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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'

    This is the real question that I wonder if anyone, Papandreou, Merkel, Bernanke, Geitner... anyone... knows the answer to: Assuming Greece is going to default in some fashion, can a $600 bn+ implosion of insurance payouts (CDS) that will sink banks across the continent and ripple across the Atlantic be avoided, or is the inevitable being avoided just long enough for some derivative positions to be unwound before the fire sale?
    NYT: Derivatives Cloud the Possible Fallout From a Greek Default

    In other words, if Greece is Lehman, then is SocGen (or some other Euro bank) AIG? If so, who throws out the Euro-TARP? Surely not Merkel's Germany.

    This crisis has the potential to become very disorderly.
    "A witty saying proves nothing." Voltaire

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

    Quote Originally Posted by PeteEU View Post
    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.
    which does not alter the fact that Greece's debt is inherent to it's populace, not a product of poor governance (though that certainly has made matters much much worse). you can't bail out Greece - and she's hardly the only one in her situation; merely the first. which is why I stated that at some point either the strong nations will leave the EU, or they will kick the weak ones out.

    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
    the problem is definitely Greece, but it's where the Greeks decided to vote themselves lavish entitlements, insane leisure, and then not have any kids to pay for it all.

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

    Quote Originally Posted by German guy View Post
    I find this development interesting on one side, but disturbing on the other. And I am disappointed by my (German) politicians. Merkel and her conservative CDU flip-flopped all the time, it was never clear whether she wants to appease the euroskeptics who don't want to spend more money, or if she takes a clear stance in favor of a European solution. That Merkel's small coalition junior partner, the libertarian FDP, is at the brink of collapse, didn't help either.
    Not coming out with a clear position and requirement has been a problem.

    If anything, I would like to see the German government to take a clear stance, either a clear "no" to European solutions, or a clear "yes". A strict, consistent course in either way would be better, than talking a middle way, flip flopping all the time, and claiming after each new step that this was the last step, although everybody knows this isn't the case.
    I absolutely agree.

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    Quote Originally Posted by Eighty Deuce View Post
    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.
    The issue isn't even so much one of bad governance, these are Issues of corporate corruption and legalized theft. It's the same story everywhere that's been either Been bailed out, or needing a bailout. It's Iceland that's found the solution : call the banks out as being the culprits and that the debt is not owed by the people, then almost immediately the banks come back with revised numbers and don't need bailouts.

    Otherwise, the EU is as good as doomed... The US as well though, so let's realize the bad guys are the big banks, not capitalism, not the people getting too big a mortgage (that's a fraction o the problem still), this isn't even a problem created by unions (though sometimes they are too strong), this is a result of cronyism, lack of enforcement and massive theft through derivatives.

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

    Quote Originally Posted by cpwill View Post
    which does not alter the fact that Greece's debt is inherent to it's populace, not a product of poor governance (though that certainly has made matters much much worse).
    LOL it is poor governance lol.. seriously have you even followed what went wrong? The Conservative Greek government LIED to the world including their own people and American banks and financial institutions helped them in hiding the truth.. that their deficit was much larger than reported and they had off the books debt .. thanks to J.P. Morgan and Co.

    you can't bail out Greece - and she's hardly the only one in her situation; merely the first. which is why I stated that at some point either the strong nations will leave the EU, or they will kick the weak ones out.
    Again you have zero understanding of the situation. Countries will always have debt.... even China has over 30% debt... You can not run a country without debt, just as you cant run a company without debt.

    Now Greece committed fraud, pure and simple and will ultimately pay for said fraud. It was the political elite (mostly right wing) and the banking sector that committed said fraud and not the Greek people and that is why the Greek people are rebelling against the sitting socialist government that is trying to fix the problem.

    The other countries in Europe also have debt.. but unsustainable? With the exception of Ireland and maybe Portugal, hell no.

    So freaking what if Italy has 125% debt vs GDP? They have had it before and frankly have not been under 80% for many many many decades. That debt is majority owned by... the Italian people! Italy is a massive economy, one of the worlds biggest exporters and has a ton of potential considering the structural problems hampering growth. Fix those problems and watch Italy go.

    Now I ask you this.. what countries other than Greece, Ireland and Portugal, have "debt problems"? France? Germany? UK? Denmark? Belgium? Holland? Austria? which ones?

    the problem is definitely Greece, but it's where the Greeks decided to vote themselves lavish entitlements, insane leisure, and then not have any kids to pay for it all.
    You and your ****ing entitlement ****. It is a load of horse crap that is deflecting away from the real reasons.... lax tax collecting. You cant cut your way out of a problem like this (and the US deficit problems) but need to up your income. And in Greece's case, the tax collecting system is pathetic and can be compared to Somalia's. But as long as the Greek people are royally pissed at the political elite and the bankers, then they will not cooperate one bit in fixing their economy as long as it is the "usual suspects" running the show.

    And like it or not, NO European will ever vote in anyone that wants to turn their country into the heartless ME society like the USA. Yes we want our UHC, and pension systems and so on and are willing to pay for it and do pay for it.

    Now if it had not been for your countries cluster****ing the world economy in a debt fuelled decade, then we would not be discussing European "debt problems"... considering debt levels with a few exceptions have not gone up that much the last 5 years let alone the last decade+. That is the dirty little secret in all this... why is it that sovereign debt is now all of a sudden a huge problem when it was not 20 years ago when the debt levels were similar... could it be that it was European's who outed your little pyramid scheme?

    So answer me... why is it suddenly a problem? Is it reality, economically or maybe... is it all just political? Wanna bet that the problem goes away when and if the GOP wins the White House? After all it was Cheney who laughed off deficits and debt ....
    PeteEU

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

    Quote Originally Posted by PeteEU View Post
    LOL it is poor governance lol.. seriously have you even followed what went wrong? The Conservative Greek government LIED to the world including their own people and American banks and financial institutions helped them in hiding the truth.. that their deficit was much larger than reported and they had off the books debt .. thanks to J.P. Morgan and Co.
    if the greek government lied, then that is on them. but that doesn't alter the fact that the reason they had to lie fundamentally comes down to the fact that they have too many people drawing off the system, and too few people paying in.

    Again you have zero understanding of the situation. Countries will always have debt.... even China has over 30% debt... You can not run a country without debt, just as you cant run a company without debt.
    sure you can - America has been debt free times as have plenty of nations.

    however, again, the fact that they have debt is not as important as the amount of debt they have racked up trying to make up for the fact that their demographics are skewed.

    pay-as-you-go retirement only works when you continue to have significantly more workers than retirees; which means that if you are going to retire your populace at 55 and watch them spend the next 25 years drawing on the system, you need them to have had a lot of kids back when they were in their twenties. Instead, most Greeks couples had 1 kid.

    Now Greece committed fraud, pure and simple and will ultimately pay for said fraud. It was the political elite (mostly right wing) and the banking sector that committed said fraud and not the Greek people and that is why the Greek people are rebelling against the sitting socialist government that is trying to fix the problem.
    there is no right wing government in Greece. there is only left wing and slightly-less-left-wing. and the greek people are rebelling because their easy lives with early retirements and late studenthoods is going away. honestly people, if you're a "student" until you're 27, and then you plan on retiring at 55; guess what? you're not working long enough to pay for either of those things.

    The other countries in Europe also have debt.. but unsustainable? With the exception of Ireland and maybe Portugal, hell no.
    it's not about the debt - the debt is just a symptom. it's about the demographics.

    So freaking what if Italy has 125% debt vs GDP? They have had it before and frankly have not been under 80% for many many many decades. That debt is majority owned by... the Italian people! Italy is a massive economy, one of the worlds biggest exporters and has a ton of potential considering the structural problems hampering growth. Fix those problems and watch Italy go.
    except that you won't because Italy's vital workforce is now living at home with mom and dad until their 30's, and there aren't even enough of those. you need a fertility rate of 2.1 to replace your populace - and no people have ever come back after dipping below a fertility rate of 1.8. Italy's fertility rate is 1.3.

    Now I ask you this.. what countries other than Greece, Ireland and Portugal, have "debt problems"? France? Germany? UK? Denmark? Belgium? Holland? Austria? which ones?
    take a look for yourself

    You and your ****ing entitlement ****. It is a load of horse crap that is deflecting away from the real reasons.... lax tax collecting. You cant cut your way out of a problem like this (and the US deficit problems) but need to up your income.
    you are correct that you need to increase income - though i'm not sure you know how to do it. however, the fact remains that, like the United States, Greece cannot tax it's way to paying for itself. when you are taxing three workers to pay for two retirees and one student; bluntly, the system is unstable, and you've created a tragedy of the commons where everyones' incentive is to get out. try to punitively tax those workers, and they will simply leave faster, and you will be worse off than you were before.

    And in Greece's case, the tax collecting system is pathetic and can be compared to Somalia's. But as long as the Greek people are royally pissed at the political elite and the bankers, then they will not cooperate one bit in fixing their economy as long as it is the "usual suspects" running the show.
    the greek people will continue to protest about how it's the evil bankers and whomever else no matter what "the political elite" do - its in their interest to blame someone else, and seek to place the pain on someone else.

    NO European will ever vote in anyone that wants to turn their country into the heartless ME society like the USA. Yes we want our UHC, and pension systems and so on and are willing to pay for it and do pay for it.
    Greek rioters seem to disagree.

    So answer me... why is it suddenly a problem?
    it's not - this train wreck has been building for decades. and is still building in plenty of other nations, including the US.

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

    Anyone ever notice that the economies of different places with different people vastly vary? Oh yes, vastly vary. (LOL) I can go to a coke machine in the south, and buy a can of coke for 60 cents, or something like that. I can find that SAME coke machine in the north east, and it'll be an even dollar. Apply that principle to just about everything. And that is within the SAME country, with a central bank, and central governing body laying down the law for every state.

    What was everyone expecting to happen, sharing a currency, but not a governing body?

  8. #28
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    Re: Germany 'wont give more to EU bail-out fund'

    Quote Originally Posted by PeteEU View Post
    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?
    The difference is that California is well-integrated into the economy of the rest of the United States, whereas that isn't true for Greece. If California were to go bankrupt, for example, the US federal government would still send out Social Security and Medicare checks to Californians, it would still send money to California for highways and schools, etc. There is no analogous system in place for the eurozone to handle a Greek default. If the EU was something akin to the United States of Europe, where the European government was responsible for a very large percentage of the total taxation and spending, then it wouldn't be as big of a problem.

    I don't know if the eurozone will fall apart, but as I see it, it only has two choices: Go big (integrate fiscal policies across nations and become the United States of Europe), or go small (kick the weak members out and limit the eurozone to Germany/Netherlands/Finland/Austria/France.)
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    Re: Germany 'wont give more to EU bail-out fund'

    Quote Originally Posted by Kandahar View Post
    The difference is that California is well-integrated into the economy of the rest of the United States, whereas that isn't true for Greece. If California were to go bankrupt, for example, the US federal government would still send out Social Security and Medicare checks to Californians, it would still send money to California for highways and schools, etc. There is no analogous system in place for the eurozone to handle a Greek default. If the EU was something akin to the United States of Europe, where the European government was responsible for a very large percentage of the total taxation and spending, then it wouldn't be as big of a problem.
    Actually there is a system for Eurozone countries to default... but it does not start till 2012-13 thanks to the freaking Poles who demanded a delay back in the day. That is one of the reasons that German and French politicians are playing the long delaying game.

    And I am not talking about California going bankrupt (other states would go before California), I am talking about California leaving the dollar so it is able to devalue its new currency...
    PeteEU

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

    Quote Originally Posted by cpwill View Post
    if the greek government lied, then that is on them. but that doesn't alter the fact that the reason they had to lie fundamentally comes down to the fact that they have too many people drawing off the system, and too few people paying in.
    Again no you are wrong. It comes down to that the Greek government lied to the people period. Yes they had many people drawing off the system, so what.. the problem was the lax tax system which the Greek Governments refused to deal with. It has been a known problem for decades, but nothing has been done by the politicians. You can hardly blame the people for the inactions of the politicians when the politicians never mentioned the true state of the government finances. Had the Greek people gotten the truth, then the pressure on their politicians to fix the problem would have been huge... just as it is in all countries that have problems of some kind. Instead the Greek people were told that there was no major problems...One of the grievance of the people against the politicians is the politicians corruption (both left and right)... Greece has had on the books for over a decade a privatising program of state assets...very few assets have been privatised and those that have, have gone to "friends" of the sitting government...

    sure you can - America has been debt free times as have plenty of nations.
    LOL no you have not. America has never been debt free.. in fact America has defaulted a few times. You especially have not been debt free this and the last century. Hell your whole country started on debt...

    however, again, the fact that they have debt is not as important as the amount of debt they have racked up trying to make up for the fact that their demographics are skewed.
    Demographics is just an excuse. Societies adapt over time making demographics a bull**** excuse. And every country has demographics against them even the US. Only reason the US has 2.01 brith rate is because of the Hispanic population, which many want to kick out.

    pay-as-you-go retirement only works when you continue to have significantly more workers than retirees; which means that if you are going to retire your populace at 55 and watch them spend the next 25 years drawing on the system, you need them to have had a lot of kids back when they were in their twenties. Instead, most Greeks couples had 1 kid.
    Yes in text books.. in reality we have yet to see such a situation. Even the Japanese who have had very low birth rates for many many decades, are doing just fine...

    there is no right wing government in Greece. there is only left wing and slightly-less-left-wing.
    Utter bull****. The Greek Conservatives might not be Tea Party and wacko GOP right wing material, but they are on the right wing of the political sphere. You seem to forget that the US "right wing politician" is often far far right in the real world.

    and the greek people are rebelling because their easy lives with early retirements and late studenthoods is going away. honestly people, if you're a "student" until you're 27, and then you plan on retiring at 55; guess what? you're not working long enough to pay for either of those things.
    You are miss-informed. Greek retirement age is not 55. Certain jobs have a lower retirement age yes, but the average Greek retirement age is 65. Those that retire before that, retire on early retirement, which is set at 57. Could it be set up?Sure and it has and will.. hell they are banning early retirement in Greece last I looked.

    And you dont understand what the Greek people are rebelling against... if you seriously think that the Greek people rebelling have "easy lives" then you are either delusional or brainwashed by Anglo-American media who rarely stick to the facts when it comes to Europe.

    it's not about the debt - the debt is just a symptom. it's about the demographics.
    LOL have you even been following the whole crisis? Demographics is just a lame excuse period.

    except that you won't because Italy's vital workforce is now living at home with mom and dad until their 30's, and there aren't even enough of those. you need a fertility rate of 2.1 to replace your populace - and no people have ever come back after dipping below a fertility rate of 1.8. Italy's fertility rate is 1.3.
    So you are saying that Australia and China are cluster****ed? Not to mention Canada, Switzerland, Estonia, South Korea and the UK is close to being screwed... not to mention the US...? You are not at replacement fertility rate ...

    you are correct that you need to increase income - though i'm not sure you know how to do it. however, the fact remains that, like the United States, Greece cannot tax it's way to paying for itself. when you are taxing three workers to pay for two retirees and one student; bluntly, the system is unstable, and you've created a tragedy of the commons where everyones' incentive is to get out. try to punitively tax those workers, and they will simply leave faster, and you will be worse off than you were before.
    Again you fail to understand the ****ing problem. Tax evasion in Greece is 25%+ of taxpayers. That is a HUGE number.. if those people actually paid their taxes, then Greece would have a surplus!

    Your demographics excuse is getting more and more bull**** at every turn since it is a theory that cant be proved. It does not take into account a sudden rise in birthrates, immigration, changes to the political and social system and so on and so on. For one, the fertility rate of the US is not at replacement value and yet your population is growing (minus immigration)...

    Fact is, the Greek society could function with a few tweaks, if the bloody Greeks did not evade taxes en mass.

    the greek people will continue to protest about how it's the evil bankers and whomever else no matter what "the political elite" do - its in their interest to blame someone else, and seek to place the pain on someone else.
    Because it is the rich business owners and bankers that are primarily avoiding to pay taxes!!!! They are also the ones who are in power in government giving favours to each other and selling state assets to each other on the cheap.. The problem is not the people in general, but the 25% or so that avoid paying taxes ... who happen also to be part of the political elite. The Greek people are fully aware they have to change their ways, but they refuse to do so as long as the rich and bankers are sucking the life out of society with their criminal actions.

    Greek rioters seem to disagree.
    Greeks riot over loosing last nights football game. And take off your American glasses... they are tainting your world view.

    Who is it the Greeks are "rioting" against.. and where? Government buildings, political party buildings and in front of banks.

    it's not - this train wreck has been building for decades. and is still building in plenty of other nations, including the US.
    Sorry but that is not an answer.. that is a ideology answer of the US right. Debt was not a problem until 2008 when Obama took over the White House and the GOP was out in the dark. Then "debt" became a major political problem. If debt was a real problem, then the countries with high debt and high deficits would all be under huge pressure to fix their problems.. but both the UK and US who have the biggest deficits and rising debt are getting cart blanc at the moment with record low interest rates on their debt.
    PeteEU

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