Re: The Eurozone Thread

[Sabot]

The Exchange Rate is fractionally better for me today, which is hopefully the day on which my pension will be transfered from UK.
This means that The Euro has taken a very slight knock against The Pound.

[bb1]

I blame Merkel and Sarkhozy for a lot of the anger in Greece, personally.

Merkel started it with the 'war' business - whatever she meant, it was a PR disaster. Then he topped it off by insulting Greece just as Greece was celebrating the anniversary of them going to war on the Italian Fascists in 1940.

I suspect the final straw was Germany 'finding' £48 billion it just happened to have languishing in the bank, forgotten. As you do - who hasn't totally forgotten about the odd billion or two?

[Lamplighter]

I don't read the papers, bonny, as I find the lies and misinformation far outweigh the truth. Even the news on TV is far from correct. I blame the Greeks themselves for not paying their taxes - they have the worst record in Europe for avoiding paying their dues. There was a lady on TV a few days ago who say basically the same thing, that Greeks were to blame for the mess they are in, and she was Greek. Blame should not be laid entirely on Merkel or Sarkozy, even though their remarks were ill-advised; they did not encourage the Greeks to overstretch themselves, nor did they suggest in the beginning when they joined that the Greeks should cook the books. LL

[bb1]

Thing is, the Greek government weren't elected to keep assorted international financiers happy - they were elected to keep Greek citizens happy.

I don't blame them for fiddling the books, it goes with the territory. I blame said international financiers who didn't bother to check.

Greeks, gifts and all that...

[Lamplighter]

Thing is, the Greek government weren't elected to keep assorted international financiers happy - they were elected to keep Greek citizens happy.

I don't blame them for fiddling the books, it goes with the territory. I blame said international financiers who didn't bother to check.

Greeks, gifts and all that...

At present the Greek govt is hanging on a by a thread - only two MPs more than their rivals. Was three but one resigned this yesterday or this morning. And a poll yesterday showed that at least 70% of the country opposes the bailout and the austerity measures. Either way this is going to end in tears. LL

[bb1]

I am trying - and not really succeeding - in following the various nuances of this, LL:

http://news.sky.com/home/business/article/16100920

The only thing certain is it ending in tears. I really do not see any way the euro can stagger on like this for much longer.
Time, as ever, will tell.

[Lamplighter]

I am trying - and not really succeeding - in following the various nuances of this, LL:

http://news.sky.com/home/business/article/16100920

The only thing certain is it ending in tears. I really do not see any way the euro can stagger on like this for much longer.
Time, as ever, will tell.

Don't worry, bonny, you are in good company, most people can't follow it either! I admit to being pro-Europe, but then I am half-European so that's no surprise. But I have never been pro the Euro, I always considered it a risky gamble, and it looks like I have been proven right. We will just have to sit, wait and watch. LL

[lily]

I remember when the UK had to devalue the pound. It was painful but life carried on. So, it seems to me that things were simpler before the EU and the euro? What a mess.

[bb1]

I just can't help feeling that, if they left the euro, countries like Greece, Portugal, etc., would definitely struggle for a while, but that would pass if the drachma or escudo was allowed to trade at a realistic level - as it used to.
As it is, they are going to struggle anyway, with no end in sight and little control over their own financial affairs.

Bankers, financiers, etc, would no doubt be screaming blue murder and predicting the end of the world as we know it, but they're doing that anyway.

I'm with LL - I was in favour of the Common Market, indeed, anything that keeps the nations of Europe from each other's throats. The euro is a different matter altogether, and the current situation doesn't seem to be in anyone's interests, apart from bankers and financiers.

[lily]

The euro is a different matter altogether, and the current situation doesn't seem to be in anyone's interests, apart from bankers and financiers.

Just like casino odds then?

[Lamplighter]

The euro is a different matter altogether, and the current situation doesn't seem to be in anyone's interests, apart from bankers and financiers.

Just like casino odds then?

An experiment that failed, lily, due to lack of foresight and planning! LL

[lily]

I fear that the bankers et al see it differently LL.

[bb1]

Think Ponzi scheme, Lily....

[lily]

[sans_souci]

I just can't help feeling that, if they left the euro, countries like Greece, Portugal, etc., would definitely struggle for a while, but that would pass if the drachma or escudo was allowed to trade at a realistic level - as it used to.
As it is, they are going to struggle anyway, with no end in sight and little control over their own financial affairs.

Bankers, financiers, etc, would no doubt be screaming blue murder and predicting the end of the world as we know it, but they're doing that anyway.

I'm with LL - I was in favour of the Common Market, indeed, anything that keeps the nations of Europe from each other's throats. The euro is a different matter altogether, and the current situation doesn't seem to be in anyone's interests, apart from bankers and financiers.

I agree with that Bonny. It is not possible to operate a single currency with disparate economies. There was an early version of a single european currency, called the ECU. (European Currency Unit). This was designed to be a stable single currency for cross border and international trade, with each the currency of each country floating against it. To my mind this would have provided many of the advantages of the Euro but without the straightjacket that is the Euro.

For example, Greece would have been at liberty to devalue the drachma, and become a cheap tourist destination. Of course imports would be more expensive, as they would have to pay more for their ECUs in order to buy good abroad. But their exports would be cheaper and more competitive and therefore provide a way of trading their way out of trouble. Much as we have done.

[lily]

It is not possible to operate a single currency with disparate economies. There was an early version of a single european currency, called the ECU. (European Currency Unit). This was designed to be a stable.......

It's a real pity that they didn't go that route to begin with. The ECU sounds like it was a really good solution to that problem, sans.

[bb1]

[lily]

Oh dear.

[muratfan]

Oh dear.

I know Hugh Grant a father

[lily]

How did you guess mf?

Seriously, we know that Greece will pull through this. It is never good, however, to read news like that.

[bb1]

I really don't think that those two 'summoning' the Greek PM is the most diplomatic thing to do right this minute...

[muratfan]

Why don't the Germans just invade Greece and be done with it....didn't the Germans threaten war the other week?

[muratfan]

Maybe i can help out

[lily]

I think you are right, Bonny.

http://www.businessweek.com/news/2011-11-01/merkel-sarkozy-press-greece-to-stick-to-bailout-before-g-20.html

(Updates with Sarkozy comment in third paragraph, Italian meeting in fifth.)

Nov. 1 (Bloomberg) -- European leaders pressed Greece to uphold the terms of a five-day-old bailout in a bid to stop the deal unraveling on the eve of a global summit, after Prime Minister George Papandreou said he’d put the plan to a referendum.

German Chancellor Angela Merkel and French President Nicolas Sarkozy held emergency talks on Greece today and called on Europe to implement the package of measures thrashed out in Brussels last week.

The referendum proposal “surprised all of Europe,” Sarkozy told reporters in Paris. “The plan adopted unanimously by the 17 members of the euro area last Thursday is the only possible way to resolve the problem of Greek debt.”

The plan, designed to aid Greece and stem the wider debt crisis, is “more necessary than ever today,” Merkel and Sarkozy said in a joint statement issued in Berlin and Paris. Germany and France “are convinced that this agreement allows Greece to return to lasting growth” and want to draw up a road map for locking in the second Greek bailout.

Italian Prime Minister Silvio Berlusconi separately called an emergency meeting with ministers tonight in Rome to discuss austerity measures after Italy’s 10-year borrowing costs climbed to the highest levels relative to German bunds since before the creation of the euro.

Papandreou Announcement

Papandreou’s unexpected announcement that he will hold a confidence vote and referendum threatens to overshadow a Nov. 3- 4 Group of 20 summit in Cannes, France. European leaders had designated the talks as a stage to present their plan to stamp out the crisis and end the threat to the global economy.

Crisis talks will in effect start the meeting one day early, as Merkel and Sarkozy are due to meet with European officials and International Monetary Fund representatives in Cannes tomorrow, according to their joint statement. Papandreou, whose country is not a G-20 member, will also travel to the French resort tomorrow, a Greek official said. He will then speak in the Greek parliament Nov. 3 during the vote of confidence.

‘Fully Trust’

“We fully trust that Greece will honor the commitments undertaken in relation to the euro area and the international community,” European Council President Herman Van Rompuy and European Commission President Jose Barroso said in a joint e- mailed statement that acknowledged Greece’s move.

EU officials had hoped to use the Oct. 27 rescue agreement, which includes renewed commitments to fiscal austerity as well as new rescue resources, to anchor their economic agenda at the G-20 summit. Now, officials meeting as the confidence vote plays out in Athens will be called on to assess the deal’s -- and the euro’s -- future, especially if Papandreou’s government falls and Greece comes under more pressure to default or leave the common currency.

“Uncertainty and fear is palpable,” Marc Chandler, chief currency strategist at Brown Brothers Harriman in New York, said by e-mail. “The political cost of the economic austerity does not appear fully appreciated by policy makers or investors.”

Sarkozy was due to meet with Prime Minister Francois Fillon, Finance Minister Francois Baroin, Budget Minister Valerie Pecresse and Bank of France Governor Christian Noyer at 5 p.m. today to discuss Greece. Le Monde newspaper, citing unnamed people close to Sarkozy, said that he was “dismayed” by the Greek plan.

Papandreou Popularity

The Greek prime minister’s personal and government popularity have plunged as cost-cutting measures have sparked a wave of social unrest. The Greek leader announced a confidence vote yesterday that will conclude late on Nov. 4. The referendum would probably be held after the details of the European accord are worked out.

European leaders agreed to boost the European Financial Stability Facility’s firepower to 1 trillion euros ($1.4 trillion), set aside 100 billion euros for Greece and provide 30 billion euros in collateral for a debt swap that will give Greece’s investors new, lower-risk bonds at 50% of the existing bonds’ face value.

The Institute of International Finance, a Washington-based banking group that took part in the debt swap negotiations, affirmed its commitment to the Oct. 27 agreement. “We will work closely with the Greek authorities, euro-area officials and other relevant parties to agree on, finalize and move toward implementation of the details of the voluntary private-sector involvement,” the IIF said in an e-mailed statement today.

Greek Debt

The deal to reduce Greece’s debt load will do nothing to aid the country’s recovery from recession, opposition New Democracy leader Antonis Samaras said on Oct. 27. Papandreou’s majority meanwhile slipped to two today amid a party rebellion.

Whether the EU’s plan would succeed “was a matter for debate. But at least there was a plan,” Yiannis Koutelidakis of Fathom Financial Consulting in London, said in a note. “The risks engendered by this move are profound for the euro in general, not just for Greece as the expulsion of any one member state would critically undermine the Economic and Monetary Union.”

EU officials are now delving into the logistics of how to execute the new plan, such as the precise terms of the debt swap and operations under the rescue fund’s expanded scope. Barroso and Van Rompuy said they expect to discuss the debt crisis “in the margins” of the G-20 meetings. They spoke with Papandreou by phone, their statement said. Papandreou spoke with Merkel today, a Greek official said.

Greece’s Decision

Greece’s decision to call a referendum blindsided its European partners and placed another hurdle in the way of efforts to stanch the debt crisis, according to German lawmakers and others monitoring European developments.

The announcement came “out of the blue, it’s surprising, very risky,” Norbert Barthle, the ranking member of Merkel’s Christian Democratic Union on parliament’s budget committee, said in a telephone interview. “There’s an enormous amount at stake. Do we know how the Greek people will treat their government in this referendum? No. We have a new unknown.”

--With assistance from Tony Czuczka and Brian Parkin in Berlin, Marcus Bensasson in Athens and Simon Kennedy and Mark Deen in Paris. Editors: Alan Crawford, Kevin Costelloe

To contact the reporter on this story: Rebecca Christie in Brussels at rchristie4@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.

[bb1]

Why don't the Germans just invade Greece and be done with it....didn't the Germans threaten war the other week?

And Sarkozy picked the anniversary of Greece defying Mussolini in 1940 to insult Greece last week.

All on top of this uproar last year...

'The Nazis took our gold, they should at least thank us': Greek deputy PM's extraordinary attack on Germany over debt crisis
By MAIL FOREIGN SERVICE
Last updated at 9:46 AM on 25th February 2010

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Nazi theft of Greek gold during the Second World War is to blame for the country's faltering finances, Athens claimed yesterday.
It came as new protests about the economy turned violent.


Read more: http://www.dailymail.co.uk/news/article-1253416/Greece-accuses-Germany-wrecking-economy-Nazi-occupation-debt-ridden-nation-hit-strikes.html#ixzz1cV3slc3d

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