Could Italy collapse the euro?

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.

But the Italians are thinking of ditching the Euro, so that will make them just as comparable to the UK if they do.

Beppe Grillo tells the BBC that he wants a referendum in Italy on leaving the euro as soon as possible.

Taytoland

jimmycrackcorm wrote: »

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.

The youth unemployment in the EU is diabolical and the youth compared to the UK is highly skeptical of the European Union. As I said, the UK will NOT be the only country in the next 20 years to hold a referendum and leave. Everything about the EU tells me it doesn't work and the currency certainly doesn't work for millions of young people all over Europe.

Many said the UK wouldn't leave the EU even on the day of the vote and look what happened. The Italian electorate voted for parties which are Euro skeptic. That tells me everything I need to know, the people aren't happy.

FreudianSlippers

emo72 wrote: »

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.

You...

You do know that...

*sigh*

You do know that you don't have to spend credit. Having a 25k credit limit is not the same as having 25k in debt.

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

How so?

And before you make a private debt / government debt analogy, please let me go ahead and just tell you that's nonsense off the bat. Countries aren't and shouldn't be run like your household.

4068ac1elhodqr

FreudianSlippers wrote: »

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

Chances are you said the very same thing about Trump and Brexit, probably had a good laugh at anyone who differed your opinion on this.

Whilst I was happy enough to ignore the pollsters and paid for media to back Mr Trump at 11 and Brexit at 3.6.

Italy will very likely leave before 2025, the odds are so short that it's not even worth backing now.

FreudianSlippers

Addyson Small Neighborhood wrote: »

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...

The UK has never been committed to the Eurozone and I don't think it's a good analogy to compare a Eurozone member leaving to the UK.

FreudianSlippers

Addyson Small Neighborhood wrote: »

Chances are you said the very same thing about Trump and Brexit, probably had a good laugh at anyone who differed your opinion on this.

Nope.

Italy will very likely leave before 2025, the odds are so short that it's not even worth backing now.

Would love to know who's paying those odds - not a gambler in the traditional sense but I'd put a few grand against Italy leaving before 2025.

I should also point out that you probably shouldn't be clamouring for Italy to leave the Eurozone before 2025 (and the collapse of the EZ at the very least). Not sure what you do for a living, but it would be disastrous for the economy of Ireland.

4068ac1elhodqr

FreudianSlippers wrote: »

The UK has never been committed to the Eurozone and I don't think it's a good analogy to compare a Eurozone member leaving to the UK.

Reckon having access to a single market, along with all that goes with that (laws, trade, freedom of travel and employment), is much more signficant that just having a shared unit of currency.

FreudianSlippers

Addyson Small Neighborhood wrote: »

But the Italians are thinking of ditching the Euro, so that will make them just as comparable to the UK if they do.

Beppe Grillo tells the BBC that he wants a referendum in Italy on leaving the euro as soon as possible.

You seem to be a bit behind the times on this. Grillo has backed down from this position, the referendum was not included in their manifesto and such a referendum is not possible under Italian law.

In fact, today, La Stampa is reporting:

5SM reiterates that «Savona calling for Italy to quit the euro» is the «biggest fake news in history». The 82-year-old Economist repeated on Sunday, «I want a different Europe, one that is stronger but fairer. I believe in European political union».

4068ac1elhodqr

FreudianSlippers wrote: »

Nope.
Sure, sure.... so you though Trump and Brexit were very likely well before they occured?

FreudianSlippers wrote: »

Would love to know who's paying those odds - not a gambler in the traditional sense but I'd put a few grand against Italy leaving before 2025.

Only two books offer this market, won't specify as the odds are too short to encourage anyone. You can probably 'lay' the Italy market using exchanges and a direct request, but wouldn't recommend that either.

FreudianSlippers wrote: »

I should also point out that you probably shouldn't be clamouring for Italy to leave the Eurozone before 2025 (and the collapse of the EZ at the very least). Not sure what you do for a living, but it would be disastrous for the economy of Ireland.

My opinion is of no actual influence on this event, I'm not Merlin the Wizard.

I'm merely stating likelyhood, not desire. The EU has and is being severly mismanaged, hence the events that are/have been occuring.

The biggest risk to Irelands economy is actually tax-harmonisation from the EU. Doubling the Corp Tax to 23%, will see Ire's growing economy dissapear overnight, and all those foreign mn's jump ship.

FreudianSlippers

Addyson Small Neighborhood wrote: »

Only two books offer this market, won't specify as the odds are too short to encourage anyone. You can probably 'lay' the Italy market using exchanges and a direct request, but wouldn't recommend that either.

Shorting China will make more money anyway. I was being glib.

My opinion is of no actual influence on this event, I'm not Merlin the Wizard.

I'm merely stating likelyhood, not desire. The EU has and is being severly mismanaged, hence the events that are/have been occuring.

My opinion is that your opinion on the likelihood is incorrect. Historically, my track record on this website in relation to this topic has been 100% in the face of many people "merely stating the [likelihood of the EU/EZ collapsing]"

Furthermore, I'd suggest that although you correctly note that you're not Merlin the Wizard you certainly seem to be portraying your opinion to be factual rather than a wish or knee-jerk opinion.

Do I think that Italy is ****ed? Yep.
Do I think that they will try the whole Greece model? I'd bet on it.
Do I think that they will succeed? I do believe they will partially succeed in that the EU will assist them.
Do I think that they will leave the Eurozone/EU? Nope.

The biggest risk to Irelands economy is actually tax-harmonisation from the EU. Doubling the Corp Tax to 23%, will see Ire's growing economy dissapear overnight, and all those foreign mn's jump ship.

I don't disagree with this in theory; but I don't think this is as much of a done-deal as Euro-sceptics seem to believe it is. Either way, EZ collapse would be worse than this unlikely event.

jm08

Addyson Small Neighborhood wrote: »

The biggest risk to Irelands economy is actually tax-harmonisation from the EU. Doubling the Corp Tax to 23%, will see Ire's growing economy dissapear overnight, and all those foreign mn's jump ship.

Why would they jump ship to another country in the Single Market if there is tax harmonisation?

FreudianSlippers

Taytoland wrote: »

The youth unemployment in the EU is diabolical and the youth compared to the UK is highly skeptical of the European Union.

Youth unemployment in some parts of the EU is pretty bad, but it's not correct to state this is the case "in the EU" as a whole.




That being said, I'm not exactly clear on how this is a result of membership of the Eurozone or the EU... can you explain that to us?

FreudianSlippers

FreudianSlippers wrote: »

.............I'm not exactly clear on how this is a result of membership of the Eurozone or the EU... can you explain that to us?

Quite likely a "dey are taking our jobs" type speel.

FreudianSlippers

jm08 wrote: »

Why would they jump ship to another country in the Single Market if there is tax harmonisation?

The theory is that they would move to Eastern countries with lower costs of living and employment (as well as more relaxed employment legislation). I'm not convinced, personally, that harmonisation is likely in the first place... let alone the theory.

Wanderer78

FreudianSlippers wrote:

The theory is that they would move to Eastern countries with lower costs of living and employment (as well as more relaxed employment legislation). I'm not convinced, personally, that harmonisation is likely in the first place... let alone the theory.

Maybe we should investigate the benefits of something like a 'sovern wealth fund' just encase tax harmonisation is enacted across the EU?

FreudianSlippers

Wanderer78 wrote: »

Maybe we should investigate the benefits of something like a 'sovern wealth fund' just encase tax harmonisation is enacted across the EU?

Absolutely and, to be honest, I always presumed that was the end-game for NAMA anyway. Unfortunately, I think that the general public are a little too economically unsophisticated to understand the value of a SWF (and not to mention that NAMA hasn't looked ideal in their transparency with regard to sales of distressed assets to so-called vulture funds, regardless of whether these sales were appropriate or beneficial).

hatrickpatrick

Kermit.de.frog wrote: »

Ireland's problems were created in Ireland.

The EU did not elect our governments.

Irish people need to take responsibility for their own actions. Why should a German taxpayer bail out Paddy who put themselves in the situation they found themselves? Why would Germany take the consequences of feckless decision making in Ireland? Let the banks go seems simple - until you realise it weakens every bank in the eurozone and puts those countries at risk. That's systemic risk.

Why should any member of the public have to pay other peoples' / companies' private debts?

If the political/economic system is dependant on private actors, but those private actors don't actually have to put the good of that system first on their list of priorities, then the system is total bullsh!t and should be changed. Simple as. That's not going to happen as long as the ECB with its ideology of "we don't do the job of a central bank" exists. It was a moronic set-up from the get go and as far as I'm concerned, if it collapses, the short-term pain will be worth the long-term consigning to the dustbin of the idea that signing away a country's monetary sovereignty to an organisation which literally doesn't give two sh!ts about the actual everyday lives of that country's citizens.

As far as I'm concerned this is all a pipe dream anyway tbh. The ECB and the politicians in charge have conclusively shown that they'd rather keep shoring up a sh!ttily constructed ship rather than build a new one which might not actually need to keep being shored up. So be it, alas. In my view, this is like driving a car which is so old and dilapidated that it needs to be serviced every six weeks to avoid breaking down, but refusing to even consider that it might just be time to scrap it and look at replacement vehicles.

jm08

FreudianSlippers wrote: »

The theory is that they would move to Eastern countries with lower costs of living and employment (as well as more relaxed employment legislation). I'm not convinced, personally, that harmonisation is likely in the first place... let alone the theory.

Eastern European countries are too unstable. Latvia has a corporate tax rate of 15% and while it does well, I don't think it has taken any FDI companies from Ireland.

Companies like Apple & Intel have put huge investment into Ireland - can't see them moving to eastern Europe because the cost of living is much lower for now.

FreudianSlippers

hatrickpatrick wrote: »

Why should any member of the public have to pay other peoples' / companies' private debts?

Because of the bigger picture at the time - burning the bondholders and letting all of our banks fail was not a valid option when you view the global economic collapse.

In isolation, it's arguable that we could have done this and survived; now I don't think it's a good argument and we can see that Greece has decided not to do this despite Syriza promising that they would. It turned out that once they looked into how catastrophic it would be, they didn't do it.

A difficult decision was made to effectively socialise the debts in order to ensure that Ireland (a) had banks (b) could "keep the lights on" and (c) could ever legitimately return to the market.

That being said, I don't think we actually should ever repay the debt. Leave it there - no harm - if there is another global economic crisis, it won't make a blind bit of difference if we've paid it down a bit.

FreudianSlippers

jm08 wrote: »

Eastern European countries are too unstable. Latvia has a corporate tax rate of 15% and while it does well, I don't think it has taken any FDI companies from Ireland.

Companies like Apple & Intel have put huge investment into Ireland - can't see them moving to eastern Europe because the cost of living is much lower for now.

Totally agree with you, I was just acting as a vessel for the alternate theory in terms of the dangers of harmonisation.

IMO the real danger in harmonisation is the unprecedented and (IMO) unwelcome step to a broader EU/EZ tax code which specifies rates as opposed to rules which still allow Member States to set their own rates within those rules (see for example: State Aid rules).

hatrickpatrick

FreudianSlippers wrote: »

Because of the bigger picture at the time - burning the bondholders and letting all of our banks fail was not a valid option when you view the global economic collapse.

In isolation, it's arguable that we could have done this and survived; now I don't think it's a good argument and we can see that Greece has decided not to do this despite Syriza promising that they would. It turned out that once they looked into how catastrophic it would be, they didn't do it.

A difficult decision was made to effectively socialise the debts in order to ensure that Ireland (a) had banks (b) could "keep the lights on" and (c) could ever legitimately return to the market.

That being said, I don't think we actually should ever repay the debt. Leave it there - no harm - if there is another global economic crisis, it won't make a blind bit of difference if we've paid it down a bit.

And your post exposes that the way the monetary and political systems are constructed is morally unjust on a fundamental level. It needs to be redesigned so that if a private company gambles and loses, the only victims of the resulting fallout are those with a direct interest in that private company, not an entire country. To put this another way, any system which leaves me open to a drop in quality of life because BOI fails, despite the fact that I chose to put my own trust in AIB and have no involvement whatsoever in BOI, is extremely f*cked up and immoral.

lawred2

DubInTheWest wrote: »

I wish

Weird thing to wish for

FreudianSlippers

hatrickpatrick wrote: »

And your post exposes that the way the monetary and political systems are constructed is morally unjust on a fundamental level.

*shrug*

It is what it is and it's extremely unlikely to ever change unless we get to Star Trek status where money is just done away with.

It needs to be redesigned so that if a private company gambles and loses, the only victims of the resulting fallout are those with a direct interest in that private company, not an entire country. To put this another way, any system which leaves me open to a drop in quality of life because BOI fails, despite the fact that I chose to put my own trust in AIB and have no involvement whatsoever in BOI, is extremely f*cked up and immoral.

No amount of redesign is going to fix this problem honestly.

In terms of your example, if letting BOI burn results in AIB being unable to discharge its debts to you, then the only option is to save BOI to save AIB to save the people who have money in both institutions.

It's oversimplification of the situation (and of macroeconomics in general) but I think it works as an example.

hatrickpatrick

FreudianSlippers wrote: »

*shrug*

It is what it is and it's extremely unlikely to ever change unless we get to Star Trek status where money is just done away with.

People said the same about the Eighth Amendment. This is a democracy, the people can choose to change any aspect of how the state is run if enough people get behind that change.

No amount of redesign is going to fix this problem honestly.

In terms of your example, if letting BOI burn results in AIB being unable to discharge its debts to you, then the only option is to save BOI to save AIB to save the people who have money in both institutions.

It's oversimplification of the situation (and of macroeconomics in general) but I think it works as an example.

Unless we did away with the private nature of banking altogether and required it to be a non-profit enterprise, where the banks are run as public services with the good of the nation in mind, even if it means the individuals running it don't make as much money. I've been advocating this for years - something as fundamental as the system of money supply should not be in private control.

We're getting off topic with this though - as it pertains to this topic, my issue with the Euro is the ECB's refusal (and indeed its inability due to its founding rules) to perform its function and engage in monetary financing to shield the public from the fallout of private bullsh!t. It's like asking Conor McGregor to fight but tying his hands behind his back. Terrible, terrible system to build a continent-wide system of currency on.

In a system which functioned properly, a systemic private bank collapsing would result in the central bank sorting it out, with no involvement of taxpayer's money at all to begin with. It should have been for the central bank to figure out how to repay depositors and wind down a bank like Anglo, not the government using public money.

FreudianSlippers

hatrickpatrick wrote: »

People said the same about the Eighth Amendment.

They're nothing alike at all.

This is a democracy, the people can choose to change any aspect of how the state is run if enough people get behind that change.

I'm not sure how any vote in Ireland or elsewhere that will change the way the global economic market operates.

I'm not suggesting you're being naive, but I'm not sure what you're hinting at is at all realistic.

Unless we did away with the private nature of banking altogether and required it to be a non-profit enterprise, where the banks are run as public services with the good of the nation in mind, even if it means the individuals running it don't make as much money. I've been advocating this for years - something as fundamental as the system of money supply should not be in private control.

See above.

We're getting off topic with this though - as it pertains to this topic, my issue with the Euro is the ECB's refusal (and indeed its inability due to its founding rules) to perform its function and engage in monetary financing to shield the public from the fallout of private bullsh!t.

In a system which functioned properly, a systemic private bank collapsing would result in the central bank sorting it out, with no involvement of taxpayer's money at all to begin with. It should have been for the central bank to figure out how to repay depositors and wind down a bank like Anglo, not the government using public money.

Again, the global economic market disagrees with you on this both in practice and in theory.

ECB monetary financing is, frankly, a terrible idea and it's not the purpose of the ECB. I would have thought you were in the camp of less centralised power also?

Icepick

Wanderer78 wrote: »

Initiatives such as austerity

Some countries actually did not reform much if anything, including Italy. Ireland needs to reform more too - welfare system, public sector...

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.

sources?

Taytoland

Addyson Small Neighborhood wrote: »

FreudianSlippers wrote: »

Nope.
Sure, sure.... so you though Trump and Brexit were very likely well before they occured?

FreudianSlippers wrote: »

Would love to know who's paying those odds - not a gambler in the traditional sense but I'd put a few grand against Italy leaving before 2025.

Only two books offer this market, won't specify as the odds are too short to encourage anyone. You can probably 'lay' the Italy market using exchanges and a direct request, but wouldn't recommend that either.

FreudianSlippers wrote: »

I should also point out that you probably shouldn't be clamouring for Italy to leave the Eurozone before 2025 (and the collapse of the EZ at the very least). Not sure what you do for a living, but it would be disastrous for the economy of Ireland.

My opinion is of no actual influence on this event, I'm not Merlin the Wizard.

I'm merely stating likelyhood, not desire. The EU has and is being severly mismanaged, hence the events that are/have been occuring.

The biggest risk to Irelands economy is actually tax-harmonisation from the EU. Doubling the Corp Tax to 23%, will see Ire's growing economy dissapear overnight, and all those foreign mn's jump ship.

Leo Varadkar turns Ireland into a place attractive for corporations to skive away from paying as little tax as possible and get's praised for it. It beggars belief.

Icepick

^^ sources?

Wanderer78

hatrickpatrick wrote:

Unless we did away with the private nature of banking altogether and required it to be a non-profit enterprise, where the banks are run as public services with the good of the nation in mind, even if it means the individuals running it don't make as much money. I've been advocating this for years - something as fundamental as the system of money supply should not be in private control.

Maybe we should create a public banking system that can operate along side our existing private system, but prioritises public needs in its operations?

Icepick wrote:

Some countries actually did not reform much if anything, including Italy. Ireland needs to reform more too - welfare system, public sector...

There's no conclusive evidence to support austerity actually benefits society, mark Blyth has done some great research on this

emo72

Just listening to a report on this on newstalk. This looks very ominous. The president took a gamble and blocked the appointment of a minister. The parties are doing their nut. He reckons of they go to the people because of this the Eurosceptics will win 80% of the vote. That's not his guess, that's an encumbent party member.

The blocked minister never claimed to be a Eurosceptic, he just believes the EU needs to be reformed, that's not an extremist view really. The ****e could actually hit the fan here!