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Thread: Germany 'wont give more to EU bail-out fund'

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    Re: Germany 'wont give more to EU bail-out fund'

    Quote Originally Posted by German guy View Post
    I really hope the EU will survive, ideally in a better form than it used to be. Wouldn't be a bad side effect if this crisis could result in a better EU than the one we used to have.

    The possibility of the EU falling apart, on the other side, worries me. Despite all its flaws, it was the best historical answer we have to centuries of bloody wars and division.
    I have thought that the EU had benefitted Europe. As an outside observer, it appears the heavily indebted countries are essentially demanding more investment from their partners than is justifiable given their own efforts and contributions. Is austerity the answer or is the problem caused by the structure? I am reading that Greece has too many gov't giveaways. Maybe the same for the other PIGS. Is that true?

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    Re: Germany 'wont give more to EU bail-out fund'

    Quote Originally Posted by DaveFagan View Post
    I have thought that the EU had benefitted Europe. As an outside observer, it appears the heavily indebted countries are essentially demanding more investment from their partners than is justifiable given their own efforts and contributions. Is austerity the answer or is the problem caused by the structure? I am reading that Greece has too many gov't giveaways. Maybe the same for the other PIGS. Is that true?
    I have to admit economics is not my specialty and it's hard for me to estimate all the connections in this economic mess. But from what I've gathered, yes, I believe that's more or less the case: Greece and other "PIIGS" spent like drunken sailors. That was still more or less okay, until the financial crisis hit in 2008/09. This pushed them over the edge and brought Greece into a situation where they could no longer borrow cheap money and their household exploded.

    So the economically stable countries, especially Germany, were asked to aid Greece, but naturally, they are reluctant, because they want to see Greece taking the necessary measures of austerity.

    On the other side, Germany's attempt to bail out Greece are maybe partly egoistic after all: The aid would allow Greece to pay back some debts for the moment, which in case of bankruptcy would be lost -- but who would receive these paybacks? German and France banks, mostly. If Germany let Greece go bankrupt, chances are we'd see another banking crash like in 2008, because German banks would get problems the moment the money they lended Greece was gone.

    So I am not sure if Merkel is really doing all this bailing out because she's a convinced pro-European, or simply because she don't want to deal with German banks going bankrupt after a Greece default.
    "Not learning from mistakes is worse than committing mistakes. When you don't allow yourself to make mistakes, it is hard to be tolerant of others and it does not allow even God to be merciful."

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    Re: Germany 'wont give more to EU bail-out fund'

    Quote Originally Posted by cpwill View Post
    truth. let your yes be yes and your no be no.

    as for the EU, it will not survive in it's current form. there simply isn't a way to bail out a structural defect - someone somewhere will have to go.
    And this is your problem... the EU has NOTHING TO DO WITH DEFICITS... countries within the EU have run deficits for decades (as well as surpluses) and other than an agreement to not go over 3% which everyone broke, then the EU has no power or interest in how a country runs its business.

    The problem now is uniquely to the Eurozone. Countries within the EU have had horrible deficits and it has not had any impact on their membership. The lists include the UK, Poland, Hungary, Austria, France, Italy, Denmark, and so on and so on. Now the problem comes with the Eurozone since they have the same currency and not a fully integrated economic system and yes here you could see countries leave the Euro so they can piss in their pants again.. aka devalue a new currency.

    But this comes with consequences for everyone and is very expensive and frankly can be much more expensive than fixing their structural problems. Spain, Italy and others are doing so.. the problem is Greece where the population have had enough of big business, bankers and the rich ****ing up their economy for profit and letting the rest of the population pay for it. Most Greeks understand that they need to change their ways (tax collecting and so on) and accept this, but not if the attitude and usual suspects dont also change, and so far they have not seen so which pisses them off.

    Again the EU will not break up. The Euro will stay in some sort of form and the Greek problem will get fixed some how most likely with a structured default. The only real question is when the European politicans will get their hands out of each other asses and start playing hardball with the Anglo-American speculators and financial institutions who have a large part of the blame for the financial crisis and have yet to pay for it. Personally I want prison terms for top executives of the big American banks, financial institutions, AIG and frankly some politicans for allowing an unregulated sub-prime mortgage market to even exist... but I know fully well that will never happen in the current political climate in the US.
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    Re: Germany 'wont give more to EU bail-out fund'

    Quote Originally Posted by German guy View Post
    I have to admit economics is not my specialty and it's hard for me to estimate all the connections in this economic mess. But from what I've gathered, yes, I believe that's more or less the case: Greece and other "PIIGS" spent like drunken sailors. That was still more or less okay, until the financial crisis hit in 2008/09. This pushed them over the edge and brought Greece into a situation where they could no longer borrow cheap money and their household exploded.
    Again no they did not all spend like drunken sailors. Deficits exploded because of the US created credit crunch that sucker punched a key part of any economy.. the building sector. But each country is different.

    Greece did yes with structural issues that are huge, but it also spent it on credit based on a failed bank that gave no interest.. aka a tip box tax collecting system. They out right lied to everyone about their deficit.. and frankly not much you can do about that other than punish the country.. which has happened.. 10 fold.

    Spain did not spend like a drunken sailor and had in fact a surplus until the US created credit crisis hit the planet. Spain's problem was an over reliance on the building sector and now it has to redo its economy with a smaller building industry and find new jobs which is hard in a labour market that is stiff as a morning boner. Add to that it has to get rid of a lot of unsold homes, which is slowly happening.. ironically enough yet again to the very Northern European clients that originally drove the demand for housing in Spain.

    Italy also did not spend like a drunken sailor and had surpluses... in fact it cut its debt load over the last 20 years. Italy is very dependent on exports and since there is a world economic crisis, then said exports fall and any surpluses turn to deficits and debt loads rise. Add to that a government that has more in common with Homer Simpson than Winston Churchill and you have a problem.

    Portugal had one problem.. a political inability to deal with left over structural problems from the former dictatorships that prevented growth. They are now dealing with this.. it is unpopular, but that is life.

    Ireland.. drank too much USA kool-aid and use the US idea of a debt based economy to rise higher and higher (and are doing it again sadly). If any country should go bankrupt in Europe it should be Ireland considering the massive amounts of government, business and private debt the country has.. it makes Greece look like a good deal. Only thing Ireland has going for it, is a good tax collecting system.

    Budget surpluses turned to deficits and deficits grew because of the US created credit crunch.. that is a fact of life in a recession.

    In the end Germany, France, and the rest of the Eurozone have only seen huge benefits from having the common currency and going back to national currencies would be economic sucide for most countries, which is why the Euro will stay. Now Greece might get kicked out, but that does not change the fact that the Euro is here to stay regardless of what the Anglo-American anti European talking heads say.

    It would be like saying that California would leave the US dollar to form its own currency so that it could devalue its way out of its economic problems... how realistic is that?
    Last edited by PeteEU; 10-02-11 at 01:06 PM.
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    Re: Germany 'wont give more to EU bail-out fund'

    Quote Originally Posted by PeteEU View Post
    an agreement to not go over 3% which everyone broke.
    My country was one of the few who strongly objected to it. Unfortunately they lost Germany's support.

    Again the EU will not break up.
    Not if we stick to the treaty and improve our regulations and regulators.

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    Re: Germany 'wont give more to EU bail-out fund'

    Quote Originally Posted by Djoop View Post
    My country was one of the few who strongly objected to it. Unfortunately they lost Germany's support.
    Problem is not the 3% threshold, but the lack of ability to enforce it. The idea in it self is a good one provided there is a "the **** hit the fan" exception for a situation like the financial crisis. Now things are changing in many countries where they are putting into law such restrictions to the deficit.. Spain is amending its constitution to implement such a limit.. and a small one at that..

    Not if we stick to the treaty and improve our regulations and regulators.
    That and a few other things yes. Point is the EU wont fall apart.
    PeteEU

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    Re: Germany 'wont give more to EU bail-out fund'

    What I end up being more attentive to when these issues surface (because this isn't the first time we've had such a discussion) - is that Germany is in the position as a nation to assist other.

    I think they have made a significant economic turnaround - and other countries who are struggling in that area should actually consider emulating the basic elements of their success - without killing everyone in the process.
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    Re: Germany 'wont give more to EU bail-out fund'

    The European Union is far stronger than the crappy USA and it will still be around after your pathetic currency finally collapses. And it will get even stronger once Russia is allowed to preside over it.
    Freedom is not free.

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    Re: Germany 'wont give more to EU bail-out fund'

    Quote Originally Posted by Иосиф Сталин View Post
    The European Union is far stronger than the crappy USA and it will still be around after your pathetic currency finally collapses. And it will get even stronger once Russia is allowed to preside over it.
    You're attending College and living in Columbus, Georgia.

    Don't you mean "our pathetic currency"

    Unless there's a Columbus, Georgia - where - near Abul or Akhali-Pantiani?
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    Re: Germany 'wont give more to EU bail-out fund'

    Quote Originally Posted by cpwill View Post
    truth. let your yes be yes and your no be no.

    as for the EU, it will not survive in it's current form. there simply isn't a way to bail out a structural defect - someone somewhere will have to go.
    Agreed. Those countries that have run their business properly cannot be continuosly making bad loans to the free-loading members. Besides whatever cost-analysis one makes, it is just plain politically unviable. Liberal nanny-state fail. We always said it would fail. And now it has.

    Jeez, look at the coming tsunami that is going to throw Obama so far out of office that we may never see him again. Same crap.

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