http://www.bbc.co.uk/news/19537693I thought this was interesting but some of it was way out of context. What caught my eye was:
However, a return to the Deutschmark would make German-made goods more expensive overseas and within the eurozone which could hurt German exporters.A real solution to that would be to downgrade the Deutschmark like the Swiss downgraded the Swiss-Franc and then trading and exporting would be a success. Unfortunatly, most of Europe provide more goods than what we do so the Germans would need to do that so the likes of Mercedes can keep selling their cars successfully.
My Uncle is half German and he went out there recently on a week's holiday, what amazed me was that he found out that the German banks were paying out no interest whatsoever. The reason being is that Germany is taking control of bailing out Greece, Italy and Portugal. I did not know whether to laugh or cry. The fact the German goverment wants to stablise the Euro and wants to save the Euro when the German people are constantly fed up of bailing out other Countries and want a return to the Deutschmark.
What made me laugh was a lot of Germans said to my Uncle that Great Britain made the right decision not to join the Euro. Thank goodness for that otherwise we would have been in worst state than what we are in now.
Comments
However, Germany's failure to publically support the ECB's recent initiative to invest in Government Bond markets in the periphery, ie the Bundesbank sniping from the bushes, is entirely counterproductive. Europe is a real mess, but the recession now in prospect might have been avoided if the blockheads in Berlin had behaved with a bit more intelligence and subtlety. That's Soros's message.
You're right that what southern Europe needs is a boost to demand and this can only come from Governments; infrastructure spend is an obvious strategy because it can be argued that it benefits future generations.
Mario Draghi crossed one Rubicon last week and now Europe needs to cross the next one. We need less austerity not more and that means bigger deficits in the near term. That applies to the UK too of course, though George Osborne is still trapped in the wrong paradigm and we probably need to see the back of him before we get a more appropriate policy emphasis here.
German bankers are afraid of writing a blank cheque via common eurobonds for deficit countries so all they can ask for is rules on banks and national deficits...it will be expensive but a lot,lot cheaper than splitting up.
As MF states deflating is obviously wrong even if it suits some in Germany... the only way out is growth and inflation...to reduce the ratio of debt to GDP... and the sooner they print some money, the sooner youth unemployment will stop growing...
Sooner or later they are all going to realise that structural reforms, raising retirement ages and selling off state assets is the only way forward - irony is that when you aggregate the whole of Europe it ain't a basket case BUT the problem is will richer countries agree to permanent subsidies to poorer regions? I think I heard that in the US the poorer states effectively get a 5% subsidy from richer parts
When you try to save one Country, Europe gets lumbered financially and of course the Euro credit rating would decrease. It's obvious the real German people don't like it when their own goverments try to bail out other Countries because it is certainly not doing them any good. Banks don't pay out any interest and I bet there is loads of other related issues that is affected by this.
The Euro should have originally been setup where you get Countries who are in the same league as each other like France, Austra, Germany and even us not Italy, Portugal, Spain and Greece. I would not want us to join the Euro because I want our own goverments to run our own ecomony and not the team from Brussels and I bet most other European's feel the same way about their own.
And I agree that disaster is possible - hopefully this is focussing people on solutions especially closing down the prison of youth unemployment
If you are looking to buy a house in Spain, i would suggest you hold on !
This thing you call "the EU". I'm just wondering... Is it actually a group of human beings? I suppose so because you say they have a dream. So where do they come from? France, Germany, Netherlands, where? Its just that, when British Eurosceptics say 'they' want to take away all our (British) powers, then presumably "they" want to take it away from the French, Germans, Dutch, etc, too. So who are 'they'?
Having said that, one of my friends who is an international businessman and describes his political views as 'just to the right of Genghis Khan' thought a few years back that Labour had made a mistake and we should have been in the Euro, so I'm not sure it's as simple as a Tory vs Labour argument. His reason was that, as an exporter to Europe his biggest unknown and something that could wipe out his profits at a stroke, was the various exchange rates for the differing currencies. Obviously having the same currency removes that risk and also takes away the costs involved in exchanging money.