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RE: Fareed Zakaria on the Germans' role in the Greek tr... - 11/5/2011 4:09:02 PM   
calamitysandra


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Status: offline 		It should. But the Euro was his brainchild (at least, that seems to be how he felt). He was willing to go to quite some lengths to see his vision come true.

All that said, it took some time getting used to, but I quite like the Euro.  

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RE: Fareed Zakaria on the Germans' role in the Greek tr... - 11/5/2011 4:19:11 PM   
Ninebelowzero


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Status: offline 		I haven't got a problem with the Euro just the member states that weren't fit for purpose. It was when I saw who was going to join the club that I thought it a bad idea.

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RE: Fareed Zakaria on the Germans' role in the Greek tr... - 11/5/2011 4:45:08 PM   
calamitysandra


Posts: 1682
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Status: offline 		Around the time that the Euro did go live I had a newborn. I honestly have only blurry memories of the starting phase.

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RE: Fareed Zakaria on the Germans' role in the Greek tr... - 11/5/2011 6:03:43 PM   
Politesub53


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Joined: 5/7/2007
Status: offline 		As I have said before, it was clear from the start that to have one common currency, you needed one common fiscal policy, there is no other way it could have worked. Right from the start Germany and France were in competition to call the shots. Germany then did okay from exports to Greece who were borrowing hell for leather on the back of cooked up books. Greece still has a vibrant tourist trade, even I the rest of EU have cut back a tad on holidays in the last year. Greece also still has the worlds largest merchant navy, tonnage capacity wise, so it isnt all doom and gloom for them. The problem they have is that they need to accept some severe measures to secure a loan from the European Central Bank (ECB) who are presently unwlling to part with the funds. A serious tax evasion problem is also part of the problem in Greece.

In turn, the ECB want the IMF to lend the Greeks the cash instead. Obama anf the UK have said this wont happen, the ECB is the correct vehicle to do this. I cant find a full video of Obamas G20 speech in Cannes on Friday, but he was very clear about this. he also pointed out some pertinent fact to the Republicans in Congress, especially in the Q&A session.

Greece has two options, it can accept the austerity measures and borrow from the ECB, or it can default and do a deal with the IMF. The EU would be better off in the long term if it did the later, the problem being France and Germany are holding huge amounts of Greek debt. The UK holds some and the US holds a fraction. I think the French are more open to the Greek economy as a whole. The Germans hold the most Greek government debt, but not so much Greek private debt.

Italy have a large manufacturing base, but a fragile economy, not helped by a 6% and upwards interest rate on its debt. This is why they have asked the IMF to install observers to check the Italian austerity measures are sufficient. I think Berlusconni needs to go before things start to improve there. Long term they should be okay but short term they are in a precarious state. Ireland is currently making slow but sure progress to recovery. Portugal isnt doing so good though and remains stagnant.

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RE: Fareed Zakaria on the Germans' role in the Greek tr... - 11/5/2011 6:10:53 PM   
Ninebelowzero


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Status: offline 		So basically the bail out is a method to reduce France & Germany's debt exposure?

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RE: Fareed Zakaria on the Germans' role in the Greek tr... - 11/5/2011 6:21:22 PM   
Politesub53


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quote:

ORIGINAL: Ninebelowzero

So basically the bail out is a method to reduce France & Germany's debt exposure?



You could see it that way I guess. I think the bailout is more to do with shoring up the idea of the Eurozone (Not the EU)

France and Germany have more to lose than anyone else if Greece defaults. Their many worry though would be any domino effect that would cause. From remarks made by Merkel and Sarkozy this week, they both seem ready to cut any further loses.

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RE: Fareed Zakaria on the Germans' role in the Greek tr... - 11/5/2011 8:43:52 PM   
FirstQuaker


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Status: offline 		One fiscal policy is half the equation. The other source of trouble is letting each of EU members engage in diplomatic matters independently, at least things like trade agreements, open borders arrangements, commodities trading and brokering etc.

Most of modern diplomacy is economic. Contrast how the US or Canada (or China, OZ etc.as far as it goes) does things where the central government is the master of such things.

Alberta and Alabama don't get to "print" money or run "central banks," and neither can make their own diplomatic agreements regarding trade, tariffs, immigration, Forex and commodity trading things, foreign investment etc.

Hard to impose fiscal discipline when anyone in the EU can go "Trade with the enemy" with impunity. and usually for their immediate profit and often as "import brokers" and or "remarketeers" to get around what other EU members have done to protect themselves..

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RE: Fareed Zakaria on the Germans' role in the Greek tr... - 11/6/2011 4:12:33 AM   
Politesub53


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Status: offline 		Agreed but while you can contrast how the Eurozone operates with the US and Canadian system, you cant equate it. The difference with the EU is it is made up of severeign states with differing goals, both political and economical. It is almost impossible to have a common open borders policy, as economic migrants will hardly make for anywhere but the UK, France and Germany. It would hardly be fair for the rest of the EU to impose policy while it doesnt actually affect them directly. It would be akin to South America joining with the north as some super Americas union, and Bolivia and Chile fixing US and Canadian policy.

The whole idea of the EU, was to be a trading zone with neutral playing fields. What has occurred is some members seem to be wanting a giant superstate. Anyone with half a brain knows that will never work, since there are far too many nations involved. If you take Greece as one example, the whole mess they have is due to the adverse reaction of the socialists, since shaking off the chains of a right wing military junta. Greek policy has gone from one extreme to the other and needed to have found the middle ground, sadly they didnt do that.

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RE: Fareed Zakaria on the Germans' role in the Greek tr... - 11/6/2011 6:43:11 AM   
Toucan


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quote:

ORIGINAL: Ninebelowzero

It stands to reason that the Chinesae won't because if they do then they can't shore up the $ & then the US goes into meltdown. So choices choices folks. Who do the Chinese sell more stuff too?

Answers on an American postcard please.


I wouldn't worry about the USA. We have more then enough food production and we are sitting on the largest oil reserves on the planet between the Dakota's and Alaska(which is way larger then the gov will admit). And that is all that matters: Food and Oil. Heck China in the near to distant future will be demanding it's loans back from the USA: In food.  You have to understand that there is only three way's to generate wealth: You grow it, mine it, or build it.

The EU is up a creek though.. They have food production, but very little in the way of energy reserves and aside from Germany... No real Industry. And socially, Europe is more messed up then America. Men in many EU want nothing to do with their womenfolk. Look at Sweden.  More Swedes marry foreigners then they do other Swedes. The EU will merely be annexed into Russia's new Euro-Asian Federation they are trying to build.

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