It's pretty crazy/funny that Group C managed to nab three of the PIIGS.
IIRC, Portugal and Greece (160% of GDP) has a ton of debt as well. Every single PIIGS country is in terrible shape. I guess the PIIGS acronym is quite appropriate, heh.
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Jesus is Awesome! Geaux Saints! Geaux Cajuns!
Greeks Withdraw $1 Billion a Day Ahead of Vote News Headlines
Greeks pulled their cash out of the banks and stocked up with food ahead of a cliffhanger election on Sunday that many fear will result in the country being forced out of the euro.
Bankers said up to 800 million euros ($1 billion) were leaving major banks daily and retailers said some of the money was being used to buy pasta and canned goods, as fears of returning to the drachma were fanned by rumors that a radical leftist leader may win the election.
The last published opinion polls showed the conservative New Democracy party, which backs the 130 billion euro ($160 billion) bailout that is keeping Greece afloat, running neck and neck with the leftist Syriza party, which wants to cancel the rescue deal.
As the election approaches, publishing polls is now legally banned and in the ensuing information vacuum, party officials have been leaking contradictory "secret polls".
On Tuesday, one rumor making the rounds was that Syriza was leading by a wide margin.
"This is nonsense," one reputable Greek pollster said on condition of anonymity. "Our polls show the picture has not changed much since the last polls were published. Parties may be leaking these numbers on purpose to boost their standing."
The pollster said there was some consolidation, with voters turning to New Democracy and Syriza from smaller parties but the pool of undecided voters remained unusually large so close to the election and the result was impossible to predict.
Both parties say they want Greece to remain in the single currency but Syriza has pledged to scrap the bailout agreement signed in March which has imposed some of the toughest austerity measures seen in Europe in decades.
The European Union and International Monetary Fund have warned that Greece, which has only enough cash to last for a few weeks, must stick to the conditions of the bailout deal or risk seeing funds cut off.
Euro Or Drachma Dilemma
New Democracy has been telling voters they must choose between the euro or the drachma, while Syriza promises to end the austerity measures imposed by Greece's international lenders, such as salary and pension cuts, that have driven many Greeks into abject poverty.
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"Freethought is a philosophical viewpoint that holds opinions should be formed on the basis of science, logic, and reason, and should not be influenced by authority, tradition, or other dogmas."
The last part (which I've highlighted) is most significant, and really cuts to the heart of the matter: is the Euro really a single currency, or just an exchange rate mechanism in a posh frock? If the Euro zone nations are not prepared to bail each other out as and when necessary, then it's the latter, and what we're seeing is effectively the same sort of currency speculation that drove the UK out of the ERM back in 1992 (google ERM, Black Wednesday, George Soros for a taste of them apples).
Germany is fiercely resisting these internal bailouts, whilst trying to pretend that despite this, the Euro really is a single currency. But the reality is, you can't have both. Given the differences in economic power (and fiscal control) between the likes of Greece and Portugal at one end, and Germany and France at the other, 'permanent and ongoing subsidies' might be a better description of the requirements than 'bailout', and for that reason, I think it's ultimately doomed. We might see a two-tier system, with a core of stronger economies remaining in the Euro, and a group of weaker and/or anti-federalist states as part of what should probably be called the Common Market.
Offer me solutions,
offer me alternatives
And
I
Decline
Quote:
Originally Posted by AndyG
As a group they have failed to enforce fiscal sanity on their own membership; I'm not sure they have any means to do so, even if they wanted to. But having let the situation develop, they have two choices:
1. admit they *are* a monetary and economic unit, albeit with massive regional disparities, in which case they must bail out the weaker states, with part of the price no doubt being meaningful oversight of states fiscal policy from here on in.
2. admit they are not, and dissolve the Euro or kick out the failures, letting the devil take the hindmost; which may be the hindmost 16 of the 17 states (if not all of them) but that's another story.
Germany is fighting tooth and nail against bailouts - there are stories today about proposals for a common Euro bond as the latest tool, but Germany opposes that too. In any case, I'd be surprised if they found any takers other than at unbearable rates of interest. What Germany doesn't seem to realise is that forcing states to sell bonds at >7% is no long term solution, and without other help, Greece, Italy, Spain, et al. *will* default sooner or later. Nobody else is going to come running to the rescue, so if Germany wants to keep the Euro, Germany will have to pay for it. I suspect that, while the German government wants to avoid choosing, the German electorate would go for option 1.
A tournament
A tournament
A tournament of lies
It's taken a while, but it looks as though there are signs of action in Germany.
An interesting aside: Nobel Prize winning economist Paul Krugman was doing the rounds over here a few weeks ago, promoting his new book, but he talked a lot of sense (at least, that's how I saw it). The highlight was a special edition of Newsnight (the BBC 2 'heavyweight' daily news programme). It's pretty much all good stuff, but watching him calmly dismember a Tory MP and a venture capitalist (starting about 31 minutes in), is just beautiful. Enjoy.
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"People should be encouraged to look to their own self interest, but avoid inflicting themselves on other people - especially don't inflict yourself on a schmuck. The guy has already made his choice. Cut the schmuck some slack." Frank Zappa
What choice does Germany really have? Of course they were going to relent.
That is what a single currency means.
Its similar - although a lot of differences - from how the U.S. government subsidizes the southern states.
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What choice does Germany really have? Of course they were going to relent.
That is what a single currency means.
Its similar - although a lot of differences - from how the U.S. government subsidizes the southern states.
Indeed, as I previously posted. Doing nothing wasn't an option. However, bearing in mind this thread is getting on for a year old, Angela was trying very hard indeed to do just that, not least because it looks (or looked) like electoral suicide back home.
The comment on the US and subsidies of southern states is interesting - Krugman makes the same comparison in the Newsnight video IIRC, comparing Ireland to Nevada.
I think Germany will soon start to realise just what it signed up for with the Euro, though I think in the long term, they'll be OK with it. Might take a while, though.
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"People should be encouraged to look to their own self interest, but avoid inflicting themselves on other people - especially don't inflict yourself on a schmuck. The guy has already made his choice. Cut the schmuck some slack." Frank Zappa
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