howard mcsweeney1- Location: Dover
- Registered: 12 Mar 2008
- Posts: 62,352
courtesy of the telegraph
With unemployment in Europe at its highest level since the creation of the single currency, resentment has been growing over whether strict budgetary discipline is the best way to brace a spiral of debt.
Street protests have been seen across Italy, Spain and Portugal as people reacted to spending cuts that have slowed economies across Europe.
Savings have been wiped out and in Spain, a real estate crash has helped swell unemployment to 25 per cent of the workforce.
Many economists have advocated a greater emphasis on growth, but it has only gained traction among European policy-makers and politicians in the past few weeks.
Paul Krugman, an economics Nobel Prize winner, welcomed the anti-austerity groundswell in Europe, saying the bloc's voters proved "wiser than the Continent's best and brightest".
Keith Sansum1
- Location: london
- Registered: 25 Aug 2010
- Posts: 23,942
we all moan about the solidarity when the french go on strike
but they dont do it in half measures.
now we see across europe countries have had enough.
here to in the U.K. its done in a different way instead of taking to the streets we see apathy at the ballot box instead
ALL POSTS ARE MY OWN PERSONAL VIEWS
Brian Dixon
- Location: Dover
- Registered: 23 Sep 2008
- Posts: 23,940
yes kieth,they seek it here they seek it there apathy is elusive,but seen here on polling days.
Guest 640- Registered: 21 Apr 2007
- Posts: 7,819
Certain EU nations as we can see will be at loggerheads as to the way forward. The Germans have already told the Greeks last night...that if they want the next tranche of their loan/bailout they will need to adhere to the austerity measures previously imposed. But...here's the thing...the Greek nation has just told their main parties where they can shove their austerity measures. So straight away we can see a clash of philosophies. The Germans are aghast.
In France we can see similar if not quite as extreme. Hollande got in on a ticket of growth above austerity..the people liked it, they voted for it. The economic crisis wasnt caused by ordinary folk and dont they know it. It was caused by amassed capitalism eating itself. The large fat man at the head table eating all the pies and eating them now...not thinking about later. We are now experiencing what came later.
howard mcsweeney1- Location: Dover
- Registered: 12 Mar 2008
- Posts: 62,352
the peasants are revolting to use the old cliche and it will spread like wildfire now that the greeks and french have set the ball rolling.
interesting that an economics nobel prize winner is siding with the masses.
Keith Sansum1- Location: london
- Registered: 25 Aug 2010
- Posts: 23,942
think it will spread,,,,
you can only push people so far,,,,,,,
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howard mcsweeney1- Location: Dover
- Registered: 12 Mar 2008
- Posts: 62,352
it will spead keith, bet your life on it.
it seems to be the young bearing most of the brunt, with unemployment high right across europe it means employers can be picky who they employ so school leavers with no work experience get left behind.
the devil finds work for idle hands.
Keith Sansum1- Location: london
- Registered: 25 Aug 2010
- Posts: 23,942
doesn't brim you with confidence howard does it?
ALL POSTS ARE MY OWN PERSONAL VIEWS
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
No matter what most of these 'anti-austerity' protesters think they cannot change the rules of mathematics, 1 plus 1 will still equal 2 and not 3.
I see that today Greek bond rates are up at 23%.
In other words, any new borrowing for deficit spending will cost, for each £100, £123. For comparison, in the UK the figure is c. £104.
That rate does not reflect any actual loosening of the austerity plan of course, it is merely reflect a concern at the instability the Greeks voted for. Any loosening that follows means will dice with a full scale economic meltdown for Greece way worse that what we have so far seen.
As for France....
They have already had a warning that their credit rating will be downgraded so any attempt to increase spending there will see a loss of confidence that will lead to significantly higher interest rates.
Yes Howard- it does seem that the young are bearing the brunt of it and that is why they need to make a more determined attack on deficits to boost businesses prospects and therefore growth. Deficit reduction is needed for any growth strategy.
Guest 698- Registered: 28 May 2010
- Posts: 8,664
Here's a possible scenario for Greece.
No coalition emerges from these elections so fresh elections are held.
No consensus emerges from those either so the generals take over again.
The new military government ditches the euro, re-issues the drachma and repudiates the country's foreign debt. Technocrats, not politicians, are appointed to ministerial posts.
Dissent is 'dealt with'.
Just like Greece in the 60s and 70s.
I'm an optimist. But I'm an optimist who takes my raincoat - Harold Wilson
howard mcsweeney1- Location: Dover
- Registered: 12 Mar 2008
- Posts: 62,352
that has always been the likely end game, ironically the leader of the neo nazi party was in the military government in the seventies.
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
I fear you may be right Peter. It really is as serious as that. Democracy in Greece, the original democracy, has failed it. A military government may be able to exert the authority to eliminate the deficit but the the real long term cost would be massive and I am not just talking about the costs associated with a brutal dictatorship in control.
howard mcsweeney1- Location: Dover
- Registered: 12 Mar 2008
- Posts: 62,352
looks like things could turn very nasty there with people like this in government.
http://www.guardian.co.uk/media/greenslade/2012/may/08/greece-press-freedomGuest 745- Registered: 27 Mar 2012
- Posts: 3,370
Or the Greeks could sell Corfu and Lesbos
Brian Dixon- Location: Dover
- Registered: 23 Sep 2008
- Posts: 23,940
to who,richard branson.or a bunch of nuns.
Guest 696- Registered: 31 Mar 2010
- Posts: 8,115
If the Greeks don't receive the bailout, they cannot possibly pay back the debts they owe, nor will they have to introduce further austerity.
Greece could cut the ball and chain of foreign EU debt by declaring the EU bankrupt.
howard mcsweeney1- Location: Dover
- Registered: 12 Mar 2008
- Posts: 62,352
i am still wondering what would happen if every country with a massive debt defaulted.
looked everywhere for an answer but only see references to credit ratings, nothing about the practicalities.
EU goes bust Germany retreats behind its financial firewall , China acts on the fact that it now owns more Dollars than the US treasury and everyone else starts praying
I am on my knees as we speak.
While I am there I could also pray I suppose.............................
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
Howard - you need to look at those organisations who have lent governments money and why they lend money to governments.
Essentially the main lender (apart from cash rich countries such as China) are pension funds. These funds need to underpin their long-term liabilities for pension payments with a low risk investment that has a guaranteed return. These are, in the UK Government Gilts or government bonds/Treasury Bills overseas.
If, as you suggest, every country with a massive debt defaulted and that would include the UK, pensioners, in fact those people now in retirement and in receipt of an annuity in particular, would be the big losers as their pension companies would go bust and payments would stop.
In theory there is a system to pick up the liabilities of pension companies that do go bust, but on the scale of what you suggest it simply would not be able to cope so millions of elderly people in the UK and abroad would be thrust into poverty. This would be a financial earthquake that would have further damaging implications for the markets and would send the whole world spiralling into the deepest slump in history. Job losses would rise and governments simply could not cope and the impact would spread way beyond the elderly.
We need governments to get a grip on their spending and to balance their budgets. The Euro is a menace that is seriously damaging the world economy and growth prospects. The simplistic view would be to consider its survival important, but that would not address the core structural defects of the currency. The political problems of changing the system so those structural problems get resolved are insurmountable - it would essentially remove the power of the electorate in weaker economies over their government's fiscal policy.
The only long-term realistic answer is an orderly break-up of the currency and an orderly, managed and limited default in some countries, allied with some realistic public spending cuts alongside policies that will help the private sector generate growth.
This whole problem is caused by poor and irresponsible fiscal management by too many countries in the UK, Eurozone and the USA. Right now the Eurozone is the biggest menace the world economy has because the UK and USA have more scope to act and more options.