africa but we don't call that "union" so giving money to develop a country in nothing new and EU explicit, happens at all levels it don't have to be the EU. Do you think therefore the Eurozone is a union or should we give it another name? Because at the moment it is not a union. And as the blog asks, what is the problem with the Euro? The answer is at the moment there is no unity in the Eurozone.
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by Russian tanks." By USSR tanks, alright? :o))))
We were governed, and I'd say kind of hijacked, back then by Saakashvili, that is, I am sorry, by Jugashvili :o))))
Or may be by the over-educated Ukrainian patriot, Khruschev.
Nevermind :o)))
But the tanks were Russian-made, no denial.
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Sara Phlegm
It would be interesting to see the Chinese sell off their US dollars and their US Treasury debt. I don't know how far they could push it down though given the total number of dollars in circulation and how much they hold. As the Euro rises, keep in mind that oil rose to $150 a barrel before the bottom fell out of it. A lower dollar makes the US more competitive against goods sold in other currencies and foreign imports more expensive in US domestic market. In a recession that would be welcome news. I have already said the US should devalue its currency unilaterally by printing and distributing oceans of them to their own citizens, five to ten trillion dollars while at the same time ditching the WTO and raising high import tarriffs. This would allow Americans and the government to pay off their debts with these new cheap dollars and stimulate domestic investment. Would other countries lend as readily to the US government? Maybe not which would force the US government to cut itself down to a reasonable size which is something many of us want badly anyway. It has grown far too big and expensive. The inflation, devaluation, payback of debt, and protectonism in the US would rapid realign the US economy to grow and regain the even greater pre-eminence it used to enjoy at the expense of foreign countries, especially Europe. Pullout of all US forces in Europe would be one good cost cutting measure. But first it should wait until European bankruptcy takes its full toll. Germany will not be spared, it will not escape the disaster that is about to befall the Euro.
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#241,
Don't stress WA, I believe what he was trying to say was "It is one to transfer funds to former East Germany, because they are Germans". Our own Freeborn John says the same thing for us here in the UK, "It's ok to transfer fund from London to Yorkshire, because they were occupied by the Vickings :))" The only difference is that Freeborn John, doesn't pretend to like the EU or thing the EU is a good thing. He has clarity of thought, he may be wrong, but you can't accuse him for not knowing what he wants:))
I think this Euro crisis is a good thing for the Euro in a few years time everyone will say "thanks god we had that crisis, we put in place mechanisms to deal with it in the future and everyone knows what a union means now"
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#239
'Plus as long as in Greece the retirement age is at about 58 while we have 67 in Germany, I don't understand any of their protests in the first place any way'
Plus the fact that the life expectancy in Greece is one of the highest in the world ( 19th out of 195 – better than Germany, UK or USA) so the Greeks would enjoy longer retirements than most, even if they retired at the same age as everybody else!
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Sorry Alice of course there were no Russian but Soviet tanks in those days ;-)
Well I wasn't there to see wheather it said "made in Russia" or "made in Ukraine" on the license plate at very least (probably neither even).
@ Chrisarta: Your question seems weird to me. On the one hand you ask whether we would pay for Hungarians and Latvians and in the next sentence you admit that we already do so. However I was googling a bit for a definition of the word "union" which seems to be your problem. As there are various different kinds of Unions it is even hard to find a general definition for the word. I at least couldn't find a single one saying that in a Union national states are supposed to bail others out to fulfill the requirement of being a "Union".
On the other hand I have never heard of single states within the US (let's say Nevada) paying the bills if others who can't (let's say California) when Mr Schwarzenegger announced the cutting of costs in the public sector there. Are you now saying that the UNITED states of America are no UNION because of that?
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Marcus you are still a strange one aren't you?
"A lower dollar makes the US more competitive against goods sold in other currencies and foreign imports more expensive in US domestic market. In a recession that would be welcome news."
When I said the exact same thing for Europe that a weaker euro is better than a strong one you called me stupid and now in a comparable situation for the US you are almost using my very own words except for replacing "Europe" by "US" and "Euro" by "Dollar". So either you are stupid yourself or we are both right, but if we are both talking about the same car in the alley and both of us say "it is a black car" then it is simply not possible that only one of us is right...
(On a sidenote what you suggest printing huge sums of Dollars won't work because then all the rich people who control the US goverment (like they do in many countries) would loose too much of their wealth which is parked in Dollars. In general this however would be a very good way in strengthening competivness and while moving value from the (too) rich to the (too) poor every once in a while to give every citizen in the US or EU 1000(0) Dollar or Euro freshly printed. We might get some recession from it but so what? doesn't seem too unfair for anyone for me as everyone gets the same share. Just that we in the EU have little problem with the ECB not being allowed to print new money ^^)
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WA;
...vili;, ...vili, ...vili
veni! vidi! vici!
Wee Willie Winkie runs through the town,
Upstairs and downstairs in his nightgown,
Tapping at the window and crying through the lock,
Are all the children in their beds, it's past eight o'clock?
Tomorrow at bedtime, I'll tell you the one about Gorby, Gorby, Gorby
:-)
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Thank you Chris Arta, I see the argument going here, only indeed somewhat stressed :o)))) by, you know, what
Read the front page of Olympics' official website, where Canadian dance pair says "we and Americans now represent the new world system in figure-skating and this is the way it should be."
The next sentence the author reminds all that this is going to be the first Russia's Olympic games in figure skating without gold "in 40 years with the exception of 2 Games".
To explain, what the Canadians-Americans mean, by the "new system".
How un-modest, of the Canadians. :o))))
I'd say - 39 years more - and then Canada-America can herald "the new system" :o)))))
Anyway it's same painful as ? as if Dutch monopoly of ? ordinary speedy frozen canal skating was interrupted. Nation's patented.
If Russians are beyond themselves now - imagine what would the Dutch say, in such a case.
What is Canada's favourite sport, anybody knows?
What would hurt with Canada
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Mavrelius, darling, what's your favourite sport?
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Aaah. I am silly. Under-sleep. Ice-hockey! with Canada.
Now now now.
:o)))))
Germany? Germany! Anybody here? Seraphim, no? No.
Mathiasen - but then it's fifty-fifty Mathiasen is Danish.
Germany anybody! Do Russians a favour - may be you can hold yourself, not win over Canada this time, please ? :o)))))
Leave them to us!
What's a Germany-Russia semi-final in hockey, after all, I mean Germany-Russia, Russia-Germany, Germany-Russia what's new :o))))
We don't want that medal. Well, we want, but, how to say :o)))) slightly above "luge"... :o))) or what's there? ah "skeleton" and snow-boarding.
OK, more than snow-boarding. :o)))))
But less than figure-skating.
But Russia-Canada semi-final will be dear to see. We've read so many intersting things about ourselves. So happy with Vancouver judging.
I think it'll be something like Jagr-Ovechkin encounter last night :o)))) in the Czech-Russia game. In that pretty style. :o)))) So much accummulated to say to each other.
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Wonttellyathen;
"I don't understand any of their (Greeks) protests in the first place any way'"
It's very simple, they don't want the party to end. They don't want you to stop picking up the tab for it since they can't afford it themselves. They're broke. You guys are no fun at all.
It's you I don't understand. Your government was one of the chief architects of the monstrosity that will suck every last Euro you've got to invent what you and it and the rest of Europe thought would be a superstate with an economy and population larger and moe powerful than the US. And you went along with it without critical thought or protest just the way your grandparents and greatgrandparents went along with Hitler and their parents before them went along with the Kaiser. Now when the whole thing has blown up the way the previous schemes did and it comes time to pay for your folly, you act like it's a complete surprise.
Has it ever occurred to you or your fellow Germans that had they won either of the two world wars they started that in the end, the superstate it wanted to build would have ended up the same way for the same reason as the EU only much faster becuase there would have been nobody from the outside to help pay to rebuild war ravaged Europe?
For all your philosophers, mathematicians, logicians, historians, and other men of letters, with all your wise guys you Europeans aren't very smart. This time you're on your own. Let's see how you handle it now that you finally got what you'd always wished for in the past. I've been noticing a lot of finger pointing from your side of the pond. What comes after that?
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WA;
"Mavrelius, darling, what's your favourite sport?"
WA, I prefer "indoor sports." I find being a participant far more rewarding than being a mere observer. Fortunately I am still young enough to be able to play :-)
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Sara Phlegm;
I have explained time and again on this blog site, on Stephanomics, and on Mark Mardell's among others why it would be very dangerous for the EU to devalue the Euro before the US makes the first move by devaluing the US dollar. After that happens, it would be very dangerous for almost anyone else except China and Japan not to. I'm not going through it again. Look up my previous postings, I'm not going to do the research of BBC files for you either.
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I think I was mentioning, just recently, that "never say never again". Russia and Europe might need to unite. Sooner than either side planned to :o))))
Thank you Mavrelius for veni-vedi-vici, initiating.
Plushenko is going to protest the "Canada-America" judgement and "the system". Himself. He doesn't have a pack of lawers behind him, in the national figure-skating association. All know Russian functionaries eat caviar and spend billions on themselves, insted of supporting their athelets. The athelets they sell down the river.
Our skaters go on ice armed with the skates only.
___________________________________
I've posted a slogan in the Russian sports' blog.
St. Pete - for Pluschenko. Russia - for St. Pete.
In 2 minutes got an entry from Sweden - "Sweden - for Russia".
:o))))
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Chris Arta and Seraphim, that was to the union matter you are discussing.
Don't know which union is correct theoretically, let's do it practically :o))) and then we can form it up by papers :o)))))
Very scientifically, carefully and all :o)))) Very German, nothing against.
My idea (in the figure-skating case and ALL) is such: old fairy-tale how to plug out an over-grown turnip. (size a tank :o)
Comes dedushka - pulls-pulls - cannot pull it out of the ground.
Comes babushka, grasps at dedushka - they are pulling-pulling - can't pull the turnip out. :o))))
Comes granddaughterm snatches at babushka who holds at dedushka, the team is pulling-pulling - can't pull the turnip out.
Comes a doggie fluffy, snatches at the granddaughter - etc. You got the idea.
Finally comes a tiny mouse, snatches at the fluffy (one can insert a kittie into the chain as well :o) - and they plug the (golden :o) Turnip out.
That's the system. IMO. Old proven method. For complex issues.
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Sweet Mavrelius, "let's see how Europe will manage it on its own".
Well, if to imagine for a sec, that Russia doesn't plan to attack them, and, moreover, didn't :o))))) - what exactly the difference?
Your 6 and a half soldiers left over in Europe? When you take them out no one will notice the difference.
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252.
Yes. right.
I mean, I thought, that's British speciality :o)))))
just some personal eh well nevermind :o))))
but. of course. Of course!. Continue training, by all means.
I also thought that these Olympics is a one-off mistake, on the US part.
Once in 39 years and all.
Yankee go home :o)))) and all. It's cold outside, and slippery :o)))
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To ChrisArta (231):
I don't know where you come up with the thing that business and house hold interest rates of some Eurozone country are somehow tied to to that countries states interest rates.
The Eurozone is almost the same the USA regarding working of the currency union. In the USA the Fed loans money to banks, their base borrowing and deposit rates are the same regardless on in which state the bank operates and what is the interest rate that markets loan to their state. That is exactly the same thing in the Eurozone. The ECB loans money to Eurozone banks directly, their base borrowing rate dictates what is the cheapest available money in the Eurozone. Now banks loan their money to other banks, businesses and individuals based on the rate of the Euribor (Euro Interbank Offered Rate). Loans that I have they consist from the Euribor and from the banks markup, there is no added Finnish state markup, it is just that.
http://en.wikipedia.org/wiki/Euro_Interbank_Offered_Rate
In case of the interest rates and differences between Eurozone states, that is normal course the market and perfect way for the markets to measure risk and value in a country specific level. If all states could be able to borrow at the same interest rates, then what would be the market mechanism that tells that A) you borrowing too much too fast, B) you need to stop borrowing now. The current system works, it rewards states that maintain the credit worthiness and punishes those who are lax or careless about running their finances.
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"Well, if to imagine for a sec, that Russia doesn't plan to attack them, and, moreover, didn't :o))))) - what exactly the difference?"
Russia doesn't have to. By creating the EU and the Euro, the Europeans have attacked each other and far more effectively than Russia could have possibly done with mere military weapons. And in this kind of attack, the US doesn't have to get involved by coming to their defense :-)
"Your 6 and a half soldiers left over in Europe? When you take them out no one will notice the difference."
There may be only six and a half of them but they are costing us billions of dollars...just like those Russian functionaries that eat caviar and spend billions on themselves you mentioned.
":o)))))"
A little less vodka and that swollen red nose would go down and turn white again. Less starch and fat and a little more exercise and those double chins would disappear. :-) Instead of flying over the snow on an iron mortar to that hut on fowl's legs with the clock in its stomach, try shoveling the walkway out to the street :-)
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#245,
No I'm saying they are a "union" because of that. i.e. Their fed ensures that California can borrow from someone :)) Also, I would be in shock to find out that someone from Texas would complain if their fed ensured California could borrow without having to go IMF, bacuase Californians surf more than Texans!
So, no in my view the US has a true union the Eurozone has a dogs breakfast that it calls a union!
@258,
Jukka, I can no see how I can be wrong in saying that business & households in Greece will have to pay as high interest rate (if not higher) us their country has to pay. You, yourself gave the answer, think about it. Lets say CreditSwiss lends, Bank xyz of Greece 100 Euro, now Bank xyz of Greece can lend that money to person "a" at 3% a year or to the Greek government at 6% a year, it will be the government so person "a" to borrow money from bank xyz will have to pay the same as their government 6%. That puts that person at a disadvantage for been in the Euro, their have to pay high interest rates and they can't devalue their currency to make their products compatetive. The same goes to savers of cause I guess. I have not checked for interest rates but I'm sure interest rates in Greece will be higher than in Germany (or here in the UK, but we are not in the Euro anyhow). So, what you described above is just the theory and as we know with things economic they only work in theory never in practice. And althought the ECB maybe similar to the US, it is not the same and that is a weak point not an advantage.
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First you facilitate extravagant spending then you demand from user (customer) austerity measures. I call it engineered speculation. It does not matter when a small fry individually speculates on the stock market.
When the gurus who rendered, for big fees, advice to the government of Greece then I become suspicious of overall motives for action against Greece.
Why most of those "advisors' with exception of a few, still thrive in the business of "advising" others, Greece will be facing deflated values of anything they own; effects of crafty engineering by outsiders.
Few of trips I took to Greece recently made me wonder if I should not invest in some property there. Wonderful vistas, serene places, rich past history, popular tourist vacation spots to mention some of Greece attractiveness.
Thanks to engineered speculative motions of yesterday I may be able to acquire some property at speculatively low price! Maybe?
Some blame heads-up-I-win tails-up-you-lose game on Anglo-Saxons. If you call yourself an idiot you can blame your failures on Anglo-Saxons but only then.
Normally you ought to know what you can and what you must not accept from others(e.i.Anglo-Saxons advisors and money lending operators). Greeks are solely to blame. Recent Anglo-Saxon experience within banking system though has shown us something interesting. Frivolous banks instead of failing as a result of its' inept, careless operations received substantial amount of money to continue. What strange is that their managers instead of receiving pink slips were retained and actually were given substantial award/bonus money. ????
If we are to follow the Anglo-Saxon experience then I suppose we ought not to ask Greece for austerity measures but give its leaders fat bonuses for great leadership.
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To ChrisArta (260):
You make the mistake on thinking that it is less risk free to loan to a state than to a individual or an enterprise in that said country. If an individual or a corporate loans money from the bank, they usually give an collateral that either covers part of, most of or fully the loan that the person is getting. Governments on the other hand don't give any collateral, they give their word that they will pay. However there is nothing stopping government from defaulting or restructuring their debt, in essence paying only some of it. If you are a bank, it is much better option to find a good individual and a business customers and loan to them, even with lower interest rate. I should also add that there is only so much money that a bank can invest into a one place, before putting itself into a serious risk on going bankrupt, diversity is the key for survival.
You also again forget that wealthy individuals, SME's and large corporations can organize their financing internationally. There is nothing to stop for example a Greek corporation using German or France banks to do their business. Actually after the introduction and large scale move to the SEPA system this spring, Eurozone will be one domestic banking area, all transactions between banks are domestic. If there is need for money and a good plan to use, there is always financing for it.
In regards of economic theories, different models try to describe the economic reality as best as they can. Neoclassical, Keynesian, Chigaco, Austrian, etc.. tell a tale about the economy from different view points, valuations and ideas about society and human nature, not one of them tell the absolute truth, but they tell apart truth. By using all these tools together and selecting best ideas of them, one can start to have some light on what is happening and what is going to happen.
In regards of the ECB. ECB is lot better than the Fed or the Bank of England because it is free from political pressure, there are no artificially too low interest rates to buy political will, there is no Quantitative Easing or other versions of printing money, there is just one thing, preserving the value of Euro as an currency of exchange, in essence fighting inflation, so that I nor anybody else have to worry their night on how many times prices have doubled this morning.
P.S. There is nobody to guarantee that California has enough dollars for example to pay their bills or salaries of their employees.
http://en.wikipedia.org/wiki/IOU
"Also referred to as "IOUs" by the U.S. state of California, the term "Registered Warrants", which specify a future payment date, is meant to differentiate these IOUs from regular, or “normal” payroll warrants which permit the holder to exchange their warrant for cash immediately. For both types of warrants, redeeming them may be delayed until funds are available. Because of this uncertainty, warrants like IOUs are not negotiable instruments. Registered Warrants were issued in July 2009 due to the inability of the state of California to meet its financial obligations. They are issued as payment to private businesses, local governments, taxpayers receiving income tax refunds, and owners of unclaimed money."
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Ha ha ha :))
Maybe Nik and his geopolitical games is not to far off the mark if this article and what the generals are accused of is correct
http://news.bbc.co.uk/2/hi/europe/8528512.stm
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Now with the euro facing its severest test, I don’t see conspiracy.
I see credit default swaps and derivatives.
In a direct way, "Anglo-Saxon" speculators, Anglo-Saxon banks and hedge funds are behind the euro crisis, but not in the severe, most direct, most greedy way that CDS and derivatives are the fault of United States of America and its irresponsible, unregulated derivative trading.
God forbid, the IMF gets involved in Greece. Its dire rules ands regulations will destroy the Greek economy in two swift blows: 1. Privatization 2. Reduction of social spending.
The markets are giving the euro a severe stress test because there are derivative investments (asset bubbles) throughout European Countries, not just Greece, but Spain, the UK and Portugal and...
The euro slid close to a nine-month low against the dollar yesterday because investors became increasingly nervous over reports that Greece USED DERIVATIVES TO DISGUISE THE SIZE OF ITS DEBT WHEN IT JOINED THE EUROPEAN UNION. Really? Did it knowingly do that? Has the UK done that?
As eurozone ministers met in Brussels last night for talks over the Greek debt crisis, the EU asked Greek authorities to explain suggestions that they had used derivative trades with AMERCIAN INVESTMENT BANKS to allow them to meet the stringent criteria for joining the euro in 2001. The New York Times reported that one contract in 2001 involved Greece selling forward future lottery receipts and airport landing fees, in exchange for cash so that Greek debts could be written down.
If there is guilt here. It is with Greece, but mostly with American UNregulation, DISregulation of default swaps and derivatives.
Credit default swaps, or CDS, are insurance against the risk of default on a debt. The writer/seller of these swaps receives regular payments from the buyer, and in turn assumes the risk that the underlying debt will not be repaid. In the event of default, the seller of the contract has to reimburse the buyer for the unpaid interest and the principal of the debt. Credit default swaps are non-standardized private contracts between the buyer and the seller. They are not traded on any exchange, and they are absolutely, totally UNREGULATED BY ANY GOVERNMENT.
The International Swaps and Derivatives Association (ISAD) publishes guidelines and general rules that can be used to write CDS contracts.
The International Swaps and Derivatives Association estimates the total notional amount of outstanding credit default swaps is about (Are you ready?) - $62.2 trillion, making these contracts the most widely traded credit derivative product. Due to the lack of regulation in the market for CDS, these instruments were/are underwritten by almost any financial institution. Large insurers such as American International Group (AIG) and Ambac Financial Group (ABK) have been major players in the market. However, such contacts are also written by hedge funds, mutual funds and banks such as Merrill Lynch (MER), Citigroup (C) and Morgan Stanley (MS).
Sovereign debt is one of the most commonly used assets. This includes
Greece, but also Italy, Spain and General Electric Company - with the later three being the TOP THREE entities in term of net notional amount.
So, tell me: Is Greece the real problem, or does the real problem lie elsewhere, and what does the EU intend to do about it?
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#262
OK, jukka just so that I can support my theory after some quick google research here is what interest rates a Greek. I haven't managed to checked any German ones yet, but maybe you can dig up something from Finland and tell me if they are similar more or less
[Unsuitable/Broken URL removed by Moderator]
My guess from looking at those numbers is that they are higher!
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Mavrelus @259 "try shoveling the walkway out to the street"
.
(I am sorry, I know it's not about money :o)))) or Greece. as if this was stopping me ever :o))) but I've got to reply. because with those damn Olympics I might lose more important eh well qualifications. accomplishments :o))))))
Anyway MA I don't want to say anything
I've got for you links to Russian winter sports. one typical like winter roof jumping I've posted before
http://www.youtube.com/watch?v=EksaafuZhl0
Another good one is walrus-ing
http://www.youtube.com/watch?v=V13ARK9g578
Then it's of course snow-fortress taking by storm
http://www.youtube.com/watch?v=-bKpmxjAxwE
And general rolling around and jumping over knives. Well, that's cossacks' sub-division of Russians.
http://www.youtube.com/watch?v=z0WlNrqs-dY
Simple, un-pretentious entertainment.
I'd go for a snow fortress, I think. Of all of the above :o)))))
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WA;
Jumping off roofs, over knives, that is childs play here. Now Evel Knievel was one of America's most famous daredevils but hardly the only one. I recall his attempt to fly over the snake river canyon in a home made rocket quite clearly.
http://www.youtube.com/watch?v=llzIVDbvSAc
How about that sport?
Want to try the Grand Canyon Skywalk for yourself? I recommend staying sober if you do.
http://www.youtube.com/watch?v=BvzlZuWrJNw
And Evel jumped over 14 Grayhound busses;
http://www.youtube.com/watch?v=aXVlEAovgsw
Why some people go to the beach in Hawaii;
http://www.youtube.com/watch?v=OB5c39PZFQ4
http://www.youtube.com/watch?v=Zk9nQE7sisk
jumping for joy;
http://www.youtube.com/watch?v=4vscnMjrgco
And finally something safe back near home;
http://www.youtube.com/watch?v=5GjQOz4hY7w
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5:00 am. Organisers of the figure skating schedule!
The country, which is located in the other 11 times zones would like to note, that...
:o)))))
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It's infectious WA. Tourists like taking chances here too;
http://www.youtube.com/watch?v=6ddpV1GvF7E
110 stories up in the air, no net. Nobody else ever did it, nobody else ever will.
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And we thought we are un-lucky when ? forgot the name. A Rust? a German guy flew over into our Red Square.
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This comment has been referred for further consideration. Explain
:o)
What should be done that Russia wins winter Olympics?
For that, into the competitions' programme should be added new disciplines, namely:
- "Litre-bal" in the frost.
- Pulling of the rope on ice.
- Walrusing Morning After - who will sit longer in the hole in the river ice after 2 litres and won't kick the bucket :o)))))
- Tossing of mobile phones into snow with the aim of hitting the most distant snow pile and at that drown the telephone to the waste basket condition :o))))
- Dog's sleigh chase (with pitt-bull-terriers)
- Fugure- :o)))) un-printable :o))) in the frost :o))))
Masha, I asked you! As your coach! Not to eh .. well To behave yourself! Mind the regime! All on time! This is Olympics!
- And what have I done I done nothing.
- Nothing! And who were those two men who I saw going out of your hotel room, at 6 am in the morning?!
- Two men?
- Yes!
- Well, they were... They were Doping Officers!
- Two?!
- One was taking test A, and the other - test B!
:o))))))))
After clashing with the half-defenser of out team the attacking ? man demonstrated such pains of torture that children younger than 18 were asked to be taken out of the arena! :o))))
Having thoughtfully started at the cancelled Winter-Summer time, orienting by the Moscow time zone, having checked themselves by the calendar, our sportsmen not only came to the Finish first, without meeting any competitors, but were the only ones who ran at all in that time and in that place. :o)))
Grandad, and is it true that you lived at that time when our Olympic team was still getting some medals?
- True, my little one, but the last time this had happened was many many years ago, at the lucky for us Vancouver Games :o)))))
Olympic Games in Peking. Chinese team took all the medals.
Olympic Games in Vancouver. American and Canadian teams are leading with a huge gap.
But then in Sochi they will all cry! :o))))
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WA;
"What should be done that Russia wins winter Olympics?"
Simple. Russia has 12,000 H-bombs. Go underground, use those H-bombs to kill everyone else in the world, and then when they don't show up for the games and Russia does, they will win by default. There's also the more targeted approach, ricin or polonium, take your pick.
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Congratulations, Canada.
Tarasova commenting for us, said - "Divine".
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Mavrelius, ugh.
How heavy you are.
No flair, whatsoever :o))))))
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Well, OK. At least, as a reliable tank, you stay the morning (after :o))) throughout.
Thanks.
Finally, one fair judging. I don't believe it - in Vancouver?
:o)))))
Tatiana said this time the first time - neither an American nor a Russian and nor ? neither? nor. the Canadian judge, in their judges' team. "We have sorted it out, for the first time :o))) without own judges" :o))))
May be that's why.
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And thanks, Mavrelius, for the funny new table of results :o))))))
Only due to your American method Russia looks like OK, I'll skip what we look like. :o)))) Like, as if, with "medals".
In USSR times, even I remember, bronze and silver were not medals. But like "What?!"
Some sportsmen were nostalgically remembering now that no one even congratulated them once, :o))) just for the hell of it :o))) for bronze and silver. Was considered in-decent , to remind :o))) an extra time :o))) about their misfortune :o))))
Tempora them mutamur and oh all.
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WA, why must you win all the time? I still say you are far too preoccupied with skating. OK, no H-bombs, no polonium, no ricin, no fun, do it the hard way. The KGB will have to think of something else. Psychological warfare like they used in the chess matches before Fischer and what Fischer used against Spassky. Do something to keep the skaters from other teams awake all night. Parapsychological warfare using ESP (extra sensory perception.) Prostitutes to lure the male skaters and drug them the night before the competition. Since being better is a matter of capricious opinion among the judges and on any given day one skater might be better than another, the strategy of just being best leaves too much to chance. Whatever the best strategy is, it should be at least very diabolical. That's where the KGB shines best. They have plenty of time to come up with ingenious new ideas.
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Re264: Bluesberry, some nice questioning there. For the record, the case of Greece is not the case of Portugal or Ireland no matter if they are all in the category of small countries that did not follow a normal path of development. Ireland tried to do it in a very accelerated manner, it backlashed, Portugal cannot attract a lot of investments being on the edge of Europe with a large Spain next to it. And Greece? Well Greece when it enterred the EU it was all alone away and with no land frontiers with any other EU country, an island of stability and democracy having to the north 3 communist countries one of them Albania having one of the most totalitarian regimes in the world (that kept the country largely to the 19th century), to the east a fascist Turkey threatening war and with no links with its natural trading partners, i.e. the Middle East (war and chaos) and Russia (communists). It was bound not to go very far. When communism fell, fortunes of Greece could change but then Balkan wars and the continuing animosity of US to the idea of Russian descending to the Mediterranean stopped it - and continue to try to contain it I do not know for how long.
You only need to take into account the way Greece enterred the EU.
1) In Europe they said "The entrance of Greece is not at all on the basis of its economy which is far from the EU standards. It is purely political and historic (political+historic = geopolitical of course, nobody would take in Greece just for its marbles).
2) In Greece they said "Our entrance in the EU may guarantee us high levels of security against Turkey, after all that NATO betrayal in Cyprus and Aegean".
Imagine that Greeks in late 70s, very early 80s were really wary of EU. They were not at all sure that this would be good for their economy. They were not at all sure that it was the right thing to give part of their financial sovereignty. But they accepted it mainly on the security basis. And when the packets of "sardines" started falling, then they thought "hey, it is not bad afterall to be in the EU, they give free money". Of course, by mid-80s/late-80s the 1st EU development packet had been eaten at 40 to 60% by sharks without any real development taking place - quite he opposite, Greece was already in a phase of complete dis-industrialisation, making it even more easy for the sharks to eat-up all the money and convert it to Mercedes, Porches and big Swiss bank accounts. And while the 30% of the population was partying, the 70% saw its fortuned little by little shrink. Note that this 30-70% division - in contrast to other countries where it is strictly social-class-driven - in Greece is not so much social-driven i.e. in the 30% you will find many middle and even lower class people, i.e. people that live and revolve around political parties while in the 70% you will find rich (or... previously rich) industrialists and producers whose interests were hit by all that lack of interest for real development that followed Greece's entry in the EU.
The whole EU-Greece issue had never been financial. Finance is just a parameter in the whole picture. But simply put, EU was in full knowledge of everything that was and is going on in Greece. Even now, if they make all that fuss about Greece and its deficit it is not of course about worrying about one of the smallest EU economies (which they can sort out in no time if they want, easier than sorting out their big banks, like they did last year...). No. It is because they know that if Greece is under attack now (and not 5 or 10 years earlier - while having equally bad economy and with no visibility in the horizon), they know that it is the EU under attack. For Greeks, the biggest question is the "why now"? Why not earlier. They are most amazed that this sick situation could go on till now.
My questioning is that "now" is not accidental and comes only after 1,5 year after the previous government (one that I rate as overall failed) did 2 interesting things : 1 is the signature with Russians for the gaz pipeline that cancels the US pipeline through Turkey, the other is the strategic deal with Chinese to make Greece a main point of entry of Chinese products in EU. 2 huge deals that alone can do a lot for the Greek economy and which are currently being cancelled by the US-passport-holder Papandreou-led current government - the one that could measure in 2 days after it rose to power the real deficit (the deficit that EU could not measure in 10-15 years!).
Amusing!
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To EUprisoner re comment at 228
Thank you for taking an interest. With regard to BAE, the news is that the Austrian authorities are investigating the middleman in this corruption affair. He is an Austrian citizen with a "pad" in Scotland as it transpires. The Czech authorities' ability to investigate anything is extremely limited, one has to be grateful for small mercies from abroad and indeed the EU.
For better apreciation I have picked out one case to demonstrate our frustations. A local music society with international connection had been the owners of a well known building in Prague. The finally were co-erced to hand it over to the state in 1986 or 87! In 1991 they started a legal battle that would take 18 years to have it returned to them. After going through several courts it ended up with the socalled Constitutional Court who decided on 14.7.2004 in favour of the society, this decision did not allow any appeal, as was clearly spelled out. However such decision has still to be implemented by a regional high court, a formality normally. It took almost 5 years for this court to do this. This shows that the "networks" of the former criminal regime are still active. A known agent from the former regime by the name of Musikar (this can be checked by anybody) got his hands on it in 90 or 91 and had been given lots of handouts over the years from the public purse via a local authority which happens to be run by someone who is known to be extremely corrupt and influential. Cases brought against him tend to disappear. He keeps for instance a very experienced assistant from the "old days" with all the contacts intact. She must be 75 by now. One of his people is in the EU Parliament and naturally her party collegues know all about the connection. After all better people were moved down the electoral list to make space for her.
The Tories should join anybody democratically elected, I have no problem with that. Bur it is a well known fact that the term "democratically elected" does not always apply these parts. Let's use the British system for a moment for ease of explanation. A constituency choses their candidate. Candidats woo their fellow party members to get the majority required. The Czech polititian when realizing that he can't get a majority he will organize a recruitment campain by his very personal helpers, equipped with sufficient cash to get new members that will nominate only him. This takes just a couple of weeks or so. These new members are referred to as ghosts, since some helpers got so desperate that they recruited from the grave yard. A journalist had spotted the odd name for which there was no living person, but a grave stone at local cementary yielded the name. Since the Tories know all this, they should perhaps explain their newly found standards to their own electorate.
As an All-European citizen from before the days of the EU, in the spirit of Winston Churchill, I see that the need for the EU is greater than ever. Also critizising it should be encouraged everywhere. It will either get better because of it or it will flaunder. My bet is on the former.
Regards
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To ChrisArta (265):
Well now the discussion turned more interesting. Let me put some figures in the table.
6 months Euribor is 0,964%.
1,864% - 6 months Euribor+marginal, housing loan
2,493% - 6 months Euribor+marginal, entrepreneurial debt
2,550% - Prime, Student debt
7,7% - Visa credit card debt
Housing loan is quote that I got from a friend of mine working in a bank. The rest come from my own latest loan statements. It should be noted that...
Housing loan...
This a quotation that would be given to your average Joe who has a work, is credit worthy and has collateral to back up the loan. The marginal 0,9% is actually very low and that is because of intense competition between banks to get customers. If you wondering why banks are competing this hard is because there are lot less credit worthy customers due to stricter requirement levels which are caused by risk aversion due to downturn. Now the banks still pay interest to their account holders so they are in a pressure to get those few possible client to be their customers.
Entrepreneurial debt comes from...
"Finnvera plc is a specialised financing company owned by the State of Finland. It provides its clients with loans, guarantees, venture capital investments and export credit guarantees."
lainhuuto
Student debt...
is backed by the Finnish state thus banks will always get their moneys no matter what. Actually as the state has much stricter conditions to those who don't pay their debts in time, banks usually advice students to take contact to them to make a better suited payment plan to avoid people loosing their credit worthiness or having to deal with the state.
Visa debt...
you can't get a Visa card if you don't have a job and the amount of credit you get is based on how much you make.
I should also add that there are few real differences that should be taken into account when comparing bank marginals...
A) Defaulting loan is impossible. In the old days if you loaned money and couldn't afford to pay it back, the loan would remain in effective as long as you would live, and what little there would be left for inheritance, all money would to paying debts. Now in the modern days this is the same case, however you can for one time in life apply for restructuring of debts where the state, creditors and you find a ground where you can be debt free in someday and pay maximal amount back.
B) Real estate is highly protected. All transactions of real estate have to be accepted by a Notary and they must be registered into an official registry where at the moment of registration they will check that other person transferring you the property is allowed to do so. Additional protection comes from mandatory usage of state allocated national id cards. Also it should be mentioned that there are no squatting laws and if a property is squatted then police will remove all illegal occupants with a force if necessary.
I make a note of this points because they protect the right of creditor and the owner thus making it more safe to loan money, as the risk is lower the bank margin can also be lower.
So what kind of interest rates did you find? The link you gave was removed.
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Well, Freeborn John, you've certainly been busy judging by your posts above.
For me though the comment below sort of sums up my feeling about the EU and Europe these days...
"There is a permanent 21-6 majority of nations in favour of the CAP because there are 6 net payers, and all the others regard the CAP as ‘free’ money. Similarly there is permanent 26-1 majority in favour of eliminating the so-called British rebate irrespective of any logical arguments for why it should exist. And there is a 26-1 majority against bailing out Greece out for the same reason.
Qualified majority voting on international redistribution is nothing more than adding up the census figures of nations who are net payers in one column and those who are net recipients in another, and this cannot tell you anything about the issue itself. If one nation’s taxpayers can be debauched to the benefit of many other nations, there will be a permanent international majority in favour of doing just that."
...'our people', 'your people', one of us, one of them.
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Yes! We've just taken gold, in girls skiing and shooting on the go. :o)
Relay something, in stages.
Mavrelius, "why Russia has to win". khm. what a strange question.
Well, in particular today - it's 23rd February, the girls had to win to make a present to men. Today in Russia is a holiday, day off, Men's Day.
When all men are congratulated and given presents :o)
So these girls, in particular, promised a present.
Using the opportunity - heartily congratulate all men in the blog! By Russian habit. You simply don't know it's your day :o), that's why don't ask for any thing :o)))
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Now now :o))) the team's table looks less awful :o)))
Look here, Mavrelius, with your perverted view of the world :o))), there in North America, you don't even know how the normal Olympic table looks like.
Germany 7 9 6 22
USA 7 8 10 25
Norway 6 3 5 14
Canada 5 4 1 10
Switzerland 5 2 7
Korea 4 4 1 9
Russia 3 3 6 12
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#281,
way way above those numbers!
http://www.nbg.gr/wps/portal/!ut/p/c0/04_SB8K8xLLM9MSSzPy8xBz9CP0os3jXIFNnSzcPIwN3UxdXAyOfQEM_cyM_g-AAA_2CbEdFAJ94Paw!/?WCM_PORTLET=PC_7_ER5C9FH208GO702LMA6OAA18U3_WCM&WCM_GLOBAL_CONTEXT=/wps/wcm/connect/NBG-en/nbg+site/retail/family%2C+employees/deposits/euro/farmers++plus
I hope they leave the above link in place if as I hope they do as it is all in English, then please click the link "current deposit & loan rates" on the right hand side column.
However as n indication they have things like:
FAST-ACCESS OPEN PERSONAL LOAN (floating rate) 13.95%
GREEN LOAN - ECB intervention rate 1% (+ 6.00% margin)
PERSONAL LOAN “STUDENT LIFE”
- floating rate 9.95%
- fixed rate 10.65%
OVERDRAFT FACILITIES
CURRENT ACCOUNT (floating) 13.00%
GO MASTERCARD / GO VISA Puchases 16.03%, Cash Withdrawals 17.53%
Deposits
ESTIA 5 PRIVILEGED (5-40 years term)
- fixed rate for 5 years - 4.90%
- floating rate for the remaining loan term - 3M Euribor
(plus fixed margin from 1.80%)
PROFESSIONALS AND SMEs WITH TURNOVER UP TO €2,500,000
OPEN BUSINESS PLAN
- floating rate as applicable to financing for working capital - 6.85%
FINANCING FOR FIXED INSTALLATIONS AND EQUIPMENT
- floating rate, as applicable to financing for fixed installations - 6.85%
FINANCING FOR WORKING CAPITAL
- floating rate - 7.50%
Surprise or not Surprise using Swiss Francs is cheaper!!!!!!!
ESTIA CHF PROTECTION - FLOATING RATE (10-30 years)
- floating rate for the first 4 years - CHF 1M-Libor
(plus fixed margin 1.80%) plus additional cost – today 0.20%)
So, theory is always better than in practice. If those business and people have to use that sort of money to finance their business they will be at a disadvantage to a Finn or German comapny at a huge cost.
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...also please note that the above rates on that .pdf document were published last week so they are not years old!
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3-4-6=13! (sorry, Holland. we didn't plan to. speedy skating.)
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To ChrisArta (285):
You should look again to the bank site you gave to me. I clicked "Housing Loans", then clicked "Current deposits and loan rates" which opened a PDF -file, from the file, in page 5 you can find "Mortgage credit non subsidized loans", now turn to page 6 to find "Floating rate" loans.
ESTIA PRIVILEGED (1-40 years term)
floating rate for the remaining loan term 3M Euribor
-(plus fixed margin from 1.80%)
That is the closest loan type to my quoted housing loan, difference being mine being 6 months Euribor and the Greek bank's being 3 month Euribor. The Greek 1,8% marginal is a bit high, but not extra ordinarily high, more like an healthy margin.
So.. 6 months Euribor is 0.963% and 3 months Euribor is 0,659%...
meaning in Finland I would get 6 months Euribor+marginal loan on 1,864%
meaning in Greece I would get 3 months Euribor+marginal loan on 2,459%
In case of the student debts, like I said they are backup by the Finnish state thus their marginal are lower because of the lowered risk. In case of the entrepreneurial and VISA debt, the differences can come up from different legal aspects, like I said in Finland you can't default or escape your debts, also there can be differences on how much loans go to bad loans, thus in the Greece more businesses go bankrupt, banks have to protect from that by having larger marginals.
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Looked up the table again. Seems to be quite a specialisation!
Austria, Norway, Sweden, Switzerland, France - all medals for skiing!
Some - throughout, some - with 1 exception type skeleton/luge.
On the other hand - Korea - 10 medals for speed skating! That's clearly a focused effort.
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To WebAliceinwonderland (289):
Alice, as this whole thread is becoming more and more off topic, I thought I could address you on one small thing...
I found one good reason to visit Russia, Moscow to be exact. The reason, Tretyakov Gallery. In Helsinki they have a small exhibition portraying selected items from the gallery in art museum Tennis Palace. The exhibit closes soon and the tickets are 9 euros and a thought came to mind that maybe I would want to spend a little more to see more than few items. I found article about Tretyakov Gallery in Wikipedia, and after a glance I was like "trip canceled!".
http://en.wikipedia.org/wiki/Tretyakov_Gallery
Look at it! It is housed in a Soviet block, beautiful pieces of art housed into a that kind of building just takes a breath away, in a wrong way! Aaargh!!!
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Jukks, are you teasing me? The glass/beton something is a "modern art" wing. Never heard of a single live persom willing to see that branch :o))), inside or otside :o)))))
The normal Tretyakov gallery is where it is and where it always were and all. (They have not bad cakes in the cafe in the cellar, and an alright good poster souvenir shop).
Can't say I am an admirer of this type Ivan Grozny Muscovite architecture :o))) low ceilings bow-type ceilings arches type galleries
...
but for being modestly old 1850 something it qualifies.
Skip the modern wing if you go - what's in there? Nobody knows.
While the old one is portraits portraits boring portraits :o))) and good pictures pictures fairy-tale and story and his-tory and other scenes very practical easy to understand pictures. Quite viewable.
Moscow only has 2 museums :o)))) - Tretyakov and Pushkin.
To Tretyakov you go after old Russian art, and to Pushkin museum - after French impressionists.
And in case you worry ab Pushkin museum being beton and glass - no worry. The museum is only called Pushkin but was built and filled in by dad of Marina Tsvetaeva (poet) and Tsvetaev-s all are alright with taste :o))))
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By the way they say that that speedy train that began to trot btw Moscow and St. Pete will be extended to Helsinki . eventually.
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And tonight Russian men lost! to Russian women :o)))
We compete internally as well, I'm afraid :o))))
Female folk won the ski relay yesterday, on the "Day of Defender of Motherland" ;o)))) - naturally - defended, that "Motherland". As usual!
And the men lost tonight, shamefully, 2 minutes late or whatever, shame on them and ugh!
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Jukks, just don't get out of the train. Russia is an awful expensive place un-clear why, so - Helsinki - Hermitage - 2 pictures down town as a decent tourist on the embankment - cafe snack - Moscow Tretyakov - a picture on the Red Square as a decent tourist - an ice-cream - turn around on your heels - back home!
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Mike Dixon
Re #237
Hadn't grasped the depth of your experience: You are either a WW2 veteran or a warchild with a very long memory! Congratulations.
I only know of WW2 from my WW2 veteran dad at Dunkirk, D-day etc. & the 'liberation' of Brussels where he met my veteran Belge mum who had lived through the Nazi occupation. Borne & bred in south England, I've read a few books, served in HM Forces & been around the World in 60 years, now retired to Scandinavia, so feel I do have a contribution to make to these debates.
As for your, "..Economically the account (Spain) with the EU is now in balance.." is presumably an accurate generalisation: That Spain was a basket case pre-WW2 & under the fascist regime stagnated is true.
However, whether Spain requires the 'one-size-fits-all' strait-jacket of the EU to have prospered quite as well as it has done post-Franco is another debate altogether.
So far as the recors show these things, Spain was attracting tourism, restructuring & investment throughout the '70s and reasonable prosperity was becoming widespread.
Yes, of course, like the UK, it has benefitted from the commonality of trade tariffs, easing of communications etc. the EEC had in place - - those genuinely constructive and useful tools that largely enabled the political stability - - and Spain has loyally stuck by the new version called the EU.
That is where I differ from you in perspective: I do not concede any of us need/ed agree to the EEC acquiring the Maastricht or Amsterdam treaties that began an extension of Brussels' overall power-base into the functions of a Madrid Government (or London, Lisbon, Vienna etc.) and thence to the gradual erosion of National sovereign authority across most of Europe.
Simply do not agree with you at all on the condition of the UK/England: "..overcentralised, bureaucratic.. under-invested..": Frankly, the first two describe the EU so accurately that it is a wonder you thought to compare it with the UK!
How you are able to equate Westminster & 3 'devolved' assemblies to Brussels ruling 500,000,000 Citizens as not being an example of crass, excessive 'over-centralisation' is something I leave for you to explain.
'Under-investment', well I suppose, that would depend on which aspect you are looking at: Certainly Health & Welfare Services always need more than they get from the pot and inadequate/incompetent 'bureacracy' of 'management' in those sectors is clear for all to see.
What is it that makes you most "..sad.." about your homeland's situation: That UK/England is one of the few Nations still unwilling to totally bend the knee to Brussels (unlike Madrid), that it still has its own Currency (unlike Madrid plus 15 others), that it still holds fully to its Military commitments and alliances in NATO (unlike Madrid & almost any other nation in the EU), that its Citizens still display a robust 'island mentality' & propensity for individualism-entrepreneurial radicalism (unlike any other EU nation)?
Or, are you so irked by the UK public's and more especially those 'Londoners' in general (whom as you implied, died in thousands to defend the 'islands') not accepting they need handover their historic political-cultural inheritance to the questionable safe-keeping of Paris-Berlin-Brussels?
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since you mentioned it Gavin, could we know a bit more about these "aggressive anglo-saxon media" as well as those "aggressive anglo-saxon speculators"...?
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Now let's be honest, sincere or cynical. Pick your own word. Is there anyone that thinks speculators are NOT to blame? Who created the crisis? Who brought down giant corporations in a blink of an eye? Don't tell me it is just 'bad management'. It's somewhat like gambling. We bet on football games, boxing, tennis etc. Governments legalized gambling as a means to set rules, somewhat monitor the associated black economy and have a piece of the pie. But aren't we all frustrated (but not surprised) when some football game is fixed? Sometimes it's the president, sometimes its the referee, sometimes one player, a group of players, etc. Speculators? Of course they are to blame. Not solely of course. Consider the other 'players'. Politicians, bankers, hedge funds, even the press. A whole new mob. Global operations. Rule free. Thank you free economy. You provide for us.
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@84
Hmmmm.. 21st Century? Debt Century you mean?
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Thanks for this article and for the link from Paul Krugman that I din’t knew. In fact, I win lot of money with the decrease of the [Unsuitable/Broken URL removed by Moderator] value.
Thanks also to WebAliceinwonderland for these nice videos.
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Has anybody noticed how the GBP is creeping up against the Euro?
It's good for Eurozone importers but not so good for exporters to the Eurozone.
As an "Anglo-Saxon" I think of Europe as a great place to live, as long as it's France. The other countries might be nice to visit as long as you can get out afterwards.
Rumour has it that if you drive your car into Hungary, for example, you cannot get out afterwards without a thorough inspection of your car for damage. If you have any damage you are detained until it is established that you have paid any 3rd party for the accident/s.
So much for an egalitarian europe.
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Great Article!
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Nick Clegg tells us that Britain is too small to tackle huge issues like climate change and mass immigration by itself and we need to be in the European Union to survive. Perhaps Mr Clegg is too young to remember two other 'huge issues', the First and Second World Wars, when Britain and her allies prevailed without resorting to political and monetary union!
We have been in this union now for 37 years, it is devious and calculating, ambivalent and conflicting, deceitful and evasive. It is authoritarian and anti democratic. It has ruined British commerce and industry and we are still waiting for someone to identify and name the 'self evident' benefits.The Unions main tenet, monetary union, has now proved to be an unworkable nonsense has it was always bound to be - pack it all in now and let us get back to living our lives as friends and neighbours instead of being press-ganged into the European Empire!
hamlet934
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This is hilarious.
http://news.bbc.co.uk/2/hi/business/10501902.stm
The real "stress test" is to see if the vaults have enough room to hold all those Euros the ECB printed without exploding.
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