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Portugal bailed out at last

Gavin Hewitt | 09:29 UK time, Thursday, 7 April 2011

For months economists and observers had forecast this day. Portugal was heading for a bail-out. It is the third eurozone country out of 17 to need a rescue.

Portugal suffers from low growth and an uncompetitive economy. It has also run up a dangerously high deficit.

The government in Lisbon had been sluggish in embracing labour market reforms and making cuts. The austerity programmes really only kicked in in January.

Meanwhile the harsh gaze of the bond markets fell upon Portugal and the traders were unconvinced. So the cost of borrowing shot up to a level that was all but unsustainable. The country would have struggled to raise the funds it needed - certainly by June.

As the government hurried to cut spending and raise taxes the mood of the country changed. There were demonstrations against austerity.

Then the week before last the Portuguese parliament took a step that sent shockwaves through the eurozone. It rejected a series of measures that had essentially been drawn up by the European Central Bank and the European Union. The government fell. The Germans, and others, demanded that Lisbon should remain committed to cutting its deficit and restoring competitiveness to its economy.


Lisbon scene with tram - file pic

The EU's bail-out funds are certainly sufficient to help Portugal. A conservative estimate is that it will need 75bn euros (£66bn). A more difficult negotiation will be the terms of the deal.

So far the bail-outs of Greece and the Republic of Ireland have failed to draw a line under the crisis. They have protected both countries from the markets, but they have not addressed the longer term problem. How will these countries - facing a severe financial squeeze - find the growth and the funds to sort out their debts in the long term?

Portugal will be in the same position. The gap between it and countries like Germany is widening. Its economy is predicted to shrink this year by 1.4%.

Any bail-out that includes the International Monetary Fund will be extremely unpopular in Portugal. There are bitter memories of the past, when the IMF dished out some bitter medicine. The Portuguese people have indicated they are opposed to the current spending cuts. Will they accept further austerity? Where will growth come from?

All of this lies ahead. The ECB may well today raise interest rates, making conditions harsher for Greece, Ireland and Portugal.

Many believe that - despite these bail-outs - some kind of restructuring of debt is inevitable. The determination to prevent that at almost any cost is sowing real division within the eurozone. Watch how the electorate votes in Finland on 17 April. One key factor in the campaign is resistance to rescuing weaker eurozone members.

In Portugal once again it was the banks who cried out for help. They wanted a bridging loan and a rescue became inevitable. Increasingly the mood in Europe is to let banks and other senior bondholders take a hit, rather than the taxpayer.

The crisis in the eurozone is much more than about what rescue fund will be tapped, or whether there are mechanisms to prevent similar crises in future. The heart of the problem is that Europe has become, in part, a low-growth area. There are deep divisions within the eurozone. Countries that use a single currency are vastly different in economic performance.

The price of saving the euro is years of austerity for the weaker eurozone countries. It is those stresses that will be worth watching in the weeks ahead.

Will the pressure now move to Spain and beyond? Not necessarily. Spain has taken convincing steps to reduce its deficit and open up its economy. But its unemployment rate of over 20% is growing. Demand is weak. If Spain was to need a rescue it would shake the eurozone and raise questions about its long-term survival.

Comments

  • Comment number 1.

    I was speaking to a German friend of mine yesterday and he said "It is bad that the UK doesn't have the Euro"
    "Bad for who?" I had to ask.
    He wasn't sure how to respond.
    I was just in the south of Spain and the low employment rate was certainly noticeable, during normal working hours on weekdays the streets and beaches were busier than ever but the shops sadly were not, it really was a weird vibe.

  • Comment number 2.

    Unfortunately Gavin some of your statements are contradictory. For when you say "The EU's bail-out funds are certainly sufficient to help Portugal" you then very quickly say "So far the bail-outs of Greece and the Republic of Ireland have failed to draw a line under the crisis"!

    Also each time this sort of thing happens the mainstream media then assure us it cannot spread. I remember being told it would not spread to Ireland and Portugal. I saw a good blog post earlier which highlighted some of the real issues for Spain.

    "Portugal has long considered itself as Europe’s defence mechanism for Spain. That defence has now fallen and I expect the focus to move to Spain. Recently there has been a tendency for the mainstream media to declare that Spain has been saved but this is a familiar mistake from this crisis period. Last week her unemployment rate rose again to 20.5% and it represents in one number the problems in her housing,banking and construction sectors.

    The country most exposed to the failure in Portugal is Spain as her banks do a lot of business there and they are rumoured to be large holders of Portuguese debt too."
    https://t.co/Rs6FXP7

  • Comment number 3.

    Another in my mini-series: 'Where are 'pro-EU' when Brussels is Burning!?' Replays of past 'pro-EU' contributions.

    This one is quite recent: A combination of 'matt_us', 'jorgegG1', Vassilis, MHoward and their referrals to Mr Hewitt getting it wrong and berating him for a lengthy well-researched article on the upcoming Economic-Fiscal crisis facing the Iberian Peninsular nations.

    On the 25/26th March, they insisted Mr Hewitt's 'Shadow Over EUrope' blog had got it all wrong and should, "..Have a look what really is going on!.." They fell over themselves pointing to anything except a massive Portuguese 'Bail-out'.

    I especially like (it has a certain ring of 'pro-EU' head-in-sand supremacy about it):

    38. At 06:24am on 26th Mar 2011, matt_us wrote:
    Gavin Hewitt panders to the Europhobe British public - and does little of his own thinking of which financial interests are behind the Eurocrisis. And is a little behind the times what really is going on..."


    Yes, matt_us actually wrote Mr Hewitt is the one 'behind the times'!


    Not content with that he went on to suggest I & other 'anti-EU' should... "Why don't you have a look at Robert Pestons blog and his recent report on Portugal from Thursday 25th March - and my comments underneath. We are being brainwashed by hedgefunds and everybody else they influence, such as BILD and economists, that all European countries are bust, when they are clearly not..."


    Amongst the continued hilarity (then & in hindsight) was this from JorgeG1 eagerly backing up the nostrum of the outraged 'pro-EU':

    "...In a nutshell, all this makes for sensationalist journalism, but other than that it is fact free...."

    And,

    "21. At 23:39pm on 25th Mar 2011, vassilis wrote:
    @19. At 23:07pm on 25th Mar 2011, JorgeG1
    Well said. Gavin's analysis is just sensationalism for the sun-reader EU-bashing public in the UK. Set to generate ridiculous reactions such as comment 1. BBC should be ashamed."


    JorgeG1 really got into his stride later on revisitng his favourite theme that it is Brtian that is in all sorts of mire and everything in the EU-EUro-garden is lovely if only we Brits weren't too dull to smell the produce.

    Hmm, the following by our Spanish EU-phile has a distinct whiff of thoroughly over-ripe 'pro-EU' hyperbole:

    74. At 19:46pm on 26th Mar 2011, JorgeG1 wrote:
    @ 28 Huamek

    "JorgeG1 in his anti British rant misses a heap of points , one being that Britain is not in the Eurozone ."

    No I didn't miss that point, but it seems that you along with 99.9% of the Europhobe brigade cannot see anything whatsoever positive with 27 countries that share a single market between them also sharing a single currency. What would you think if you entered a shopping centre and every store worked in a different currency? Well, a single market is a bit like that, but instead of being a small shopping centre it is a giant one..."


    Yes, honestly, that's JorgeG1's analogy! If only we Brits could see the EU entity as our local Shopping Mall... the sort where the Management forces all the customers and shopkeepers to donate to a retailer whose gone Bankrupt!

    85. At 02:06am on 27th Mar 2011, margaret howard wrote:
    "..Incidentally, when we switched on the news tonight and saw young men throwing missiles and smoke bombs going off, we thought for a moment we were seeing events unfolding in Libya. My husband suggested this looked so bad that Gadaffi might be persuaded to come to our aid and declare a no-fly zone around London!"


    That's right, a 'pro-EU' and so anti-British she actually is callous enough to make a joke about Libyans fighting for their freedom from a bloody tyranny and the Economic state of the UK! And that, in response and support of JorgeG1's trivia!


    'Pro-EU'... They deserve everything they get! Chumps!

  • Comment number 4.

    @1 Michael IV

    "I was speaking to a German friend of mine yesterday and he said "It is bad that the UK doesn't have the Euro"
    "Bad for who?" I had to ask.
    He wasn't sure how to respond.
    I was just in the south of Spain and the low employment rate was certainly noticeable, during normal working hours on weekdays the streets and beaches were busier than ever but the shops sadly were not, it really was a weird vibe."

    I am German and strongly disagree with your friend.
    If there is anything your political leaders did right it was clinging to the pounds sterling.
    Formal opposition to the euro is still weak in Germany, but growing fast despite the attempts of leading media and the established political class to suppress a rational debate about it. Younger generations like myself were indoctrinated with pro-euro and pro-EU propaganda in school, which is the reason for a generally positive attitude towards the European project.
    If you ask a random young German about the euro, chances are he will repeat the phrase "we profit more than any other nation as we are export world champion".
    No economic substance here, really.



    With Portugal being "bailed out" and Spain being next in line, all while there is still no land in sight for Greece and Ireland, there is no future for the euro in its current constellation.
    We either need a full stop and have those PIIGS leave the union for their own good or the union will break apart and not only not succeed in bailing out the investors, but cost the average tax payer in Europe hundreds of billions.

  • Comment number 5.

    utter madeness. the really sad thing is that you and i are paying for this.
    my hope is that this will be the end of the euro project, but i suspect it will carry on. the french and germans have too much to lose if it fails. therefore we'll carry on paying to support failing economies.
    can anyone tell me what we're getting in return?

  • Comment number 6.

    Every time we think the Euro zone crises has been sorted out, the domino effect comes back to haunt us. https://bit.ly/eofGqT

  • Comment number 7.

    Hi Fast Pete

    You are right that it is madness. The current behaviour of the EU is like an inverterate gambler who cannot see that no matter how much money they risk in the long run they will lose. Just a bit more will save the Euro, and then a bit more and then more.....

    But the UK does get something in return. It is difficult for a broke country to trade. The Eurozone is a hugely important export market for the UK. If the Eurozone undergoes economic collapse the UK economy might just go with it. A collapse is not in the UK's interests and this is what the UK is paying to prevent.

    This must really stick in the guts of the UK tax payer. Paying for the mistakes of other nations while facing service cuts at home.

    Digressing a little; anyone who questions the commitment of the UK to the European Union should take a look at where the money is coming from. Talk is cheap; in terms of actions the UK is a great supporter of the European project.

    What is neeeded is a plan for dismantling the Euro. One that doesn't precipitate the very economic collapse we would like to prevent. Are there any friendly economists out there with some good suggestions?

  • Comment number 8.

    7. At 11:42am on 7th Apr 2011, Ulkomaalainen wrote:

    "..anyone who questions the commitment of the UK to the European Union should take a look at where the money is coming from. Talk is cheap; in terms of actions the UK is a great supporter of the European project..."



    BUT! It's NOT "cheap" at all!

    The UK Government is going to lend around 3 Billion as a part of its 'commitment' to the EU project.
    Yesterday, over 2 million British parents were informed the Government is CUTTING its contribution to the cost of Nursery Care for their children.
    3 Billion would not only COVER THE FULL COST, but pay for ANOTHER ENTIRE YEAR of Nursery Care for all!

    Portuagl maybe an important Trading partner & Investment area for UK-EU 'big-Business/big-Government', but the British Mothers who can no longer afford Child Care & those who will have to give up Work because of the CUTS aren't really in the UK-EU perspective. Just like virtually anything to do with ordinary Citizens: If it isn't an opportunity for 'big-Business/big-Government' then it doesn't have a fair chance whilst the gravy-train of Brussels' 'one-size-fits-all' (e.g. 'big' Bail-outs that big-Business/big-Government) attracts the key policy-making Funding.

  • Comment number 9.

    Britain - the parent of the EU, can always be counted on for a bail out in times of trouble!
    If someone had been living on the Moon for the past 10 years and returned, they would be pretty sure there was some kind of slight of hand deal going on in the EU background. Why else would a country with its own finance problems be dishing out billions to other countries. Every day, Councils are paying off workers and cutting services, Hospitals are running on empty, electricity and gas companies are responsible for making sure not many people live past retirement by dictating how many old people will die due to hypothermia, diesel and petrol increases at a rate which will soon mean anyone with a job will be unable to get to it and heaven forbid you should have any money left over at the end of the month to save as this will be taken off you to pay for your overpriced private Care Home or overworked private visiting Carer when the Government cuts those services too. The Government love people who work hard to make even a reasonably comfortable life as this means they can squeeze every last penny out of them to pay for people who dont want to work and get their extra money per week to pay for their new dog or brand new flat screen tv. It may just be my point of view caused by my young age, but the British Government does nothing to encourage you to live honestly and work for a living, especially when they are filling in their fraudulant expense claim forms and give the country's money away. Hand to mouth is unfortunately not just a way of life for third world countries, but is becoming more and more the case in Britain - tightening the belt doesnt mean you can let the money fall out of your pockets!

  • Comment number 10.

    Quite frankly it's not our problem and the 3 Billion would more or less guarantee our second carrier and the jobs that go with it. I'm sick of paying for others.

    The best thing is though. It makes the UK 'populace at large' even more anti-EURO than they already are, so if you are a EURO 'Quisling' I guess in the future you will have to go to Europe to spend it. (If it survives)

    I love European but dislike the EU, before anyone starts their Xenophibic drivel.

    Infact I've done very well promoting European affection with the ladies over the last 15 tears or so. They seem to like Viking types on the continent :)

  • Comment number 11.

    #1. At 09:54am on 7th Apr 2011, MichaelV,

    People where I live in Belgium perpetually ask why the UK did not take the Euro, but then as DurstigerMann #4 says about indoctrination in Germany, so it also happens in Belgium. There is never any serious media comment against the performance of the Euro as everything must be spun to suggest there are no problems. It was clear in the central banks when the Euro was introduced that they well knew there were fundamental problems, both with the honesty of the member states economies and the viability of dissimilar economies, but since it was only a political project this was ignored. My answer to Belgian's I know is that for once the UK was not so stupid as to be led by the nose into a disaster.

    Now the various countries supporting the bail out of Portugal will have to print more virtual money to fund the bail out, the economic problems are not solved but simply delayed and countries like the UK will have to find money they can't afford. It's like a person in quick sand that keeps asking more and more people to help them even though they all end up sinking.

    As for Portugal, they don't want austerity measures which is typical for a Socialist led country so why should they be helped? so that they can carry on spending money they don't have?

  • Comment number 12.

    --✄-- Will the pressure now move to Spain and beyond? Not necessarily.--✄--

    Next stop UK?

  • Comment number 13.

    This whole Euro thing seemed really convenient to us Brits - does anyone remember coming home with Belgian Francs, or Austrian Schillings and then realising that the amount is large enough to be irritating but too small to be worth converting back? But it has turned out to be a really bad idea for the Eurozone, and if we have to pay too, for us.

  • Comment number 14.

    #7 Ulkomaalainen

    Actually Britain generally imports more from other European countries than she exports . Most of Britain's profitable trade is with the rest of the world . It is true that Britain is a great supporter of the EU ; but if they had had a say in the project , it would have developed along different lines , with much more freedom of independent sovereign states and less on ever closer union . I doubt that Britain would have sought to introduce a single currency . Certainly the collapse of the Euro and too the EU , would have a devastating effect on Britain too ; but maybe not as bad as you think . Despite hardships , I think the majority of British people would be delighted .

    Yes , a plan for dismantling the Euro is a good idea . As with the beginning , they should plan ahead to end of Euro day , so each country can prepare its former currency to be reintroduced . Perhaps another idea would be to relax all ECB regulation on the Euro and let countries devalue and adjust interest rates .
    I believe many Germans would like to return to the Deutchmark and Italians to the Lira , that would be a happy and uplifting day , even if their money was hugely devalued , they'd soon recover .

  • Comment number 15.

    #9. At 12:21pm on 7th Apr 2011, Scot65,

    Well said, the bleeding heart, do-gooders who love attending charity functions in expensive clothes and babble on about helping every cause that does not include the UK, as the UK is not PC to them, need to be taught a lesson that 'charity begins at home'. It is a disgrace how much is being wasted on an undemocratic, incompetent, corrupt EU that is to all intents and purposes an implementation of the Socialist dream of redistribution of wealth. The EU and corruption go hand in hand and the Euro is merely an extremely visible facet of that, created by Germany, for Germany, and supported by corrupt politicians of every member state.

  • Comment number 16.

    The EU doesn't want anyone to advise them about the Euro financial crisis , but if they did someone like Max Keiser would be a good person to advise them .

  • Comment number 17.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 18.

    Portugal's plight is of course exacerbated by a political crisis with a caretaker government and an election looming. Anti-bailout parties are sure to have a strong emotional appeal in the election even if their remedies turn out to be unworkable.

    What if the next Portuguese Government refuses to comply with the terms of any bailout? What happens then?

  • Comment number 19.

    The price of saving the euro is years of austerity...

    Oh darn! Once they've gotten bored of the euro they'll be after us again soon...
    I think we're not cutting enough! 500,000 public sector workers thrown overboard in the UK aren’t going to be enough to satisfy the almighty Bond markets for much longer. Quick! Lets sack even more of them - Starting with: teachers, nurses, firemen/ women, social workers etc, etc! There’s too many loafers being paid fortunes for these non-jobs…
    Every public sector job MUST GO (or be placed 'at risk') so we can cut some sort of deal with the Money Masters and perhaps they won't set their 'Markets' on us anymore... Nick, Gideon and Dave please deliver us from the tyranny of the Bond Markets/ and other 'markets' oh please?

    Yours truly,

    Your ever devoted

    Ragged Trouser Philanthropist

  • Comment number 20.

    Well that's Portugal gone, and with the resignation of the PM is was always when not if.
    Now Spain (and I live here), Spain got into its mess with the out of control boom in housing (and with all forms of government benefiting from the taxes, no one wanted to stop the party). However there are a huge number of properties on the banks books or in most countries would have been repossessed long ago. (Ok good that they not forcing people out their houses). The problem is that there still is a huge disconnection between the official house price and salaries (average price about 10 times average salary), and also rentals, (rental return around 2%). And the reality is no one is buying here as everyone expects the price to drop a further 30% (and indeed the main estate agents are telling clients if they want to sell drop at least 20% ). If these "real" values go on the banks books, a bail out is almost a certainty. The banks are trying to rectify their capital (and some have done a very good job) and others like Santander have enough international spread to carry any issues, others, though, are in poor shape.
    Its quiet poor really that in the so called developed world one of the main drivers for wealth creation in some countries over the last 10 years has been house price, not technology or innovation, or industry, time i think to change the tax rules so property (outside being a home, or for rental) is not seen as a gold mine, and innovation is.

  • Comment number 21.

    #18. At 13:02pm on 7th Apr 2011, JPSLotus79 wrote:

    "What if the next Portuguese Government refuses to comply with the terms of any bailout? What happens then?"

    Most probably it would be the worst nightmare of the EU'philes, Portugal would have to leave the Euro, revert to a new/old currency and devalue in the process, once one country has done this others will surely follow.

  • Comment number 22.

    Shaun Richards, UK economist, in Mindful Money best sums it up:

    "The “rescue” will be a liquidity solution to a solvency problem and is accordingly doomed to failure." https://www.mindfulmoney.co.uk/wp/author/shaun-richards/

    His article from yesterday, I think, is worth a look, especially his comments about Spain and its relationship to the now failed Portugal.

  • Comment number 23.

    Is this just not more proof that the inherant problems of the one size fits all policies within the euro area will, in the end need to be addressed. Artificially low interest rates within the euro area have already wreaked havoc on the finances of various country's and now, with rates set to rise the problems of this approach seem set to multiply.

  • Comment number 24.

    The Eurozone crisis is about to get very turbulent, and significant questions are going to be raised surrounding the sovereignty of those governments at the heart. As has been highlighted in Ireland, and especially in Portugal at the moment, the electorate are not willing to accept the terms of the bailout packages and if the ECB is going to raise interest which will directly effect the terms of the bailout, the situation will be even more sour for voters.
    The question therefore is what will happen if the Portugese government refuse to accept the bailout terms, and default? The ECB cannot force the money onto them without it being passed by the elected government.
    One of the main issues the Irish electorate (and opposition ministers) had with the bailout agreed last year was that they did not negotiate better terms for the loans. The argument goes that the threat of default effects the other Eurozone countries (including the large economies of Germany and France) and given Ireland's economy was already at a state of collapse they were arguably in a position to dictate terms - Greece and Portugal aren't much different in this respect.
    Ireland is in a downward spiral in that the country does not have sufficient economic output as it is to outperform the debt and interest accrual when the longer term borrowing matures, yet alone if even deeper cuts are made and taxes increased.
    My prediction is that there will be a vast write off of debt by the ECB with the likes of Portugal, Greece and Ireland not being able to implement sufficient measures for austerity, and with the will of the large economies of Europe to persist with the Eurozone will ultimately allow this to happen.

    The reason why Germany does not undermine the Euro at this stage is not simply a matter of political posturing and indoctrination for a belief in a failed model - Germany is benefittng significantly from the export market, and its economy is growing at a better rate than the rest of Europe as a result. 'Going sovereign', as it were, is not an option for Germany in terms of its currency at this stage, and would severely harm economic growth for Germany.

  • Comment number 25.

    12. At 12:40pm on 7th Apr 2011, Ellinas wrote:
    --✄-- Will the pressure now move to Spain and beyond? Not necessarily.--✄--

    Next stop UK?



    That is such incredibly wishful-thinking!

    When are You going to look at the factual reality?

    It is the EUro-zone and not the Pound which is in trouble.

    Yes, the UK Economy is far from healthy & yes, the UK Citizens are going to be paying a very high price for the Worldwide Economic catastrophe of 2008-2010: However, Sterling is an autonomous region and not bound by 'one-size-fits-all' Fiscal lunacy policies of the EU-Brussels' ECB.

    Try to get this in focus:

    Euro-zone is 15 Nations with 15 disparate Economic-Fiscal performance.
    Euro-zone is 15 Nations bound together by a 'Politically' constructed Currency.
    Euro-zone is 15 Nations trapped in One Interest-Rate irrespective of their Economic performance.
    Euro-zone is a 'cash transfer' cow for some of those grossly under-performing 15 because that is what repeated 'Bail-outs' mean.

    Euro-zone is huge Fiscal irresponsibility which the Financial-capital Markets are focussed on.

    That attention will only cease when there is drastic restructuring and at least 3 & maybe as many as 5 EUro-zone members have disembarked from an enterprise they are totally unfit to participate in.

  • Comment number 26.

    5. At 10:59a.m. on 7th Apr 2011, Fast Pete wrote:
    "can anyone tell me what we're getting in return?"

    What you're getting in return is a 6.7% return on your loan, in the case of Ireland. A tidy profit at the expense of your troubled fellow EU nations.

  • Comment number 27.

    I simply love the left wingers saying that the bond markets are the bad guys--these markets were good enough when the big spenders wanted to borrow ever more money from them.

    But never mind that, what I should like somebody to explain is how is this a "bail out"? Portugal needs to pay DOWN its debts not take on more. A bail out worthy of the name would involve transfer of CASH to Portugal to enable it to pay down its debts. It was increasing debt that caused the problem remember. Nobody can say to the contrary, especially not at the high and rising rates that Portugal will have to pay, yet not be able to service.

    The remainder of the EU is unsurprisingly not interested in giving away its cash, and who can blame them, so it is genuinely hard to understand why Portugal (and Greece and Ireland and soon perhaps Spain) see it as in their best interests not to scapa.

    It is blindingly unarguable that a devauation is necessary, having left the ill-conceived euro well behind first of course.

  • Comment number 28.

    #26. At 14:15pm on 7th Apr 2011, Lord_Flashman wrote:

    5. At 10:59a.m. on 7th Apr 2011, Fast Pete wrote:
    "can anyone tell me what we're getting in return?"

    'What you're getting in return is a 6.7% return on your loan, in the case of Ireland. A tidy profit at the expense of your troubled fellow EU nations.'

    I guess you're hoping that the EU, ECB etc will not write-off the debt if and when the bailed-out countries default, after all few expect these debts to be repaid as they are simply a temporary delaying measure that does not solve the problems that caused the debts. Rampant EU Socialism on the scale of if you've got it spend it (on German exports of course) or if you haven't got it borrow it and spend the borrowed money (again on German exports).

  • Comment number 29.

    #25 cool_brush_work

    My above "Next stop UK?" post is the sum of two parts...

    1st part: Next stop UK

    --✄-- Yes, the UK Economy is far from healthy & yes, the UK Citizens are going to be paying a very high price for the Worldwide Economic catastrophe of 2008-2010 --✄--

    2nd part: ?

    --✄-- However, Sterling is an autonomous region --✄--


    Now i wonder why you think that i don't look at the factual reality at the time you actually repeat (with some more words) what I've already said earlier?

    As for the Euro-zone focus by you that is another story...

  • Comment number 30.

    Why did the North of England not seperate from gbp in the eighties and issue it's own de-valued currency?
    The economic issues are not of the euros making; they are caused by the likes of those who worship at the twin alters of the stock markets and economic theories that pander and validate their greed.
    Whilst an argument can be constructed that regions with different characteristics should pursue differing economic policies it seems that the majority of the comments are rather more (little englander) delight at a perceived opportunity to bash the euro and by extension the EU than considered critisism.
    The fact that few to no arguments have been made prior to the advent of the euro for different regions within a "sovereign" state to have differing currencies based on their economic state is telling.

  • Comment number 31.

    29. At 15:11pm 7th Apr 2011, Ellinas wrote:
    #25 cool_brush_work

    My above "Next stop UK?" post is the sum of two parts...

    1st part: Next stop UK"



    Ellinas there isn't any 'two parts' there's only You confusing a EUro-zone Currency and a sovereign Currency as being part of the same economic mess.
    They aren't.
    Portugal must have a 'bail-out', despite its 'bail-out' (or perhaps because of it)Greece is going to have to default before 2012, almost certainly before Greece defaults Spain & maybe 1 other EUro-zone nation will have had to apply for 'bail-outs'.
    All of that will signal an end to the present 15 Nation 'zone' and a reduction to between 10 & 12 members.

    The one really bright aspect for the ERUro-zone is that the UK is 'not' in it: If the 'bail-outs' for Greece, Ireland, Portugal... & probably Spain, Belgium are considered excessively costly then the idea of the EUro-zone attempting a 'bail-out' of the UK, the EU's 3rd largest economy just defies quantifying except as a 'bail-out' beyond the coffers of the entire EU!



  • Comment number 32.

    @15 Buzet23

    "The EU and corruption go hand in hand and the Euro is merely an extremely visible facet of that, created by Germany, for Germany, and supported by corrupt politicians of every member state. "

    I won`t argue against the fact that German industrialists and Gaullists were in support of the euro. The export industriy did benefit significantly, after all.

    But this doesn`t change the next fact that Mitterand demanded Germany to accept a common currency in order for France to support/permit reunification.
    Sadly, the atmosphere back then was so emotional that this agreement did not receive the media attention necessary.

    Based on statistical evidence and real life experience, the average German did not benefit and I`d even go as far as to say that the euro did the exact opposite.
    In order to properly reflect Germany`s economic size, the euro would have to be appreciated by about 20%.
    Along with stagnating wages, this is a measurable and real loss of wealth for most people and sectors of the German economy which are not export oriented.


    Now that Europe established a de-facto transfer union, it will be interesting to see just how long the EMU will be able to hold out.
    Here in Austria, a party highly critical of the EU and euro called FPÖ could come to power at the next elections.
    And even though Austria is small, what is going on here does not go unnoticed by the German public.

  • Comment number 33.

    Anyone who thinks that the UK can avoid this crisis is kidding themselves. The complex web of debt between the banks of the various countries makes it a massive pack of cards. If too many countries default the whole banking system could crash. This is the reason for the continuing bailouts. But the bailouts will not fix anything. Its like borrowing on your credit card to pay the mortgage. The debts are simply to high to be serviced, and they rely on, fast disappearing, economic growth to service them. Cutbacks will achieve nothing but a reduction in net demand and in turn a reduction in tax receipts requiring even more cutbacks ie a death spiral to the economy. Default is therefore inevitable. The only question is will this collapse the banking system at the same time. Time will tell.

  • Comment number 34.

    #33 - Averagejoe

    The UK is not part of the Eurozone. Please make your point again, this time applying logic and the odd fact or two.

  • Comment number 35.

    #31 cool_brush_work

    --✄-- Ellinas there isn't any 'two parts' there's only You confusing a EUro-zone Currency and a sovereign Currency as being part of the same economic mess.
    They aren't. --✄--

    Hmm! Aging problems...actually the parts are two. Anyway! I never said anything here about EUro-zone Currency i only spoke about UK and nothing else. Quite the opposite: it was you, implying for the today UK situation the Worldwide (?) Economic catastrophe of 2008-2010.

    Now since you talked about EUro-zone and a sovereign UK as not being part of the same economic mess...take a look at this research published on the journal of Physics and realize that:

    EUro-zone countries (apart from Greece, Portugal, Ireland) with a much lower GDP, such as Belgium, are able to initiate a global crisis (the other EUro-zone members are Spain, the Netherlands, Italy, Germany, Luxembourg and France):

    Worldwide spreading of economic crisis

    Antonios Garas1, Panos Argyrakis1,5, Céline Rozenblat2, Marco Tomassini3 and Shlomo Havlin4


    Last but not least to the EU-UK economic subject keep in mind that for the Arabs/Chinese etc. you are more like another EU country and not much of a Sterling autonomous region and i personally see any future EU/UK situation more like the below described "Fukushima/Tokyo" example

    e.g. the nuclear incident is to Fukushima but if someone nowadays propose me a vacation in Japan i surely prefer to go elsewhere.

    Now as for the Greek situation: Greece it will not default in 2012 because the ECB already decided that will buy Greek bonds at the primary market even after 2012. Of course selling bonds to the secondary market it will be a problem even after 2012-13 (when the first bail-out ends) that's why it's highly probable that Greece will restructure its dept (maybe this summer), but not default.

  • Comment number 36.

    #33 Averagejoe

    --✄-- Its like borrowing on your credit card to pay the mortgage. --✄--

    excellent description of the current bail out situation...i could also add:

    Its like borrowing on a part-time job credit card owner to pay the mortgage.

  • Comment number 37.

    35. At 17:01pm 7th Apr 2011, Ellinas wrote:


    With respect Ellinas there is no point at all You producing 'links' to sites that predict one way or the other on any of this: They are about as useful & accurate as my own above predictions - - simply that - - predictable biased prediction!

    You chose to write bringing UK into the frame of 'next' nation needing a 'bailout: If it makes You feel better about Your own and the EUro-zone situation fine by me; however, I will point out again there is no Economic-Fiscal rationale for comparing the UK to the 15 as the whole situation is totally different.

    Don't mistake me: I wish Greece well and if it does not default then I suppose that is a good thing - - though I'm bound to say I actually feel Greece continuing to struggle to align itself in Economic-Fiscal terms with the likes of Germany & France is a ludicrous proposition - - IMO Greeks would do well to get out from under, and the sooner the better for Greece and for the EUro-zone. Why not have a Referendum on it?

    Cheers.

  • Comment number 38.

    Does anybody realise that the bail-out money has to be returned at an interest? This is business, like everything else, and the short-end of the stick goes to the tax payers in Portugal, Greece and Ireland and not those in the rest of Europe. Do you really believe that Germany, the UK, France, etc. will provide help in return for nothing?

  • Comment number 39.

    #37 cool_brush_work

    --✄-- You producing 'links' to sites that predict one way or the other on any of this: They are about as useful & accurate as my own above predictions --✄--

    ๏̱̀๏́ ... ๏̯๏ ... you better stick to my 1st post. It's simpler.

    --✄-- Greeks would do well to get out from under, and the sooner the better for Greece and for the EUro-zone. --✄--

    We have a Greek proverb: If you join the dance-circle, you must dance.

    --✄-- Why not have a Referendum on it? --✄--

    For the same British reason

  • Comment number 40.

    #38 - victor1234

    Absolutely right. Two points here - the first being that those politicos in Germany and elsewhere who are funding these bailouts do not take into account that, ultimately, these will be very good investments for them. The second point is that even the phrase 'bail out' is misguided. These are not bailouts, they are judicious injections of capital motivated by self-interest. I do not complain about this. Simply invite them to be honest for a change.

    #39 - Ellinas

    I am sure much of what you post is interesting but I have had it with trawling through all the clever bits of html. I don't know how or why you do it on a blog but please stop it.

  • Comment number 41.

    In this economic cycle which is dead noting will work no only in the Euro zone bat in all the world.
    The America system of capitalism and all the credit rate agency must be dismantle with urgency or will have a world wide revolution.
    John

  • Comment number 42.

    GHL "its [Spain's] unemployment rate of over 20% is growing. Demand is weak. If Spain was to need a rescue it would shake the eurozone and raise questions about its long-term survival.





    And that's when the proverbial s..t is going to really hit the proverbial fan.



    P.S. Any comments from Scotland re US$ to euro exchange rate? :-))))))))))))))

  • Comment number 43.

    #39 - Ellinas

    --✄-- --✄--

    ๏̱̀๏́ ... ๏̯๏ ... --✄-- --✄----✄----✄--

    Oh it is that simple? And I have been trying to bore people to death with word for all these years?

  • Comment number 44.

    #42 - powermeerkat

    You are looking in the wrong place PM.

    Just watch out for when southern Italy becomes North Africa in Europe while northern Italy becomes south Switzerland. Fortunately there will be a buffer zone - Chiantishire - you know, the bits the Brits bought up while they still had money (or credit?). But the Italian economy? No comment.

  • Comment number 45.

    @38 victor1234

    "Does anybody realise that the bail-out money has to be returned at an interest? This is business, like everything else, and the short-end of the stick goes to the tax payers in Portugal, Greece and Ireland and not those in the rest of Europe. Do you really believe that Germany, the UK, France, etc. will provide help in return for nothing?"

    Let`s make an analogy:
    A firm you lent a lot of money to is about to go under, because nobody is buying its products anymore. Poor quality, poor management decisions, whatever.
    Now tell me, would you lend even more money to that firm while hoping to get back all of your invested money plus interests?
    Or would you rather settle for an agreement in bankruptcy to get back at least some of your money?

    I can answer you this question: you would go for the latter as any normal businessman would.
    But our politicians didn`t, because their advisors are businessmen themselves who hold their very own interests and agendas. For example, the German chancellor Merkel asked the CEO of Deutsche Bank, Josef Ackerman, for advice. It goes without saying that Ackerman couldn`t act against his clients` interests and tell her to not "bail out" anyone.

  • Comment number 46.

    #45 - DurstigerMann

    Absolutely right but that makes the point.

    Putting money into a dead economy makes about as much sense as asking to be flown out to the Titanic to join the band. We fool ourselves if we come to believe that these are 'dead economies'. They are in a different position from the northern European economies in the economic cycle and those economies who have the money are taking advantage of it for all it is worth. Yes, of course they want to rescue their precious euro adventure but do your really believe they give a damn about ordinary Portuguese, Greeks or Irish? Do they hell! They are in it for the money. The only difference between them and the commercial speculators is that they will take a lower rate of interest because it suits their political agenda. As for Ackerman, when you are as badly exposed as DB, my guess is that you would do anything to cover your **ss.

  • Comment number 47.

    #45 - DurstigerMann

    As to your commercial argument, there is an assumption that nations - like corporations or individuals - will require ongoing credit. What if that is not true? Consider for a moment how many borrowers - both corporate and personal - have managed to drag it out for so long that the lenders have simply written off the debt. It happens all the time with small amounts. What happens if nations chose to default? Face it, there is no other game in town. The lenders simply have to accept it and distribute the loss as best they can.

    What the ECB/EU effort is about is preventing the 'basket cases' from doing that but the democratic process could unravel that. The Irish have proved this and there is an election coming in Portugal. Default for some may yet prove the best option and where does that leave the 'believers'?

  • Comment number 48.

    Hi threnodio_II #46

    "Yes, of course they want to rescue their precious euro adventure but do your really believe they give a damn about ordinary Portuguese, Greeks or Irish? Do they hell! They are in it for the money."

    I am unable to comment about the degree of affection that those in line to loan money to Portrugal hold for the Portugese.

    I can say that nobody who lends money to make money would lend it to Portugal at the rates which will be offered by the bail out fund.

    The rate given to Ireland by the UK and German taxpayers in the last bailout was significantly below the market rate. (6% as opposed to 10% if memory serves.) This means that the UK and German tax payers are not being fairly recompensed for their risk. (Has anyone from Ireland been over to either of these countries to say thankyou?) If the UK and Germany were in the bail-out to make money they would be lending much closer to the market rates.....but then that wouldn't really help much would it?

  • Comment number 49.

    44. At 19:37pm 7th kwi 2011, threnodio_II wrote:
    #42 - powermeerkat

    You are looking in the wrong place PM.

    Just watch out for when southern Italy becomes North Africa in Europe while northern Italy becomes south Switzerland. Fortunately there will be a buffer zone - Chiantishire - you know, the bits the Brits bought up while they still had money (or credit?). But the Italian economy? No comment.







    From ca 100,000 ft. I can see the whole region.

    And I have no illusions.


    Make no mistake 'bout that.

  • Comment number 50.

    Hi thredonio_II again.

    As to your commercial argument, there is an assumption that nations - like corporations or individuals - will require ongoing credit. What if that is not true?

    Is this not a safe assumption? Government debt has been around for more than 200 years after all. If I correctly recall my history lessons; government debt was the brainchild of the Royal Society in London in the 17Th century and the South Sea Company which caused the economic collapse of 1711 was formed with express purpose of financing government debt.

    "What happens if nations chose to default? Face it, there is no other game in town. The lenders simply have to accept it and distribute the loss as best they can."

    The important word here is choose. If a country chooses to default then one must ask who would lend them money in the future? If a country is in a situation where the bond markets accept that default is the only sensible option then matter might be different.

  • Comment number 51.

    @ #38

    "and the short-end of the stick goes to the tax payers in Portugal, Greece and Ireland and not those in the rest of Europe."

    Not sure how much I can agree with that.
    Does that interest money go back to the German tax payers or is that interest kept by the EU Bureaucratic entity?

    they told us a similar thing on the other side of the pond. Auto and bank bailouts will stop the economy from dying and bring in extra money they said. The interest money is either still in repayment or it is currently being spent by the government on... well... the same stuff as usual. Sure, Wall Street numbers look great but the stagflation in the rest of the economy speaks differently.

  • Comment number 52.

    #48 - Ulkomaalainen

    Hi -

    I agree about the figures but there are special considerations. For example, the British, Danish and German banking sectors are seriously exposed to an Irish default. In Britain that is especially bad because the banks involved are the ones which had to come into public ownership during the UK crisis so, of course, there are specific interests. But that is exactly my point.

    Step back for a moment and think about it. The Iberian property boom was not based on the idea of providing affordable homes to Spanish and Portuguese. It was entirely based on the assumption that people like us from northern Europe would like to retire to the sun, enjoy our pensions in an environment where they would buy a lot more and so on. The Irish property boom became so out of control that they bought into the Med. dream purely for investment. The 'dream' has gone horribly flat but we all have to wake up sooner or later.

    My point to you is somewhat different. Unless you are prepared to let these economies collapse completely - and they will at these huge interest rates - it is better to take a haircut now knowing that, at the end of the day, there will be a bonus in it for you. There are two dangers in this. The first is that the social issues that separate 'core' Europe from the periphery become politically unsustainable. The second is that the financial pressures become so severe that default becomes the preferable option.

    Personally, I would like to separate the two, proceed with the 'European experiment' but accept that the Euro idea was flawed and needs to be looked at again. For those who believe they inseparable, this raises questions about the whole idea.

  • Comment number 53.

    #50 - Ulkomaalainen

    Hi - yet again - Ulkomaalainen,

    I was very careful about the way I phrased that. You quietly and kindly corrected me from 'chose' to 'choose' but I meant what I wrote. I meant 'chose' in the past tense to suggest that they made the decision and effectively threw it at you. We have defaulted - what are you going to do about it?

    There is nothing hysterical about this. It is a real possibility and, in at least one case, would make a lot of sense. So, again, what ARE you going to do about it?

  • Comment number 54.

    35. At 17:01pm 7th Apr 2011, Ellinas wrote:
    #31 cool_brush_work

    "Hmm! Aging problems..."


    I ignored it because I'm used to Your childness when You're challenged, however, then You write, "๏̱̀๏́ ... ๏̯๏ ... you better stick to my 1st post. It's simpler...", as though You have this superiority of intellect!

    I didn't reply in kind and tried to keep You on-track for what the Economic crisis is about, but I should have learned from past experience it is a mistake to treat You as anything other than a rather overwrought librarian/archivist.

    Frankly it's laughable! The 'link' was so off-the-trolley of reality: One of those absurd concoctions learned academics come up with that bears no relation to the real World, but they get it published, some foolish part of academia gives them funds for another 2 years 'research' (meaning more utterly implausible thesis that a secretary is told to filed under FYB = For Your Bin) and on they go impressing people like You simply because You haven't the imagination or wit to glean that You'd do better thinking a little more practically for Yourself.

  • Comment number 55.

    The Eurozone is more or less one bank account shared by a few “friends” where each can withdraw and deposit as and when they wish. Thus, those that agreed with it have to accept bailing out the “friends” that irresponsibly used and abused the bank account. The system is not robust and will eventually collapse if not reviewed. So far Portugal, Greece and Ireland have shown to be unable to manage their share of the account and need skilled “supervision”.

  • Comment number 56.

    @47 threnodio_II

    "As to your commercial argument, there is an assumption that nations - like corporations or individuals - will require ongoing credit. What if that is not true? Consider for a moment how many borrowers - both corporate and personal - have managed to drag it out for so long that the lenders have simply written off the debt. It happens all the time with small amounts. What happens if nations chose to default? Face it, there is no other game in town. The lenders simply have to accept it and distribute the loss as best they can."

    That theory belongs on the junkpile of history, next to communism.

    Neither can governments sustain a budget deficit indefinitely, nor do they need to do so in order to finance welfare state. The German or Austrian welfare states for example would run a big surplus without the massive interest payments.
    Even with 1,2 million foreign nationals on social benefits in Germany. They are almost a negligible factor compared to decades of deficit spending.


    The problem nowadays is that politicians can freely handle money which isn`t theirs. They seem to be completely detached from any fiscal responsibility, because they can just borrow even more and more and more...or so they thought.
    You don`t need Greece to see that this is a bad idea, just take a look at the crippled Japanese state with public debt around 200% of GDP. Japan proves that even the most advanced economies have no out of jail card.

    And let`s not start with compound interests coming into play here.

  • Comment number 57.

    "Younger generations like myself were indoctrinated with pro-euro and pro-EU propaganda in school ..." (DurstigerMann, 4)

    One of the favourite ploys of pro-EU propagandists in Britain is to equate the EU with Europe, presumably with the intention that eventually we won't even be able to conceive of a Europe without the EU. Rather pathetic really. Do you get that in Germany as well?


    "What is neeeded is a plan for dismantling the Euro." (Ulkomaalainen, 7)

    An essential element of this has to be a clear vision of what would replace the Euro. A return to the status quo ante seems unlikely. I'm not an economist, but some options might be:

    (1) Division of the Euro into a northern and southern Euro (at least as a first step). I've seen a couple of suggestions along these lines.

    (2) Germany returning to the DM and France to the franc, with other countries adopting these currencies as they see fit, or aligning their currencies to the DM or the franc.

    (3) Keeping the Euro throughout the current Eurozone, but as a common currency rather than a single currency. I believe that was one of the original concepts proposed for the Euro (but I might be mistaken). If the Euro had to compete with national currencies, market forces would soon decide the viability of the Euro in the various countries of the current Eurozone.

  • Comment number 58.

    Gavin: “The Portuguese people have indicated they are opposed to the current spending cuts. Will they accept further austerity? Where will growth come from?”

    That problem is being solved real-time right now with Mexicans crossing the border into the USA and the Tunisians taking the slow boat to Italy. In Asia, Filipinos are going overseas to find work and so are the Indonesians. These later two countries even have government agencies supervising and expediting the exits.

    Is there something wrong with servitude to other peoples in other lands? It is just employment for the less fastidious.

  • Comment number 59.

    BBC - Moderators !!! You are doing absolutely NOTHING to rectify the problems of our being able to post here !!! Get off your ... or you'll have no blog left !!!

    For better or worse people here try to write serious responses to the subject in question . We may not be so profound , but we should be able to at least post our meagre contribution . Some of us sometimes write quite a lot , today I could not even copy and paste , which I have had to do lately .

  • Comment number 60.

    I had something interesting to say with regard to world banking and its sourse of liquidity . I have taken some time to write my post and am not going to bother to do it again . You might all be interested to read the Max Keiser Report and see for yourselves . He gives considerable insight into the intricate misdoing of the banking and financial world .

    Ellinas

    A dance-circle will not go round if somebody has a broken leg .

    Never mind a referendum the people themselves may force a default . The Portugese government has been forced to stand down , because the people will not accept the austerity terms , how can the ECB force more upon them , a new government may just say no . the new Irish government is going to renegotiate or default . There is a strong likelyhood that Greece may default before long .
    Countries like Germany that have to lend most of the money are going to object , the people will refuse to pay their taxes .

  • Comment number 61.

    Hi threnodio_II #53

    "We have defaulted - what are you going to do about it?"

    A good question? The answer all depends on whther or not there is approval amongst the creditors for your attempts to avoid default. If the creditors approve of your attempts to avoid default but it becomes apparent that you will have to default then certain losses will simply be borne.

    The more interesting scenario is what would happen if for example Ireland defaults before demonstrating to the UK and Germany that they have made sufficient efforts to avoid a default. What would probably happen then is that the UK and Germany would put the squeeze on the ECB and other financial institutions to put pressure on Ireland's lines of credit and ensure that Ireland pays above market rates on any new debts. The UK and Germany could co-ordinate within the EU to systematically deny Ireland EU funding. These two countries could also try and use their influence within the EU to build trade barriers against Ireland. All these would be attempts to make default unattractive to the other debtors who are struggling.

    The creditor nations in a default scenario are not without means of making a nation that defaults regret its decision.

  • Comment number 62.

    Hi Cornwall Coastal Path #57

    How would you address the issue of capital flight in your suggestions?

    DurstigerMann ahs suggested that the Euro is 20% undervalued in regards to teh German economy. If you split the Euro or re-introduce the DM then would not cash simply flow from the weak areas of the Euro zone to Germany?

  • Comment number 63.

    62. At 07:23am 8th Apr 2011, Ulkomaalainen wrote:
    "If you split the Euro or re-introduce the DM then would not cash simply flow from the weak areas of the Euro zone to Germany?"

    Is this not already the case, in the form of Germany's export market? The Euro is undervalued in Germany, and overvalued in the lesser economies of the Eurozone. I would assume that it would be detrimental to Germany to revert back to the DM, as their currency would be correctly valued and lose the export gains associated with an artificially low currency value - like the policy the Chinese have maintained with the Yuan.

  • Comment number 64.

    Portugal bail-out and after until the people which are in charge in our world understand
    that this planet belong to all and not to the Banker -edge found and definitely no to the credit rate agency and Ect. the above will be repeat time after time the time as arrive for the people to take back control of our planet.
    john

  • Comment number 65.

    #60 Huaimek

    --✄-- A dance-circle will not go round if somebody has a broken leg --✄--

    Even if with a broken leg, at the time by default a state must always try to dance (of course metaphorically speaking) in order to survive, what you prefer to do: dance alone with a broken leg or sustained by others in a circle? We Greeks prefer the second one. In the meantime we try to heal our wounds

    As for the dance-circle slowdown...i have a saying: If something "happens to everybody" it actually "never happened"

    --✄-- Never mind a referendum the people themselves may force a default--✄--

    Maybe, maybe not. The people themselves are mostly unpredictable in their choices. That is the X factor or better, the jolly card to all our poker theories said here.

    #59 Huaimek

    --✄-- BBC - Moderators !!! You are doing absolutely NOTHING to rectify the problems of our being able to post here...I have taken some time to write my post and am not going to bother to do it again --✄--

    i had the same problem ones...it seems to be a small bug for whom post more than one comment or click to the preview frequently...so i closed the tab and opened a new one (to refresh memory - i use firefox) --> navigated back to Hewitt's blog --> and pasted and submited my post again. Hope that helps you.

    Tip: remember first to write down your post in Notepad so you don't lose what you have written so far and then copy/paste to Hewitt's blog

  • Comment number 66.

    Elinas,

    With respect, I say,

    get some decent sources--gossip is the "opiate of the poor--poverty stricken"--masses in some Poor--see above--European nations--Greece is the first to enter the mind. You do know that dictator driven nations Rely on gossip for "news." It is very sadly true.

    Pay Close attention to reliable sourses--those whose facts are checked then double checked for truth--not wanna be truth but verifiable truth. There is such a thing as wishful thinking passing for truth. Then, when everything falls APART--the actual truth then appears to a person,sadly. It is Sad, but, true and only the truth will set you free.

    One can repeat slogans and ethical hopes/dreams/fantasies as "facts" until one is homeless and then.."what to do?" is one's Only question. The internet is only functional for "one" if and only if one has True Facts at ones disposal. The internet is mainly a "gossip distributor.."Only." Allyou have to do is check..it..out..to believe my statement.

    Did you know for instance, it is FEARED that China, for instance, is in the midst of an economic bubble? This was reported on C-Span, here, and that is why people in the know, (Congress) are running around like headless chickens--Here--why do you think America is considered Bankrupt? (we "owe" lots of American Dollars to China--who could Be on the verge--they steal *all information from other nations corporations to make their own corporations*...*fact--where does that leave China "at the end of the day?"

    Good fortune to you and the best--I hope, from me--of a future for you and yours,

    Sincerely,

    David

    PS..this is not new news. It is known to the best of the best minds no matter their political affiliation OR intentions OR their social OR self...interest.

  • Comment number 67.

    Oh, and very good post about saving your comments for later use.

    Further, why all the Arab uprisings? They are now risking ALL--not very much, infact, to save Themselves. In Syria, Kurds have now been allowed to become citizens--hmm do they quite possibly have some Things to contribute?

    Whichever nation Al-Jazeera does its broadcasts from is Now being allowed total press freedom--WHY is that? A person has to "gleen" info from all sources reliable to find out actual truth, maybe?

    It's a scary, rather unstable world out there. "Things true" can change daily. Remind yourself..at what cost and please Do rely on your best instincts--that voice in your head that says "what is Real?' "What is not Real?"

    Sincerely again, David

    Remember this saying, "I like you (your life), but I like me better."

  • Comment number 68.

    IE, Socialists Say pretty things that Never ..happen, ever, without other peoples earnings to finance these "pretty" things.

    Economics 101--taxes finance govt programs. Private earnings from Work and (w/negligible tax rates) corporations whom employ these workers (you and I) are Taxed--revolution, I think, yes IS similar to the word "revelation."

    Please have an "epiphany moment" ..in other words a revelation

    Or a Revolution Will come...(many, many revelatory moment(s))...in other words. Can it be more obvious?

    Funnily, I'm of like mind socially to YOU.

  • Comment number 69.

    #65 Ellinas

    Thanks for the tip . I have in the past written down my post in longhand , but recently have copied and pasted . Today the post got completely stuck and unclickable . I was able to copy , but when I returned it would not paste .
    I think what to do is to have a blank run before writing my actual comment .

    Re #60

    The Euro had built in disastrous potential even before it was introduced . I was living in Italy at the time and had the most heated arguments with Euro enthusiasts as to what effect it would have on them . The cost of living rose 30% in the first year and to 100% a year or two after . Immediately a house that had been valued at say Lira300,000 , had a price tag of €300,000 , utter madness .

    You write about we Greeks , our proverbs and sayings ; but I guess that there are Greeks and Greeks , that your viewpoint of the EU and the Euro is not the same .

    The Euro is currently the undoing of the EU and there will be no peace while it lasts . In my opinion a country could in terms of default , act like a dog when it is beaten , just to roll on its back and refuse to get up .

    I have no sympathy for the banks , governments , or any institution that is upholding the Euro . If Greece , Ireland or Portugal bankrupt them and all the stupid bond holders , so be it , bankrupt the ECB too , good ridance .
    Defaults by those countries would teach everybody in the EU a lesson ; we are being governed by stupid incompetent people who have big ideas beyond their understanding . In Europe , there is a need to stop the world , have a serious think and start afresh . Sadly , I think our rulers are all too stupid to notice that there is anything wrong .

  • Comment number 70.

    George Osbourne talks about getting spending on the ‘national credit’ card under control. But on his first day after the election he gave cross-party consent to eurozone countries running up an extra £6bn (14% of 60 billion euro) on the UK national credit card. Anyone so careless on their first day in the job does not deserve to stay in their job.

  • Comment number 71.

    The robber barons win again. After causing the financial collapse of many nations the banks line up to extort more money from the citizens and the governmental handmaidens continue to kow tow to the bankers. If the banks are not reduced in size the governments and forms of governments will not matter, they will all be owned by the banks. Greatest threat to democracy are the large banks and financial institutions. Gutless politicians continue to heap debt on citizens to feed the never-ending greed of the bankers. Once there were democracies that happened to be capitalistic...now it is capitalistic countries that happen to be democratic....this reflects the position of power.

  • Comment number 72.

    As Mr Hewitt mentioned in another article there is a General Election in Finland next week.
    Recent nights I've watched Finnish tv panels interview Political Party leaders. Last night's interviews were very revealing: One particular candidate, Timo Soini leader of the Perus Suomalainen ('True Finns' is a rough translation) was put on the spot by 2 plainly 'liberal'-leaning and sceptical tv journos.

    Now Mr Soini is also an MEP and was returned at the 2009 EU Parliament election with the largest share of the 'popular vote' in Finland. His Party has grown since then and in recent Polls appears to be in with a chance of attaining singificant Electoral support and consequently a strong position to influence a future Finland Government.

    Points from last night to keep in mind:

    1) Soini made it clear he opposes Finland contributing to any 'bail-out' of Portugal.

    2) Soini's view is the successful Finland Economy & Citizens should not have participated in the Greek 'bail-out' - - he described the decision to assist Greek Politicians who had 'lied' (his word) for 2 years with others in the 'EU also knowing this' as a disgrace - - and whilst he seemed to accept nothing could be done he was clearly unhappy and viewed the whole thing as a stitch-up by Brussels.

    3) He stressed Finland's population had far more 'urgent need' of Billions than giving them to any other EUro-zone Nation.


    All this from a Politician in a country with a record of unflinching support for the EU.

    Today I read these contributions to the 'politicking' by other supposedly hearty Finnish EU stalwarts:

    Olli Rehn, the Finnish EU Economic Minister, warned of “tough” Portuguese bail-out conditions.
    Portugal submitted a formal request for a bail-out to the European Commission this morning as Portuguese Trade Unions announced plans for more Strikes opposing 'austerity' measures. The details are yet to be confirmed, but apparently Olli Rehn suggested a bail-out of €80bn would be appropriate.


    And, another Finn...


    The Portuguese newspaper 'Público' reported that Finnish Finance Minister Jyrki Katainen declared the bail-out conditions will be “even more tough” than the last round of austerity measures, which were rejected by the Portuguese parliament.

    The Publico went on to surmise there is a risk that a Portuguese bail-out could be blocked by a new Finnish government following the elections.


    Having heard Soini's remarks IMO Publico could well be right. Now that would be a turn-up of epic proportions for the EU-Brussels entity:

    1) a staunch 'pro-EU'/'pro-EUro' Nation's Parliament refusing to contribute to the Bail-out,

    and

    2) a staunch 'pro-EU'/'pro-EUro' Nation's Parliament stopping the whole Bail-out process in its tracks.


    Of course that is all in the future: Nothing of the sort may occur (inc. True Finns getting enough seats in the Finnish Eduskunta - Parliament - to participate in Government).
    Then again, it surely does say something about EU's perilous situation for a nation like Finland to be losing patience with Brussels' high-handed (& according to the Lisbon Treaty 'illegal') Economic-Fiscal manoeuvres to save a 'zone' at least 3 & probably 2 more members are obviously unfit to be in.


    A poll this morning suggested Soini had gained ground after the interview along with the Finn's Green Party - - so, 2 sides of the perspective pulling in votes.

    Mr Hewitt wrote in his article 'Watch the Finnish election' and as Soini's support-base amongst the Finnish Electorate develops with only a week to the Election the phrase becomes even more pertinent for the EU in its dealings with Portugal and the future membership of the 'zone'.

  • Comment number 73.

    The current Portuguese government has failed over austerity cuts . I do not see how the EU can impose a bailout deal on Portugal , adding further austerity , when there is effectively only a caretaker government . A new anti-austerity government could throw out the whole package and say the people of Portugal will not conform to the bailout and further austerity .

    I am very interested that there are anti-bailout murmerings in Finland , I would like to hear the same in Germany and Britain , other countries too . If all the Eurozone countries are in debt and have to borrow to provide the bailout fund , there is going to come a point of meltdown . One can only suppose that it is a game of the cat catching its tail .

  • Comment number 74.

    I want to be more specific about previous post 38, since it has lead to some good comments and responses. In order to understand and solve the problem, we need to start by breaking the historic smoke screen of nationalism. There is no "us" the Brits" and "they the Portuguese", etc. in this current global context. There are simply those out to make money and those who will bear the consequences. The first group may be found in politics or finance and could be British, Portuguese, Americans...). The second group is made up of the average Joe who could be British, Portuguese, American...). The whole scenario has been created to cater for the interests of a few and now the so called "bail-outs", "loans", "aids"... will also improve the economic status of those who promote them. Self-interest and not the common good is at the heart of every decision, otherwise nobody would be pushing for states to accept money. All these strings of comments about "us" "our money" "you" are just short-sighted and play into the hands of those responsible for this situation. We really need to take a step back and reflect globally about what is going on here and who is really benefitting from this. If not, we will all be victims of the current economic scenario sooner or later. The domino effect will have no end.

  • Comment number 75.

    74. At 15:34pm 8th Apr 2011, victor1234 wrote:

    "..All these strings of comments about "us" "our money" "you" are just short-sighted and play into the hands of those responsible for this situation. We really need to take a step back and reflect globally about what is going on here and who is really benefitting from this..."


    Very fine sentiments.

    Now, if You could just explain to the 2 million British Parents about to have their Child Care benefits 'cut' whilst 3 Billion UK Pound is made available to 'help' Portuguese 'parents' etc. then I'd be a little more sympathetic to Your overall view?

    Or, if You prefer: Explain how it is the UK Armed Forces must face Billions in 'cuts' to 'frontline' personnel & equipment whilst engaged in 2 Combat Zones and still 3 Billion (admittedly a trifling sum by MOD standards) is made available to non-combatant Portugal?


    Maybe I'm just being a tad too subjective: So, put another way - - if 3 Billion Pound is all the UK can afford to give as part of a proposed 70 to 80 Billion 'bail-out' why bother at all?


    My record is clear on the reasons for our present Worldwide, Regional & National Economic-Fiscal debacle: Corrupt, Greed-driven, Recklessly Negligent Bankers & Investment Executives for 10 years criminally risked the World's finances for purely selfish gain.
    Not one from the UK has even been interviewed by Police never mind had to face a Court of Law.

    "..short-sighted.."? Depends on the spectacles one uses! With that in mind I say UK should put its own house in order first before indulging other Nation's needs which are no different from our own Fiscally perilous and Socially punishing situation.

  • Comment number 76.

    According to the Al-Jezeera blog, the Luftwaffe may soon be back in action over Libya.

    That would bring a wry smile to my late fathers face as he and his chums in the RAF faced off Rommels Afrika Corp all those years ago.

    Dad admired Rommel and had his book 'Desert Fox' at home, which I read as a youngster.

    The Germans are good fighters, you want them on your side.

    Here comes the Fourth Reich, not just economically and politically as the power-haus driver of the EU.

  • Comment number 77.

    75

    I don't see your point if we are actually agreeing. Of course the great majority of us are suffering the consequences caused by the greed of a minority who will never be held accountable. So, acknowledging that your comments are correct, now please expand on the following to prove I was exaggerating with "short-sighted" issue - why don't governments act against these bankers and investment executives you mention? Why does the British government participate in a Portuguese loan (which will be returned at an interest) if it can't afford to? Do you honestly think you can pull Britain out of an economic crisis with local actions only by pumping in a few million here and there in the next year?

  • Comment number 78.

    victor1234

    Re #77

    Well, I wasn't agreeing with You, I was only stating what fine sentiments they are and then illustrating why 'sentiment' in favour of Portugal or wherever at this time is not IMO in Britain's best interests.

    The EUro-zone IS NOT the UK's concern: Why should UK Citizen Tax-payers be subsidising a Monetary Union it has never been part of?
    How, with 3 EUro-zone nations already in dire straits is it to the UK's advantage to go on helping to 'bail-out' this 'zone'?
    A 'zone' that is the 'political-construct' for Financial domination of Continental EUrope and the British Isles by Paris-Brussels-Berlin otherwise known as the 'axis-of-ill-intent'.

    I refer You to Chancellor Osborne's Budget address to Parliament, "...Mr Deputy Speaker this Government has inherited the worst Economic Crisis since the end of the Second World War... the United Kingdom has a greater Debt-ratio than at anytime in its History...": I'm sorry, but it is You that must answer the question You posed indirectly in #74 and directly in #77 - - how, why, for what possible sensible purpose could the present UK Government (without any consultation or consent of the UK Citizens) be lending Money it CANNOT AFFORD to Portugal?

    The repayment with "..interest.." You write of will go to 'big-Business/big-Government' coffers - - none of it will go towards the Citizens of the UK - - the whole EU 'bail-out' is part & parcel of the same fraudulent multi-Billion expropriation of ordinary Citizen Tax-payers' money. How can You not see that?
    The Treaty of Lisbon, ratified only 15 months ago specifically forbade 'Bail-outs' by its terms - - yet, the EU & Euro-zone in their zeal to save their wretched Political necks have blatantly abandoned those terms - - Lisbon, that was supposed to be inviolate for a decade is going to have to be substantially re-written in order to make Legal the actions of 15 members of the zone and the rest complicit in this monumentally corrupt abuse of power by Brussels.

    You wrote, "..Do you honestly think you can pull Britain out of an economic crisis with local actions only by pumping in a few million here and there in the next year?"

    Well, if You consider 3 Billion as a 'few million here & there' how on that basis are You able to conclude such monies will make a difference to Portugal?
    Whereas I declare without hesitation pumping 3 Billion into Child Care costs in the UK for the next 12 month or so will be an enormous boon and boost to hard-pressed Britons & to the British Economy.

  • Comment number 79.

    When a sovereign State appeals to the financial default means that its economy no longer works.
    It means that the political class demonstrates its political inability to lead the country out of the disaster, and also loses financial credibility in front of international community, so the default is not only financial but also political.
    The country loses economic and political sovereignty.
    At this point the creditors of the sovereign State can take possession of its economy, territory and so on.
    So it works, at least in theory.

    It would be very interesting to see how the citizens of the country in default accept to lose sovereignty in their State.

  • Comment number 80.

    Sorry bout my late nite ramblings, I work for the USA govt and we are facing a shutdown unless (no working, no pay) unless agreement can be found--SOON.

    So, I get carried away. And I HATE MY JOB. What mixed feelings I have bout it.

    :))))

  • Comment number 81.

    While in Little England the euro is collapsing for the umpteenth time, in the real world things look different:

    https://www.ft.com/cms/s/0/0b8586f0-5e67-11e0-b1d8-00144feab49a.html

    "Commodities rally as dollar slumps"

    "The dollar has hit a fresh 15-month low as traders move into euros following the European Central Bank’s rate rise on Thursday. ...The euro is up 0.9 per cent to $1.4436, with traders unfussed by Portugal’s bail-out negotiations."

    @ 30 itzig66 wrote:

    "Why did the North of England not seperate from gbp in the eighties and issue it's own de-valued currency? ...Whilst an argument can be constructed that regions with different characteristics should pursue differing economic policies it seems that the majority of the comments are rather more (little englander) delight at a perceived opportunity to bash the euro and by extension the EU than considered critisism."

    After 29 posts the first intelligent comment on this entry.

    The UK economy has a one size fits all exchange rate and interest rate for two increasingly divergent economies: London and the SE vs. the rest of the country. The bogus theory that the Eurozone cannot work because of different economic performance is totally negated when you look at the UK example, a currency union and artificially created superstate, amalgamating the most divergent regional economies in the whole of the EU: check here on page 78

    https://epp.eurostat.ec.europa.eu/portal/page/portal/product_details/publication?p_product_code=KS-HA-10-001

  • Comment number 82.

    #81. At 20:48pm 8th Apr 2011, JorgeG1

    And I guess you believe Chickens cross the road to get to the other side, you are so very sad with your analyses.

  • Comment number 83.

    81. At 20:48pm 8th Apr 2011, JorgeG1 wrote:
    "While in Little England the euro is collapsing for the umpteenth time, in the real world things look different:..."



    Face it JorgeG1 if there is something worse than a "cracked record" (see Your #128 5th April) then it is Your constant 'broken record' contributions finding fault on every issue with the UK. Your default position on any and every topic raised in Mr Hewitt's articles is that the British/English are worse at whatever is the subject of debate.

    Here's some factual reality checks on Your beloved Spain:

    Near 40% Unemployment amongst Spanish under-25s.

    In contrast to most of the EUro-zone Spain's general Unemployment also rose to 20+% in the last Quarter.

    Spanish Construction Industry continues at record low level of business.

    Spain's PM Zappatero has announced he's quitting as he hasn't got any answers to a now 3-year cycle of Economic-Fiscal decline.

    Which is a wise move for a politician who has overseen Spain's collapse to where Portugal’s troubles have firmly shifted the spotlight onto Spain: Given the links between the two economies an article in 'El País' had the headline “Who’s next?”

    (PERHAPS IT REALLY IS A CASE OF ONLY THE IBERIAN PENINSULAR INHABITANTS NOT KNOWING!)

    'El Pais' article explained, "Spain is too big to fail and too big to be saved. Hence, the possibility of an attack on Spanish debt would actually pose a threat to the euro as a whole”.


    Rubbing financial-salt into Spain's flagging economy as expected the ECB has raised 'interest rates' and the 'zone' members most adversely affected will according to the Financial Times, Le Figaro, El Pais etc. be... "the peripheral economies of Ireland, Greece, Portugal and Spain."
    FT Deutschland went further and declared, '..the expected increase “could divide Europe”.' The article then added that '99% of Portuguese and 90% of Spanish mortgages are on variable rates, with an interest rate increase likely to push homeowners’ payments higher.'
    That particular aspect of the 'one-size-fits-all' ECB Interests-Rate setting process was confirmed by the Wall Street Journal which carried an article also commenting, 'in Spain, where more than 90% of mortgages are tied to short-term interest rates, a total 0.75 percentage point increase in ECB rates this year – as many analysts expect – would add almost €1,000 to the average Spaniard’s mortgage payment.'


    Still, JorgeG1 isnt worried at all because for him the obsession is Great Britain: That is the G.B. that 3 blogs ago JorgeG1 claimed was 'costing' him 'money' because it was not in Schengen and when Buzet23, I and others asked how that could possibly occur there was no reply!
    The same G.B. that JorgeG1 has repeatedly alleged is full of Far Right Wing Political supporters and when asked for evidence he quotes speeches by Le Penn & Wilders!

    Indeed, when JorgeG1 is asked for a comment on Marine Le Penn figuring in France Polls as the France Politician most likely to topple Sarkozy, he has no reply: In fact, when asked why he's so concerned and so often comments on minimal Far Right success in the UK, but has nothing to say about 20+% support across the Channel there is a deafening silence from the man from Iberia!?


    JorgeG1 is entitled to his view - - it surely does all 'anti-EU' good to read the warped imaginings - - and just to close with an uncomfortable quote from neighbour's Portugal newspaper: 'i Informação' contributed, '..that Portugal’s elections will be a referendum on bail-out arguing, “The future is far from happy. The results in Ireland and Greece are disastrous…While Europe maintains its suicidal trajectory, we cannot hope for anything more. Only in the day when Spain falls…will Europe be able to wake up”.'

    Such love between Iberian neighbours in the 'zone' brings a tear to the eye, doesn't it JorgeG1?

  • Comment number 84.

    Well, the only thing I can see that will guarantee the survival of the Euro is to split it into two - the Northern Euro and the Southern Euro, and perhaps we should name them the nEuro and the sEuro (pronounced /zero/)???

  • Comment number 85.

    Trial Run

  • Comment number 86.

    #74 victor1234

    " In order to understand and solve the problem, we need to start by breaking the historic smoke screen of nationalism. There is no "us" the Brits" and "they the Portuguese", etc. in this current global context."

    As I interpret , you are saying , we should all put nationalism behind us and accept a single state of federal Europe , as being part of the global movement ?

    I doubt that that will ever happen ; because the people love their Nation States and I believe for the most part do not want to forsake them .

    Banks and polititicians feed upon one another , govenments cannot govern without money and bankers make money from lending to governments .

    The EU is part of globalism ; a Vortex that will suck us all down if we don't stop it dead in its tracks . Problem is our politicians are too wet , blinded by the gravy train to stand their ground and say NO NO NO !!!

    The Treaty of Lisbon has already been broken , so why should anyone remain loyal to it .

  • Comment number 87.

    Re: #81 & #83

    Typical JorgeG1!

    Faced with the factual reality the Spaniard adopts the Armada-strategy: He flees in disarray to scuttle on another Blog!

  • Comment number 88.

    #81

    jorge1;

    "The UK economy has a one size fits all exchange rate and interest rate for two increasingly divergent economies: London and the SE vs. the rest of the country. The bogus theory that the Eurozone cannot work because of different economic performance is totally negated when you look at the UK example"

    Its bizarre, you correctly identify the massive divergence in economic performance between London and the rest, and then claim that the UK economy still works despite this. NO IT DOESN'T! It is simply forced to work by political considerations and government spending, economic reality plays no part in it. Outside of the South-east , only government subsidy keeps the regional economies from completely collapsing, 80% of the employment in the North and North Ireland , say, is dependent on the state sector. No wonder then that Stormont wants the economic power to set fiscal policy to differ from the rest of the UK, in order to compete with the destructive competition from low-tax Eire. For political reasons they are forced to keep monetary policy in line with the UK, but it makes no economic sense whatsoever.

    Again, you correctly assert that the UK is an artificial political construct but wrongly point to its existance as somehow validation of the EU. 21st century economic reality plays no role in keeping the UK together, its purely an 18th century political project that perhaps has run its course.

    Look at the United States. You tell the people of Michigan , or anywhere else in the rust belt, that one currency/one exchange rate/ one federal tax regime suits their economic circumstances as opposed to those of Silicon Valley or New York. They'd laugh you out of town. I guess thats why Detroit has lost 25% of its population from its peak, I dont think Europe is ready for that.

  • Comment number 89.

    The financial and sovereign debt crisis is not caused by the Euro - if anything, the Euro has protected smaller countries.

    So turning this into a Euro debate is the classic example of the hammer looking for the nail. If you are against the EU/Euro project, anything will do to criticize it. Gavin, unfortunately, seems unable to look beyond the hammer.

    The crisis is caused by the banks. They ran a giant ponzi scheme, with the help of "light regulation", rating agencies and inefficient regulators. It is a classic case of real "free market" (a figment of imagination at best).

    Smaller countries like Ireland (Belgium) Portugal etc. took on massive debt because of the banking crisis, and now find themselves unable to pay that debt.

    However, if they default, they bring on another round of bank crisis, this time in the UK, Germany, France (that's the real reason btw that the UK also provides funds for the bailout - if they don't, their own economy will also collapse).

    It has nothing to do with the benefits/deficiencies of the Eurozone per se. The only thing the crisis shows is that the Eurozone does not have all the sufficient means to tackle the problem. The moment the Euro-countries decide to issue joint Euro-bonds (and levy an EU tax, e.g. on financial transactions or CO2 emissions), the "crisis" is over.

    How could you possibly say this is a "Euro" problem, when the most important economies of the Eurozone are totally unaffected by it? It is a periphery problem.

    The risk of contagion is real, but the solutions are actually quite simple. They just demand some political courage. Oops.

  • Comment number 90.

    Ulkomaalainen, 62

    Very good questions. I personally don't see why capital flight should be an issue. People or organizations with money to invest will always seek the best return on their investments. For the sake of a healthy economy, this is as it should be, and as far as possible we should remove constraints on people having a free choice as to where to invest their capital. If any country or company or individual wants to prosper, they should put themselves in a position where anyone investing in them will get a good return on that investment. This is clearly about much more than what currency a country uses - but, other things being equal, it can't be beneficial for widely differing countries to be locked in to using the same currency merely for the sake of a grandiose and undemocratic political project.

  • Comment number 91.

    #89. At 10:21am 9th Apr 2011, Manneken,

    "Smaller countries like Ireland (Belgium) Portugal etc. took on massive debt because of the banking crisis, and now find themselves unable to pay that debt."

    You are really quite unbelievable, there was virtually nothing of substance in your post, just a repeat of the tired, failed old claim that it is all the bank's fault, and to claim the crisis is over if 'euro-bonds' were issued beggars belief that anyone can be so naive. For once get the reason for the debts right, it was not the banking crisis but the unbridled spending for political purposes of money that was being borrowed since it had not been earned by those countries. If those countries had been prudent and created a wealth by hard economics and common sense they would not need to have borrowed that money and the banks would not have been exposed after having lent money on toxic projects.

    "Smaller countries like Ireland (Belgium) Portugal etc. took on massive debt because of the banking crisis, and now find themselves unable to pay that debt."

    Belgium took on massive debt because of the banking crisis? I'm really laughing about how little you know about a country you claim to know about. The incompetent Reynders did a Gordon Brown on Belgium, and over his long spell in charge of the finances the debt has been created, this was long before the recent banking crisis that merely added to the debt with the Fortis fiasco (and others). If you want to see how Belgium's debt has been created start looking from the mid 90's up until 1999 when Reynders got control and then see the effect of his mismanagement. I'll let you do this so that you can see the truth for yourself.

  • Comment number 92.

    89. At 10:21am 9th Apr 2011, Manneken wrote:
    "The financial and sovereign debt crisis is not caused by the Euro - if anything, the Euro has protected smaller countries..."


    Your recent lamentably poor understanding and weak exposition of political 'authority' as You inaccurately attempted to proclaim the EU-Brussels entity was 'at least' as 'democratic' as Nations had me thinking I couldn't read anything more out-of-touch with factual reality.

    Then along You come with this #89 Economic-Fiscal analysis which is so woolly-minded and far-fetched wishful-thinking I'm left wondering if You got the views off the back of a cigarette pack!?

  • Comment number 93.

    If a group of people get together and put all their marbles in one bag and then begin to take out more than they put back in. Pretty soon everyone has lost his marbles. Am I right?

  • Comment number 94.

    The bail out WILL "work". It will work to cause massive inflation in the EU zone.

  • Comment number 95.

    69 Haimek

    -----------------------------------------
    House price rises had nothing to do with joining the euro. The house we bought thirty years ago for £40 000 is now worth ten times that amount and we are not in the euro. According to the house price index in the Land Registry, houses which were worth around £50 000 in 1999 when the euro was introduced, are now selling for over 100 % more. It was due to people suddenly imagining that a house should not just be a place to live and raise your family in, but a money making machine. And everyone jumped on the bandwaggon, especially the banks who threw irresponsible mortgages at anyone who came along.
    It was greed and not the euro which caused this ridiculous situation as a result of which you now have a new generation of young people being unable to afford a decent place to live

 

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