On Leaving The Eurozone

[Ogiol]

Thats such a ridiculous statement I dont know where to start. First, YOU obviously dont have any contact with anyone from above the dublin galway axis right? second, you just have to bring into the equation your christian schooling, which by chance made you hate an gaeilge, which of course has nothing to do with the conservation. Go you.
and maybe, just on that point, other generations arent so Hateful toward an gaeilge because they never got the cane (or the sally rod, but maybe thats not a term u know), supose they didnt beat you for not knowing algorythms or shakespearyean poety, nah, sure that wasnt as gaeilge.

anyway, back to the point of the article that was posted by flower and others. They are pretty good in explaining the basics, and argueing those but, and yous probably know where im going with this, there is the fundamental issue of soverignty about Everything the EU or governement say. Jaysus, it is becoming a federation, which means we become a default State, not a country or Nation.
Which is ridculous if we consider that all governemnt should be going downward and not upward. (but then venezuela is a dictatorship isnt it??)

[Sidewinder]

I still don't see any other workable end result to this than the one I've been predicting for 2 or 3 years now.

The ECB is in for hundreds of billions in the PIIGS. Essentially there's been a massive game of misdirection going on with everyone made to look at phantom bondholders and new drachmas etc. When what has really been happening since 2008 is that the original banks, bondholders etc have all been repaid with imaginary fresh-printed euros.

Of the €400bn in Greek sovereign debt for example, €300bn is now owed directly to the ECB. The ECB printed around €130bn and swapped out the original bondholders in the Irish banks. Same in Portugal, Italy and Spain.

There are precious few bondholders left to burn. They've all been handed freshly-printed euros over the last 3-4 years which they have promptly washed into other assets, and it's the ECB itself which now holds the bulk of the dodgy bank debt.

The German core will be the ones who leave to a new Euromark currency (DM v2.0) while the PIIGS - and others, possibly including France - will remain in the now-worthless euro, free to inflate the debts away over the next decade or two.

It's the only solution to this I can see that makes any sense at all. Of course that means the politicians will spend another couple of years and another trillion or so on various harebrained egomaniac schemes before being reluctantly dragged kicking and screaming towards something resembling reality...

[Dr. FIVE]

before being reluctantly dragged kicking and screaming towards something resembling reality...

pffffft

[DCon]

OT a little, UK Labour want a vote on EU membership

Ed Miliband is being urged by a growing number of shadow cabinet members and senior allies to promise a dramatic in-out referendum on Britain's future membership of the European Union if Labour wins the next general election.

Several figures in the party are pushing the Labour leader to make the pledge well before the next European elections in 2014 to outmanoeuvre David Cameron, who is under heavy pressure to commit the Tory party to a national vote on the issue. The Observer has been told that, after discussions with shadow cabinet members, Miliband is leaving the door open to a referendum – although he is keen to stress that the short-term focus and discussion must be on how to end the current euro crisis.

http://www.guardian.co.uk/politics/2...hip-referendum


If it comes down to a choice between the City and the EU it will be goodbye EU, regardless of who is in power

[C. Flower]

I still don't see any other workable end result to this than the one I've been predicting for 2 or 3 years now.

The ECB is in for hundreds of billions in the PIIGS. Essentially there's been a massive game of misdirection going on with everyone made to look at phantom bondholders and new drachmas etc. When what has really been happening since 2008 is that the original banks, bondholders etc have all been repaid with imaginary fresh-printed euros.

Of the €400bn in Greek sovereign debt for example, €300bn is now owed directly to the ECB. The ECB printed around €130bn and swapped out the original bondholders in the Irish banks. Same in Portugal, Italy and Spain.

There are precious few bondholders left to burn. They've all been handed freshly-printed euros over the last 3-4 years which they have promptly washed into other assets, and it's the ECB itself which now holds the bulk of the dodgy bank debt.

The German core will be the ones who leave to a new Euromark currency (DM v2.0) while the PIIGS - and others, possibly including France - will remain in the now-worthless euro, free to inflate the debts away over the next decade or two.

It's the only solution to this I can see that makes any sense at all. Of course that means the politicians will spend another couple of years and another trillion or so on various harebrained egomaniac schemes before being reluctantly dragged kicking and screaming towards something resembling reality...

We had a thread a year or so ago on why Germany should leave. I think you contributed to it.

There are not a lot of signs of that happening at the moment and the pace of events is such (*sounds of rivets popping in the background*) there could well be a series of disorderly events with unpredictable outcomes.

Is this ECB "liquidity funding" not being counted as sovereign debt, to be repaid to the ECB?

[Yojimbo]

Very good article here from the usually reliable and incisive Michael Pettis on why Spain will leave the Eurozone:

http://www.economonitor.com/blog/201...eave-the-euro/

There is an awful amount of rubbish being talked about the possibilities of a break-up. The notion of Germany unilaterally leaving the Eurozone unilaterally is nonsense. If they did, they'd be stuck with the entire bill for every other countries debts as nobody would be able to repay loans to German banks in the new super strong DM. And German industry would be knocked back severely as they'd find it very difficult to export to the Med zone, or even to France. It is strongly in Germany's interest to keep the Eurozone going - Germany is the primary beneficiary of all those countries with overvalued currencies.

I suspect that one alternative that will increasingly raise its head is of a straight split with Spain, Portugal and Italy - and conceivably France, forming a breakaway EuroMed. Together, they would be strong enough to maintain a currency that would allow them to pay off Euro denominated debts, while having sufficient devaluation to relieve austerity. Greece would most likely end up as a sort of protectorate of Germany as part of some sort of write-off deal.

[Ephilant]

Greece would most likely end up as a sort of protectorate of Germany as part of some sort of write-off deal.

Do you think we Greeks might possibly have a say in that? And would you like to know what that is? 2 words. First one starts with "F", second one ends in "F". The suggestion alone is enough to unleash a god almighty popular uprising here. No doubt what so ever!

[Ephilant]

[fluffybiscuits]

Very good article here from the usually reliable and incisive Michael Pettis on why Spain will leave the Eurozone:

http://www.economonitor.com/blog/201...eave-the-euro/

There is an awful amount of rubbish being talked about the possibilities of a break-up. The notion of Germany unilaterally leaving the Eurozone unilaterally is nonsense. If they did, they'd be stuck with the entire bill for every other countries debts as nobody would be able to repay loans to German banks in the new super strong DM. And German industry would be knocked back severely as they'd find it very difficult to export to the Med zone, or even to France. It is strongly in Germany's interest to keep the Eurozone going - Germany is the primary beneficiary of all those countries with overvalued currencies.

I suspect that one alternative that will increasingly raise its head is of a straight split with Spain, Portugal and Italy - and conceivably France, forming a breakaway EuroMed. Together, they would be strong enough to maintain a currency that would allow them to pay off Euro denominated debts, while having sufficient devaluation to relieve austerity. Greece would most likely end up as a sort of protectorate of Germany as part of some sort of write-off deal.

Agree with you whole heartedly on the point about the Germans not leaving the union. Would be tantamount to financial suicide and as they are doing well would majorly screw up their export market. Greece will more than likely be kept in the Eurozone by the G8 at least as Greece leaving would undermine confidence more in the Euro and that would mean it becoming even more worthless. More than likely it will all stay intact but something needs to be done to rethink the debt structure. (please note I dont know enough to make a more specific statement but that is what I know based on my understanding and what I have read)...

[Hapax]

We had a thread a year or so ago on why Germany should leave. I think you contributed to it.

There are not a lot of signs of that happening at the moment and the pace of events is such (*sounds of rivets popping in the background*) there could well be a series of disorderly events with unpredictable outcomes.

Among the recent unpredictabilities, Berlusconi has now begun to tout a possible Germexit:

Either the ECB becomes the [eurozone's] lender of last resort, or the problem of Europe, or better of Germany in Europe, arises. Germany should leave the euro instead, if it doesn't agree with the ECB acting as the lender of last resort.

http://www.openeuropeblog.blogspot.c...o-to-euro.html

[C. Flower]

http://www.reuters.com/article/2012/...2F+Top+News%29

Leaked EU contingency plans for a grexit. Includes, sensibly, capital controls.

[Dr. FIVE]

Heavy on drama, light on detail with George Lee so far

[C. Flower]

Bland bank notes. Now, that really is the source of the crisis.

[PaddyJoe]

Heavy on drama, light on detail with George Lee so far

I sometimes think the sombre soundtracks that seem to be obligatory for this kind of documentary are very distracting.
George is still as good at the doom and gloom as ever, though

[Dr. FIVE]

you'd swear we were living in caves during the 90s