Could Italy collapse the euro?

Franz Von Peppercorn

FreudianSlippers wrote: »

So no difference. Gotcha.

Huge difference. What I suggested wasn’t a cost to the Irish tax payers.

Wanderer78

Wanderer78 wrote: »

............e stuck at lower paid jobs, many who have been working for some time are stuck in this manner, and probably never will be able to buy their own homes.............

If you're stuck in a lower paid job than the chances are you have no or useless qualifications and no trade / skill.

If someone can do your job with little training for €10/hour ish than owning a home is and always was out of reach.

Franz Von Peppercorn

FreudianSlippers wrote: »

BTW Italy was ****ed long before the Euro.

No. It wasn’t.

The devaluations of the lira worked. They made Italy more competitive every time and the small industries that keep Italy going (its a very entrepreneurial society) were able to export more. In the abscence of that mechanism those companies have folded.

Franz Von Peppercorn

Augeo wrote: »

If you're stuck in a lower paid job than the chances are you have no or useless qualifications and no trade / skill.

If someone can do your job with little training for €10/hour ish than owning a home is and always was out of reach.

House ownership was 80% at one stage. That was pretty much all workers as unemployment was 10-20% in that era.

FreudianSlippers

Wanderer78 wrote: »

i struggle to do so via text, but i do follow the work of many well respected economic commentators, some mentioned. the developments in the euro zone have been very worrying, particularly since the crash, i fear we have not addressed the underlining issues that caused it

The crash (locally) was a result of (a) the global economic crisis - intrinsically linked to, inter alia, credit default swapping and (b) a credit-fuelled property bubble.

Neither of those issues exist at the moment.

FreudianSlippers

Franz Von Peppercorn wrote: »

House ownership was 80% at one stage. That was pretty much all workers as unemployment was 10-20% in that era.

I don't believe anyone suggesting that a person making €10/hour should have a mortgage should be given serious merit for their economic views.

FreudianSlippers

Franz Von Peppercorn wrote: »

Huge difference. What I suggested wasn’t a cost to the Irish tax payers.

...except that it is.

professore

Kermit.de.frog wrote: »

I mean the Irish people collectively. Not you personally. A lot of us got caught up in it.

It pisses me off. But it is IRISH voters that did that to themselves, me, you and all of us.

The EU did not do that to us. "We" did it to ourselves.

I'm just sick of the "blame everyone else" bull**** you hear. EVERYONE knows outside of Ireland exactly what happened here.

Thankfully we are hopefully through it.

What's important is that it never happens again.

Look at property prices going mad again. "This time it's different". Sure it is.

Franz Von Peppercorn

Franz Von Peppercorn wrote: »

House ownership was 80% at one stage. That was pretty much all workers as unemployment was 10-20% in that era.

In 2004, it's under 70% now.
To be expected after a fairly serious recession.

FreudianSlippers

Franz Von Peppercorn wrote: »

No. It wasn’t.

The devaluations of the lira worked. They made Italy more competitive every time and the small industries that keep Italy going (its a very entrepreneurial society) were able to export more. In the abscence of that mechanism those companies have folded.

Great point as to why the Eurozone benefited a failing Italy.

Bilateral trade between Italy and other Member States increased 38% immediately between ERM-II and 2002, without trade diversion with non-EZ members. This is despite Italy's huge loss of competitiveness prior to entry into the EZ... frankly, there is no evidence to suggest that Italy could have recovered in the manner you suggest without entry into the EZ and I'd suggest that given the appalling state of Italy at that point in time, there is no way Italy could have survived in terms of trade against and outside the EZ.

ERM-II also undeniably curbed Italian inflation by 0.3% per annum over the 10 years after joining the EZ; in fact when you compare Italy to only non-EZ countries (which is required because there is a downward contagion impact of other more successful countries such as Sweden also pegging exchange on ERM-II) reduction in Italian inflation as a result of EZ membership was 0.7% per annum.

Italian 10-year bond yield reduced by 158 points per annum (it went from over 1% to less than 0.4% in about 3 years), resulting in interest savings of €22.5bn on government debt from 1999-2007.

Labour productivity increased (albeit nowhere near the EZ average increase)and per-capita GDP almost quadrupled.

Sounds to me like the EZ has been nothing but life-changing for a nation that was on its knees prior to joining.

Franz Von Peppercorn

FreudianSlippers wrote: »

I don't believe anyone suggesting that a person making €10/hour should have a mortgage should be given serious merit for their economic views.

Both a personalised insult and a lack of understanding of what I said.

I didn’t say that a person making €10 a hour should get a mortgage today. I said that most workers used to get mortgages. That’s a statistical fact.

FreudianSlippers

professore wrote: »

Look at property prices going mad again. "This time it's different". Sure it is.

Property prices are not necessarily the important indicator; what you should be looking at is the difference in credit between then and now. It's a massive difference.

I'm not suggesting the market isn't overheated, it is, but it's not a credit-fuelled bubble like last time. Italy is going to force a correction if they don't sort themselves out and Brexit could have a huge impact (either direction tbh) - I know I wouldn't be jumping to buy property in Ireland at the moment though.

Franz Von Peppercorn

FreudianSlippers wrote: »

Great point as to why the Eurozone benefited a failing Italy.

Bilateral trade between Italy and other Member States increased 38% immediately between ERM-II and 2002, without trade diversion with non-EZ members. This is despite Italy's huge loss of competitiveness prior to entry into the EZ... frankly, there is no evidence to suggest that Italy could have recovered in the manner you suggest without entry into the EZ and I'd suggest that given the appalling state of Italy at that point in time, there is no way Italy could have survived in terms of trade against and outside the EZ.

ERM-II also undeniably curbed Italian inflation by 0.3% per annum over the 10 years after joining the EZ; in fact when you compare Italy to only non-EZ countries (which is required because there is a downward contagion impact of other more successful countries such as Sweden also pegging exchange on ERM-II) reduction in Italian inflation as a result of EZ membership was 0.7% per annum.

Italian 10-year bond yield reduced by 158 points per annum (it went from over 1% to less than 0.4% in about 3 years), resulting in interest savings of €22.5bn on government debt from 1999-2007.

Labour productivity increased (albeit nowhere near the EZ average increase)and per-capita GDP almost quadrupled.

Sounds to me like the EZ has been nothing but life-changing for a nation that was on its knees prior to joining.

That sounds like copy and paste.

A quick glance at Italy’s historical gdp per capita growth shows that it grew at much higher levels historically prior to the euro than after it. I mean the electorate aren’t mad. They were pro European and now they are not. What happened was the reality of the euro project for them.

The euro is a disaster for the Mediterranean countries and may well be a disaster for us all

Franz Von Peppercorn

Franz Von Peppercorn wrote: »

Both a personalised insult and a lack of understanding of what I said.

I didn’t say that a person making €10 a hour should get a mortgage today. I said that most workers used to get mortgages. That’s a statistical fact.

Lots used to get council houses very cheaply. Not by means of a mortgage as such from the likes of BOI or AIB like first time buyers today.

FreudianSlippers

Franz Von Peppercorn wrote: »

Both a personalised insult and a lack of understanding of what I said.

I didn’t say that a person making €10 a hour should get a mortgage today. I said that most workers used to get mortgages. That’s a statistical fact.

I'm sorry that you take my views on your economic credibility so personally, but I stand over the point - in fact, more so now that you've clarified (?) your point.

The concept that most "workers" should have mortgages (or should have been able to get mortgages in the past) is fallacious and economically absurd.

FreudianSlippers

Franz Von Peppercorn wrote: »

That sounds like copy and paste.

It's not, but thanks I guess?

A quick glance at Italy’s historical gdp per capita growth shows that it grew at much higher levels historically prior to the euro than after it.

What it shows in terms of GDP growth is that Italy was wildly boom-bust prior to the EZ, then it went through a period of relative stability until 2008.

https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?locations=IT


You're also ignoring (conveniently) the deflation elephant in the room: https://data.worldbank.org/indicator/NY.GDP.DEFL.KD.ZG?locations=IT

The euro is a disaster for the Mediterranean countries and may well be a disaster for us all

An opinion unsourced and unsupported by even alleged "copy and paste"

jmreire

Kermit.de.frog wrote: »

Again, Irish governments elected by the Irish people facilitated feckless lending policies.

I did not see Irish people complain at the time.

So why should Germany have bailed the Irish out of that at risk to themselves?

The Irish people, this country, is 100% responsible for the mess it got itself in.

Everyone knows it except some Irish people because they are too proud or whatever.

You should be pissed off, not at Europe, but the Irish voters that put in Bertie and the rest of them that ultimately had us going cap in hand to the Brits and everyone else for a bailout.That's ours. Take ownership of it and stop bull****ting around it. You fool no one not least those outside the country. Everyone knows what happened in this country.

If it makes you feel better the Italians will suffer the same fate. Choose corruption and incompetence then take the consequences.

Kermit, first of all, who gave all this money to the Irish Banks? Christiane Lagarde has said that Ireland was loaned amounts of money far exceeding what would be considered normal lending. How and why did that happen? Had the European lending banks no regard for Banking rules and regulations? Not according to Christiane anyway.....
Secondly, I have no quarrel with letting the borrower's pay for the consequences of their borrowing. What I do object to is the fact that commercial / banking debt was transferred onto sovereign debt. Contrary to what Enda said, we all did not "Lose the run of ourselves".
So now we have the situation where anyone born now in Ireland, owes €45'000 as their "Share" of the national debt.
Kermit, in your opinion, will Ireland ever be able to reduce this debt to anything approaching normal levels, relative to GNP?
Thirdly "We get the government we voted for" That's very true, unfortunately. But don't blame the Irish people in general, they can only vote for what is presented to them.

whatstherush

jmreire wrote: »

Kermit, first of all, who gave all this money to the Irish Banks?

UK and US banks in the main, how does that fit the Germans made us do it narrative?

4068ac1elhodqr

Italy the clear favourite now, to leave the EU (and well ahead of greece).
Reckon they'll be gone before 2025.

listermint

Addyson Small Neighborhood wrote: »

Italy the clear favourite now, to leave the EU (and well ahead of greece).
Reckon they'll be gone before 2025.

I wouldnt even put a Euro on it, it would a Euro wasted

Taytoland

Addyson Small Neighborhood wrote: »

Italy the clear favourite now, to leave the EU (and well ahead of greece).
Reckon they'll be gone before 2025.

The EU project is doomed. The UK will not be the only country which has a referendum to leave. It's not workable and will eat itself.

FreudianSlippers

jmreire wrote: »

Christiane Lagarde has said that Ireland was loaned amounts of money far exceeding what would be considered normal lending.

Source?

Had the European lending banks no regard for Banking rules and regulations? Not according to Christiane anyway.....

Source?

What I do object to is the fact that commercial / banking debt was transferred onto sovereign debt.

I don't see what the reasonable alternative was - I didn't see it at the time and I don't see it now.

I've always called for some of the banks to be let go bust and, in retrospect, I don't see how that would have been awful but at the same time the blanket guarantee wasn't all that bad.

So now we have the situation where anyone born now in Ireland, owes €45'000 as their "Share" of the national debt.
Kermit, in your opinion, will Ireland ever be able to reduce this debt to anything approaching normal levels, relative to GNP?

That's based on the flawed microeconomic model being placed in a macroeconomic scale, and the assumption that follows that we need to repay this debt.

4068ac1elhodqr

listermint wrote: »

I wouldnt even put a Euro on it, it would a Euro wasted

Your right, to put 1euro on it would only return you a gross total of 2.50euro, incuding the 1euro original stake invested, so short are the odds currently.

FreudianSlippers

Taytoland wrote: »

The EU project is doomed. The UK will not be the only country which has a referendum to leave. It's not workable and will eat itself.

You're not the first person who has prophesied this in the last 11+ years I have been posting on this site. So far... not a lot have been correct.

4068ac1elhodqr

FreudianSlippers wrote: »

You're not the first person who has prophesied this in the last 11+ years I have been posting on this site. So far... not a lot have been correct.

11yrs ago, if someone told you one of the largest economies, and original fouders of the EU12 project would leave, you'd be having a laugh at them.

in 2016, the UK voted to leave. (As exactly prophesied even by the likes of Baba Vanga).

Others may also leave if it doesn't suit them. Greece came close, but now Italy are today looking at an exit procedure for the euro currency, and possibly also later an exit of the EU itself if it suits their needs better.

jimmycrackcorm

Taytoland wrote:

The EU project is doomed. The UK will not be the only country which has a referendum to leave. It's not workable and will eat itself.

There no comparison with the UK leaving as they were never really committed in the first place, hence they didn't adopt the Euro. The Italians won't leave either for the same reasons the Greeks didn't.

pixelburp

Addyson Small Neighborhood wrote: »

11yrs ago, if someone told you one of the largest economies, and original fouders of the EU12 project would leave, you'd be having a laugh at them.

in 2016, the UK voted to leave. (As exactly prophesied even by the likes of Baba Vanga).

Others may also leave if it doesn't suit them. Greece came close, but now Italy are today looking at an exit procedure for the euro currency, and possibly also later an exit of the EU itself if it suits their needs better.

Was anyone truly surprised that the UK left? That they held the referendum in the first place was merely a culmination of approximately 30-40 years of backseat driving, scapegoating, and general discontentment in working as an equal partner. Sure, there were specific instances of genuine and real concern about the direction taken by the EU, but I never considered the UK to be anything less than a slightly unwilling member of the EU from the moment they joined. Brexit was a shock, only in the sense of just how wedded they are to the propaganda of the EU as foreign, other, or some backdoor power grab by the French / Germans / Johnny Foreigner.

emo72

Back in the day I was offered a credit card with 25k on it. I already had one with a 3 k limit. I didn't want the debt. The bank rang me up and asked why I didn't come in and sign for the 25k card! Who the feck was pumping in that money to the banks that they were basically forcing us to spend it? It was madness lads, madness.

The EU is no being run in a responsible way. It'll break.

4068ac1elhodqr

jimmycrackcorm wrote: »

There no comparison with the UK leaving as they were never really committed in the first place, hence they didn't adopt the Euro. The Italians won't leave either for the same reasons the Greeks didn't.

Never committed? Denmark, Ireland and Britain joined the EEC over 40yrs ago in 1973. Later in 75 the electorate voted 'Yes' by 67.2% to 32.8% to stay in Europe.

Aside from the colour of their coinage, they were a central part of Europe and it's single market. The right to trade, live and work anywhere in the EU27. Not to mention shared defence, migration, technology, laws etc etc etc...

FreudianSlippers

Addyson Small Neighborhood wrote: »

11yrs ago, if someone told you one of the largest economies, and original fouders of the EU12 project would leave, you'd be having a laugh at them.

in 2016, the UK voted to leave. (As exactly prophesied even by the likes of Baba Vanga).

Others may also leave if it doesn't suit them. Greece came close, but now Italy are today looking at an exit procedure for the euro currency, and possibly also later an exit of the EU itself if it suits their needs better.

I'm happy to stake my reputation on this - Italy will not leave the Eurozone and/or the EU.