3 months to save the Euro according to Legarde & Soros

golfwallah

Christine Legarde tells CNN that action (in the form of clear political will) is needed within 3 months to save the Euro:

http://edition.cnn.com/video/#/video/international/2012/06/12/amanpour-lagarde-eurozone-save-euro.cnn

She goes on to say that what is needed is a combination of gradual debt reduction and growth.

Precisely how should this “clear political will” be demonstrated and what form of real action should be implemented in the forthcoming month to save the Euro?

We’ve started in Ireland, but are we doing enough?

Thoughts welcome.

Sponge Bob

What have we started, do tell us!

sarumite

golfwallah wrote: »

Christine Legarde tells CNN that action (in the form of clear political will) is needed within 3 months to save the Euro:

http://edition.cnn.com/video/#/video/international/2012/06/12/amanpour-lagarde-eurozone-save-euro.cnn

She goes on to say that what is needed is a combination of gradual debt reduction and growth.

Precisely how should this “clear political will” be demonstrated and what form of real action should be implemented in the forthcoming month to save the Euro?

We’ve started in Ireland, but are we doing enough?

Thoughts welcome.

According to the economist the Germans still don't get that they will be affected by the collapse of the Euro.

http://www.economist.com/blogs/freeexchange/2012/06/germans

Until they accept that they are in harms way, nothing is likely to change. While I can understand their current belief that they are a prudent country and why should they have to bail out the extravagant PIIGS (to use I term I personally dislike). However they were the first to break the same rules that they are now deriding other countries for breaking. I am not a fan of German bashing for the sake of it, although they are at the helm and need to change course.

jonniebgood1

golfwallah wrote: »

Christine Legarde tells CNN that action (in the form of clear political will) is needed within 3 months to save the Euro:

http://edition.cnn.com/video/#/video/international/2012/06/12/amanpour-lagarde-eurozone-save-euro.cnn

She goes on to say that what is needed is a combination of gradual debt reduction and growth.

Precisely how should this “clear political will” be demonstrated and what form of real action should be implemented in the forthcoming month to save the Euro?

We’ve started in Ireland, but are we doing enough?

Thoughts welcome.

We were told last december that the Euro would come to an end within weeks unless decisive action was taken. The same rhetoric is being spouted now . Perhaps an interesting thought would be whether 'saving' the euro is actually of benefit at this stage. If the euro is saved it means years of slow and painful austerity budgets. If the euro were to end it would mean a short sharp adjustment after which things would stabilise within 6 months. A sharp adjustment like this might allow us to sort out the real inequalities in society.

jmayo

jonniebgood1 wrote: »

We were told last december that the Euro would come to an end within weeks unless decisive action was taken. The same rhetoric is being spouted now . Perhaps an interesting thought would be whether 'saving' the euro is actually of benefit at this stage. If the euro is saved it means years of slow and painful austerity budgets. If the euro were to end it would mean a short sharp adjustment after which things would stabilise within 6 months. A sharp adjustment like this might allow us to sort out the real inequalities in society.

Yeah I don't know why people are worrying.
Shure aren't we going to have a "banking union", then there is the fiscal treaty and shure as can be shown in another thread here, all these bank failures are costing nothing, so don't worry about the Spanish banks failing.
Spain isn't that big and can be bailed out, then Italy and shure aren't the peoples of Europe crying out for more austerity like the Greeks have. :rolleyes:

AFAIk wasn't the little boy that cried wolf eventually telling the truth ?

hyperborean

jonniebgood1 wrote: »

If the euro were to end it would mean a short sharp adjustment after which things would stabilise within 6 months. A sharp adjustment like this might allow us to sort out the real inequalities in society.

In my opinion if the Euro collapses it will take 3-5 years minimum for the eurozone to recover to any sort or normality, in the mean time thousands will die in riots, healthcare will all but disappear, education will come to a standstill through strikes and general lack of money...... we could see civil war in countries like Greece, the right WILL rise on the edges and like cancer will work its way in......general mayhem will ensue and only the countries with strong militaries will have any sort of safe environment to life, these being under very strict curfew like conditions. . . (Maybe i have a vivid imagination)

Just as likely as your suggestion?

jonniebgood1

jmayo wrote: »

Yeah I don't know why people are worrying.
Shure aren't we going to have a "banking union", then there is the fiscal treaty and shure as can be shown in another thread here, all these bank failures are costing nothing, so don't worry about the Spanish banks failing.
Spain isn't that big and can be bailed out, then Italy and shure aren't the peoples of Europe crying out for more austerity like the Greeks have. :rolleyes:

AFAIk wasn't the little boy that cried wolf eventually telling the truth ?

Would you not ask the question why people are creating the fear about the end of the euro as opposed to the more incredulous situation of believing everything you hear...

Some people might say that the boy who called wolf, got his comeuppance.

average_runner

Heard all this crap last year and the year before.

meglome

jonniebgood1 wrote: »

If the euro is saved it means years of slow and painful austerity budgets.

And a leaving the euro wouldn't be painful for years?

jonniebgood1 wrote: »

IIf the euro were to end it would mean a short sharp adjustment after which things would stabilise within 6 months.

You promise?

jonniebgood1 wrote: »

A sharp adjustment like this might allow us to sort out the real inequalities in society.

I'm sure when everyone was poor we'd be a much more equitable place.

jonniebgood1 wrote: »

Would you not ask the question why people are creating the fear about the end of the euro as opposed to the more incredulous situation of believing everything you hear...

Some people might say that the boy who called wolf, got his comeuppance.

I'd imagine people are afraid as it would actually cause the shít to hit the fan. You'll find very few commentators who believe otherwise.

jonniebgood1

hyperborean wrote: »

In my opinion if the Euro collapses it will take 3-5 years minimum for the eurozone to recover to any sort or normality, in the mean time thousands will die in riots, healthcare will all but disappear, education will come to a standstill through strikes and general lack of money...... we could see civil war in countries like Greece, the right WILL rise on the edges and like cancer will work its way in......general mayhem will ensue and only the countries with strong militaries will have any sort of safe environment to life, these being under very strict curfew like conditions. . . (Maybe i have a vivid imagination)

Just as likely as your suggestion?

Is that you Enda?

hyperborean

jonniebgood1 wrote: »

Is that you Enda?

Nope, please elaborate on what makes you think that there would be a 6 month period of adjustment before a period of growth should the Euro collapse, I really am interested?

jonniebgood1

meglome wrote: »

And a leaving the euro wouldn't?

It would allow 1 large adjustment as opposed to years of it so no.

meglome wrote: »

You promise?

You are correct of course- it is unproven opinion. The same can be said for the armageddon predictions.

meglome wrote: »

I'm sure when everyone was poor we'd be a much more equitable place.

But we'd be happy:pac:

meglome wrote: »

I'd imagine people are afraid as it would actually cause the shít to hit the fan. You'll find very few commentators who believe otherwise.

Commentators believe the **** would hit the fan???
Do you promise this would happen (to ask you your own question)

jonniebgood1

hyperborean wrote: »

Nope, please elaborate on what makes you think that there would be a 6 month period of adjustment before a period of growth should the Euro collapse, I really am interested?

There would be a period of adjustment for all industry & commerce. If we are talking about a wide area then we are not talking about chaos for 5 years as people will have to get on with things (I would be interested in how you see 3-5 years being the applicable time period given that after WWII the real economies even after complete destruction had been re-established within months). It is realistic that without the infrastructure being removed that it will in the short term continue and absord the changes. I think 6 months is a fair estimate.

hyperborean

jonniebgood1 wrote: »

There would be a period of adjustment for all industry & commerce. If we are talking about a wide area then we are not talking about chaos for 5 years as people will have to get on with things (I would be interested in how you see 3-5 years being the applicable time period given that after WWII the real economies even after complete destruction had been re-established within months). It is realistic that without the infrastructure being removed that it will in the short term continue and absord the changes. I think 6 months is a fair estimate.

Are you seriously basing your opinion on a collapsing euro and re-allignment of society and economy on the post world war 2 period, I wont even bother explaining how wrong that would be......



enda
x

meglome

jonniebgood1 wrote: »

It would allow 1 large adjustment as opposed to years of it so no.

Of sure I agree there would be one large adjustment, the issue I was is the long term consequences of that adjustment. All cuts take money out of the economy which in turn leads to less tax revenue which leads to more cuts and so on. Scofflaw posted a while back about the risk of going into a downward spiral of cuts, he put it very well, can't find it at the moment.

jonniebgood1 wrote: »

You are correct of course- it is unproven opinion. The same can be said for the armageddon predictions.

It's like playing Russian roulette while saying "what can possibly go wrong" and "sure it couldn't be worse". Lots could go wrong and yes it could get a lot worse.

jonniebgood1 wrote: »

But we'd be happy:pac:

Yeah it'll be great being poor and miserable... sorry I mean happy again. Perhaps we can dig up DeValera and re-elect him while were at it.

jonniebgood1 wrote: »

Commentators believe the **** would hit the fan???
Do you promise this would happen (to ask you your own question)

I find it very hard to believe that a punt nua wouldn't fall by at least 30% on the markets. That means some lovely cold winters for a large chunk of the population with that very expensive imported oil. But they'll only be the poor, the large numbers of unemployed and the elderly so who cares.

jonniebgood1

hyperborean wrote: »

Are you seriously basing your opinion on a collapsing euro and re-allignment of society and economy on the post world war 2 period, I wont even bother explaining how wrong that would be......

enda
x

No- That is not my point.

I gave you an example of a worse situation that did not take years to recover.

jonniebgood1

meglome wrote: »

Of sure I agree there would be one large adjustment, the issue I was is the long term consequences of that adjustment. All cuts take money out of the economy which in turn leads to less tax revenue which leads to more cuts and so on. Scofflaw posted a while back about the risk of going into a downward spiral of cuts, he put it very well, can't find it at the moment.

Are we not in a downward spiral of cuts?

meglome wrote: »

I find it very hard to believe that a punt nua wouldn't fall by at least 30% on the markets. That means some lovely cold winters for a large chunk of the population with that very expensive imported oil. But they'll only be the poor, the large numbers of unemployed and the elderly so who cares.

Oil should not be a determining factor but if you want to use it as an example then fine- it needs to be considered. The discussion is in relation to the euro first of all, not just Ireland exiting the Euro. This gives a better position to start with as the market would logically need to cater for the continent. The impact of oil would be important but you should not forget that oil prices have risen by over 50% in the past few years, a larger defferencial than your 30% estimate.

ardmacha

In Germany there was a lot of economic chaos after the war until the currency reform and the introduction of the Bundesmark, so economic problems can extend beyond the immediate repairs. However, presumably there are examples like Argentina that are more relevant to currency problems than physical destruction after World War II.

meglome

jonniebgood1 wrote: »

Are we not in a downward spiral of cuts?

There are cuts but no downward spiral. They're keeping a reasonable balance so far.

jonniebgood1 wrote: »

Oil should not be a determining factor but if you want to use it as an example then fine- it needs to be considered. The discussion is in relation to the euro first of all, not just Ireland exiting the Euro. This gives a better position to start with as the market would logically need to cater for the continent. The impact of oil would be important but you should not forget that oil prices have risen by over 50% in the past few years, a larger defferencial than your 30% estimate.

You're making my point though. Yes oil prices have gone up by 50% but we've had large increases in social welfare, wages and pensions since 2000, way more than inflation. So we can absorb those increases to a degree. But if social welfare and pensions are cut by 40% and prices also go up by 30% then people are going to be very cold. Especially the ones who are now on the streets.

kennyb3

average_runner wrote: »

Heard all this crap last year and the year before.

Surely you are intelligent enough to recognise that it is the Spanish and Italian yields (the 3rd and 4th biggest economies), that make the situation real. Before it was Greece, Ireland and Portugal.

PS To those arguing about the good and bad affects of what will happen - pointless, its not like it will be a choice situation.

jmayo

jonniebgood1 wrote: »

Would you not ask the question why people are creating the fear about the end of the euro as opposed to the more incredulous situation of believing everything you hear...

As that famous spoof analyst commented on TV, there are people who will make money either way the market goes.
It is probably advantageous for some if the Euro does go pear shaped.

There is a real justifiable fear that the Euro will collapse and claiming otherwise is incredulous.
Some answer the fears by claiming it is too big to fail and that Germany won't allow it.
Well nothing is too big to fail and so far the Germans have allowed a lot happen.
There is all the waffle emminating from the EU about grand plans to ensure this situation never happens again, meanwhile people are ignoring the current situation as it slowly drags on.
That type of thinking rarely works out well.

jonniebgood1 wrote: »

Some people might say that the boy who called wolf, got his comeuppance.

And some might say the ones who dismissed him got their come uppance.

NIMAN

jonniebgood1 wrote: »

We were told last december that the Euro would come to an end within weeks unless decisive action was taken. The same rhetoric is being spouted now . Perhaps an interesting thought would be whether 'saving' the euro is actually of benefit at this stage. If the euro is saved it means years of slow and painful austerity budgets. If the euro were to end it would mean a short sharp adjustment after which things would stabilise within 6 months. A sharp adjustment like this might allow us to sort out the real inequalities in society.

But what about the massive debts countries have racked up, especially us.

Do you think that if the Euro collapses then we don't have to pay this back (meaning austerity for many many years)?

The end of the Euro will not mean the end of debt.

As for the Doomsday situation that people mention, who really knows what will happen if there is an uncontrolled collapse of the Euro? But one thing is for sure, its no good Britain, the US and China watching from the wings thinking they're on safe ground. If we go, then we're all going belly up. There will be an immediate impact on the UK and US trade, and China will suffer big as no-one is going to buy their cheap tat any more.

stackerman

NIMAN wrote: »

But what about the massive debts countries have racked up, especially us.

Do you think that if the Euro collapses then we don't have to pay this back (meaning austerity for many many years)?

The end of the Euro will not mean the end of debt.

As for the Doomsday situation that people mention, who really knows what will happen if there is an uncontrolled collapse of the Euro? But one thing is for sure, its no good Britain, the US and China watching from the wings thinking they're on safe ground. If we go, then we're all going belly up. There will be an immediate impact on the UK and US trade, and China will suffer big as no-one is going to buy their cheap tat any more.

How Can a Non-Existent Entity Bailout Spain... Or Anyone Else For That Matter?

Spain's Bailout is one big lie.

No one is asking just where this money will come from
The IMF isn't involved. Nor is the ECB.

The EFSF, which can't even raise €10 billion without having to step in to insure it doesn't have a failed bond auction isn't a possibility (Germany doesn't want it).

That leaves just the European Stability Mechanism (ESM)... except for the little known fact that only FOUR of the necessary 17 EU members have ratified legislation to even CREATE the ESM.
The ESM doesn't even EXIST yet.

On top of this, Spain and Italy make up 30% of the ESM's supposed "funding." That's right, nearly one third of the mega-bailout fund's capital will come from countries that are bankrupt themselves and are either already requesting bailouts (Spain) or soon will be (Italy).

Finally, and this is the REAL problem with the ESM... Germany hasn't OK'd it yet. In fact, German opposition leaders have stated point blank that hoping for Germany to ratify the ESM before its due date (July 1) is "completely unrealistic."

So... Spain is going to be bailed out by a non-existent entity whose leading member likely won't even have ratified its formation... before July 1.

Sure things could play out differently. But wasn't Spain literally on the verge of a systemic Crisis? And we're talking about weeks... possibly months before it gets a single Euro in bailout funds (assuming the funds even show up at all).

So I ask again... WHERE is the money going to come from? It doesn't exist. The whole Bailout is one big lie. The funds simply are not there.

Even if they were, €100 billion is NOTHING compared to the REAL capital needs of Spanish banks. Bankia alone needs €24 billion... and that's just ONE BANK out of Spain's €3 trillion banking system.

If you think we're out of the storm yet in Europe, you're in for a very VERY rude surprise. It's quite likely the EU won't even exist in its current form before the summer ends.

The simple reason... THERE AREN'T ANY FUNDS LEFT TO PROP UP the €46 TRILLION toxic sewer that is the EU banking system.

As for the UK and the US sitting on the sidelines :rolleyes:
They are in an even worse situation, they are like the bold school kids, keeping their head down while their buddy takes the rap (for now).
This whole mess will come home to roost where it started, their turn is coming and soon. When it does all hell will hit the fan - we will have a inflationary depression thanks to all the debt and the endless printing of money. Just MHO, so don't blast me for it.

Im not looking for a doomsday situation, I just think its staring us right in the face. I cant see any other way out
- We cant grow out of it (FAR too much debt)
- We cant print our way out of it (but they will try)
- And I don't see any hunger for debt right off (until it all too late)

Interesting times

Lantus

hyperborean wrote: »

In my opinion if the Euro collapses it will take 3-5 years minimum for the eurozone to recover to any sort or normality, in the mean time thousands will die in riots, healthcare will all but disappear, education will come to a standstill through strikes and general lack of money...... we could see civil war in countries like Greece, the right WILL rise on the edges and like cancer will work its way in......general mayhem will ensue and only the countries with strong militaries will have any sort of safe environment to life, these being under very strict curfew like conditions. . . (Maybe i have a vivid imagination)

Just as likely as your suggestion?

I'd have to agree. It's hard to predict exactly what would happen but I dont think the average person has any real comprehension of the turmoil the country would be thrown into. The FIAT currency we carry in our pockets has no value except the 'agreed' market values that exist in a stable economy. When you pull out the rug and replace it with another currency and default on you debts the effects could well be awful.

As others have said we would need to balance our books in one day which would require a correction so extreme the knock on effects could well plunge the country into a spiral of economic and social collapse as thousands are let go from the public sector and we face possible scenarios like 1 in 4 hospitals and schools, garda stations being closed overnight. Social welfare changed for food and fuel tokens.

There would be high likley hood of severe social unrest which would be unpleasant. Our primary food distrubition networks across europe would be distrupted as currency exchange mechanisms would be in such a state of flux there would be no sense of value on anything. A hungry population has little to lose.

We should never of bailed out our banks. It's a mistake our childrens children may have to live with.

I hate the idea of the euro and I dont see within 25 years how it will be stable or functioning correctly. A debt laden beast.

Every man woman and child in europe has effectivley become a paid slave of the banking sector and the IMF, our freedoms rights and priviledges only exist if we work without question for the rest of our lives with little to look forward to in paying back a debt that no single person is even responsible for.

golfwallah

Sponge Bob wrote: »

What have we started, do tell us!

You can read about the actions outlined in the EU/IMF Programme for Financial Support for Ireland (December 2010) and quarterly reports against targets / milestones (since April 2011), as signed by our Minister for Finance and Governor of the Central Bank, on the Department of Finance website: http://www.finance.gov.ie/viewdoc.asp?DocID=6856

This material is rather detailed, but if you take a bit of time to go through it, you will see what progress is being made (despite all the hoo-hah about stuff like household charges, water charges, etc.).

Whether this progress is enough or not is an open question.

golfwallah

Ain’t it funny how quickly a discussion on how to save the Euro can quickly focus mainly on the impact of its collapse?

Saving the Euro can’t be down solely to what Angela Merkel and the German population want or are used to – other countries, including ourselves, also have responsibilities – if we want economic stability.

It’s almost as if the actions / changes needed in each country are ok for the Germans but “too hard” for the rest. It’s much easier to label all changes as “austerity”, when in reality these changes are a combination of reducing avoidable costs (with the minimum possible impact on the majority and vulnerable people who can’t help themselves) and increasing government income through taxation, etc.

It seems to me that helping ourselves is the best option – even if this means living up to the conditions to which we ourselves (i.e. the state acting on our behalf) have agreed in the EU/IMF MOU of December 2010 and subsequent quarterly progress reports.

Inertia or doing nothing is always the preferred option – it avoids the problem of upsetting some people in the short term. Unfortunately, it leaves us with the existing and growing debt problem that will affect everyone in the long term.

As always, it’s about choice. There are things each country can do – very few of these things are universally popular. I’m not sure if there are any proposals on carbon taxes in the EU/IMF Programme for Financial Support for Ireland, but Christine Lagarde thinks this is one of the “decisive steps” that could be taken: http://articles.economictimes.indiatimes.com/2012-06-13/news/32215449_1_euro-zone-financial-stability-pricing.

And, no, I’m not Enda.

Lantus

golfwallah wrote: »

Ain’t it funny how quickly a discussion on how to save the Euro can quickly focus mainly on the impact of its collapse?

Saving the Euro can’t be down solely to what Angela Merkel and the German population want or are used to – other countries, including ourselves, also have responsibilities – if we want economic stability.

It’s almost as if the actions / changes needed in each country are ok for the Germans but “too hard” for the rest. It’s much easier to label all changes as “austerity”, when in reality these changes are a combination of reducing avoidable costs (with the minimum possible impact on the majority and vulnerable people who can’t help themselves) and increasing government income through taxation, etc.

It seems to me that helping ourselves is the best option – even if this means living up to the conditions to which we ourselves (i.e. the state acting on our behalf) have agreed in the EU/IMF MOU of December 2010 and subsequent quarterly progress reports.

Inertia or doing nothing is always the preferred option – it avoids the problem of upsetting some people in the short term. Unfortunately, it leaves us with the existing and growing debt problem that will affect everyone in the long term.

As always, it’s about choice. There are things each country can do – very few of these things are universally popular. I’m not sure if there are any proposals on carbon taxes in the EU/IMF Programme for Financial Support for Ireland, but Christine Lagarde thinks this is one of the “decisive steps” that could be taken: http://articles.economictimes.indiatimes.com/2012-06-13/news/32215449_1_euro-zone-financial-stability-pricing.

And, no, I’m not Enda.

Agreed as well. To show I do actually have a +ve view on this!

Germans are pretty upset as all the bailouts on what they perceive as wasteful, inefficient and lazy countries who dont really deserve to be bailed out. And to a degree they have a good point.

Ireland has an incredibly wasteful and beaurocraticly complex state network that could easily be cut if we took a very pragmatic and hard headed approach.

Starting from the top down at TDs wages and obscene salaries and expenses to getting rid of the silly charges they pay for biscuits and cleaning. Massive simplification of our state bodies.

We need to have a huge debate on wat exactly a government should provide and the extent of their powers. We cannot have it all unless we are willing to pay for it. Tax revenues should alwasys provide a % surplus IMHO for rainy day funds and replacment of essential items like infrastructure akin to a sinking fund that managment companies must provide.

There are hard decisions to be made in how we reconcile the -ve costs of rural ireland with the eastern belt and other large towns and cities that are cost effective due to scales of economy.

Local coco's should be all but abolished as the duplication across all counties is simply sickening and totally inefficient (and zero democratic.) Instead we could divide the country into say a 6 distinct regions that have elected officals to govern pulled from the residents who live there. They would be ltd companies and bound by company law to provide services.

The quango and currently unaccountable state must die and be reborn but it can be done.

Our beloved leader Enda is nothing more than an interim caretaker who having being in politics for his entire life has no vision or ability to see what must be done.

jank

jonniebgood1 wrote: »

There would be a period of adjustment for all industry & commerce. If we are talking about a wide area then we are not talking about chaos for 5 years as people will have to get on with things (I would be interested in how you see 3-5 years being the applicable time period given that after WWII the real economies even after complete destruction had been re-established within months). It is realistic that without the infrastructure being removed that it will in the short term continue and absord the changes. I think 6 months is a fair estimate.

The UK had rationing up until 1952. Not exactly a return to normal circa 1939.
It is very conceivable that we could have a lost decade or two if the euro goes caput. Ireland just needs to be ready for whatever direction it goes in. That's all we can do, ride the wave and hope we survive.

superluck

Soros just said the world will explode next week...we'd better listen.

golfwallah

Lantus wrote: »

Agreed as well. To show I do actually have a +ve view on this!

Germans are pretty upset as all the bailouts on what they perceive as wasteful, inefficient and lazy countries who dont really deserve to be bailed out. And to a degree they have a good point.

Ireland has an incredibly wasteful and beaurocraticly complex state network that could easily be cut if we took a very pragmatic and hard headed approach.

Starting from the top down at TDs wages and obscene salaries and expenses to getting rid of the silly charges they pay for biscuits and cleaning. Massive simplification of our state bodies.

We need to have a huge debate on wat exactly a government should provide and the extent of their powers. We cannot have it all unless we are willing to pay for it. Tax revenues should alwasys provide a % surplus IMHO for rainy day funds and replacment of essential items like infrastructure akin to a sinking fund that managment companies must provide.

There are hard decisions to be made in how we reconcile the -ve costs of rural ireland with the eastern belt and other large towns and cities that are cost effective due to scales of economy.

Local coco's should be all but abolished as the duplication across all counties is simply sickening and totally inefficient (and zero democratic.) Instead we could divide the country into say a 6 distinct regions that have elected officals to govern pulled from the residents who live there. They would be ltd companies and bound by company law to provide services.

The quango and currently unaccountable state must die and be reborn but it can be done.

Our beloved leader Enda is nothing more than an interim caretaker who having being in politics for his entire life has no vision or ability to see what must be done.

Agreed and although we have to sort out domestic fiscal issues, there are much wider pan-European considerations to avoid Eurozone meltdown.

A consensus is emerging that drastic change has to happen to save the Euro. Some think that it isn’t worth saving and we’d eventually get over the pain of collapse and start growing GDP again after a very short period. But this ignores the disastrous effect such a collapse would have on pension funds, savings, share values, etc. – in fact, any form of wealth, other than gold, oil or other natural resources.

Comparisons with previous currency break-ups are invalid because the European economy is so highly financialised – much more than in the former Soviet Union or Argentina. A collapse of the Euro would be the single biggest destructive event since World War 2, much bigger than some people have been saying – so says Dan O’Brien in the Irish Times today: http://www.irishtimes.com/newspaper/finance/2012/0615/1224317984078.html.

To summarise, he feels we are running out of time on the Euro and are faced with Hobson’s choice – either Euro meltdown or fiscal and banking union and, maybe, much closer European integration might not be the bad thing a lot of people fear. Good article – certainly worth a read!

stackerman

Last line is the thruth
" At this juncture almost any price is worth paying to prevent collapse."

This is why masive printing, "world rescue package", QE, call it what you like, WILL happen. Iflation (higher) will follow. Governments currently trying to say inflation is low :eek:, the man on the street can see through that !
So what sort of real inflation figures will we have when the printing really ramps up ? A depression, along with high inflation rates, low interest rates, and further falling house prices. Punish the savers, tax payers, and pay the banks Ain't going to work.

I don't believe that fiscal union will work within the Euro, with is current membership.

golfwallah

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stackerman wrote: »

Last line is the thruth
" At this juncture almost any price is worth paying to prevent collapse."

This is why masive printing, "world rescue package", QE, call it what you like, WILL happen. Iflation (higher) will follow. Governments currently trying to say inflation is low :eek:, the man on the street can see through that !
So what sort of real inflation figures will we have when the printing really ramps up ? A depression, along with high inflation rates, low interest rates, and further falling house prices. Punish the savers, tax payers, and pay the banks Ain't going to work.

I don't believe that fiscal union will work within the Euro, with is current membership.

I’ve just heard some interesting insights from guests on this morning’s George Lee / “The Business” programme on RTE radio – all good stuff to help see our way out of the current crisis.

Points to come out were:

• Pessimistic outlook for Greece with all parties promising to renegotiate their MOU, something they will be unable to deliver. Optimistic about a government being formed but whoever ends up in charge will face an uphill struggle. Greeks want a European standard of living but with Greek levels of productivity and dysfunctional tax system – but faced with the stark choice between the Euro and Drachma, will reluctantly take the medicine required to stay in the Euro.

• Spain adopted Eurozone requirements for low inflation, but along with others had non-working bank regulation.

• Germany has an aging population with a lot of savings, but also with an historic aversion to inflation. They don’t want to allow inflation to fritter away their life savings and, who can blame them? History has also given them an aversion to being in a position of leadership, which has now been thrust upon them. Angela Merkel, coming from the rule-bound background of East Germany, does not have the Western European experience required to take Europe out of its current crisis.

• The only leader currently emerging to help resolve the crisis is Mario Draghi, ECB President. Although unelected he is making noises about some measure of quantitative easing and interest rate reduction to help in this regard.

Interestingly enough, the attached article of a few hours ago is about Draghi promising joint vision of the Euro within days: http://www.businesspost.ie/#!story/Home/News/Draghi+promises+joint+vision+on+euro+%22in+days%22/id/19410615-5218-4fda-ec55-5f2566481222