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From the Economist - Charlemagne: Banking on it

Lafayette

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Charlemagne: Banking on it

Excerpt:
IN DARKER times language tends to be blunt. But when Europeans are feeling perky, out come the metaphors. And by that measure, things in the euro zone are looking remarkably bright. With the wind in Europe’s sails, it is said, the time has come to clamber through the window of opportunity and fix the roof while the sun shines. Failure will leave the euro exposed when the economic storm clouds gather, or China starts to sneeze.

Three things saved the euro zone from destruction in 2011-12: a €500bn ($588bn) bail-out fund, the rudiments of a banking union, and Mario Draghi’s “whatever it takes” promise—never tested—that the European Central Bank (ECB) would, if needed, unleash a massive programme of bond-buying to protect the currency. Each of these was supposed to be a last resort, as the wildfires of the crisis licked at the bond markets of one country after another. Red lines were crossed, sacred cows slaughtered, rules bent beyond recognition.

Those were desperate measures, necessary when they were enacted. But reform in good times is never easy. As one EU official puts it, when the sun is out you want to go to the beach. Growth in the euro area is up (faster than America), unemployment is down (the lowest since 2009), and businesses and consumers are brimming with cheer. Polls find that Europeans love their currency again. The constant purr of good news has yielded a hashtag, #Euroboom. The tools built to weather the last crisis have proved their worth.

So, all is well and good in EuropaLand? Bring out the Champagne!

No? Methinks not. Not ALL is well. But shouldn't Europe get over the tsunami of refugees from the Middle-east and Africa? After all, they did not rape our women in hordes as was expected - and in fact many are going back.

It has just dawned upon them that they have no advanced skills for which European countries are clamoring, and Europe has enough garbage-men for the moment ...
 
The problem is that the Economist and a lot in the Anglo-American financial world paint everything with a very "anglo-american" paint brush. Europe and most of the world simply does not fit into that kind of box. Let me explain.

The common theory is, give tax cuts and people will spend. Now where does that theory come from? The US. It does not however work in Europe, to the shock of many anglo-American economists.. why? Because European would rather pay off personal debt than go out and buy new stuff... which is in total opposite of Americans and British (up to a point). Try to give Japanese a tax cut, and they will save the money up. The world does not react like Americans...

These differences vary from country to country, but they are all different from America and the UK.

Another example. Spain has one of the highest, if not highest home ownership ratio on the planet. So when the crisis hit, everyone in the Anglo-American financial world just assumed that this meant that the Spanish were up to their ears in debt. Problem was.. they were not. Sure many Spanish had invested in extra homes for renting out or as an investment, and used loans to do that, but the average Spaniard in fact inherits their home, and is often debt free (on that point at least). That is why home ownership ratio in Spain is so high.

Point is also, that Europe is not one country, but a lot of them.. with different traditions and economies. So painting it all with one brush is a bit crazy. France has issues with labour laws, but Denmark does not. Italy is stuck with legacy legislation that prevents competition, but Holland does not (relatively speaking). The list goes on.

So no, Europe is not perfect, and it is not "all good" so to say. It is as it always has been... ticking along in a positive healthy rate, that most Anglo-American financial experts (if you can call them that), think is doom and gloom.

It is amazing that now days the Anglo-American media never mentions that Europe is in fact growing many places faster than the US.... has a far more open economy and more opportunities. No one mentions that Greece.. yes Greece is growing faster than the UK at the moment.. All that is mentioned if you read the Anglo-American media, is that Italy is "not growing as expected"... basically trying to paint a negative where there is not really one.

But again, to the OP.. all is as well as it usually is in "Europeland".. depending on what metrics you want to use. Europeans are pessimists by nature....
 
The problem is that the Economist and a lot in the Anglo-American financial world paint everything with a very "anglo-american" paint brush. Europe and most of the world simply does not fit into that kind of box. Let me explain.

The common theory is, give tax cuts and people will spend. Now where does that theory come from? The US. It does not however work in Europe, to the shock of many anglo-American economists.. why? Because European would rather pay off personal debt than go out and buy new stuff... which is in total opposite of Americans and British (up to a point). Try to give Japanese a tax cut, and they will save the money up. The world does not react like Americans...

These differences vary from country to country, but they are all different from America and the UK.

Another example. Spain has one of the highest, if not highest home ownership ratio on the planet. So when the crisis hit, everyone in the Anglo-American financial world just assumed that this meant that the Spanish were up to their ears in debt. Problem was.. they were not. Sure many Spanish had invested in extra homes for renting out or as an investment, and used loans to do that, but the average Spaniard in fact inherits their home, and is often debt free (on that point at least). That is why home ownership ratio in Spain is so high.

Point is also, that Europe is not one country, but a lot of them.. with different traditions and economies. So painting it all with one brush is a bit crazy. France has issues with labour laws, but Denmark does not. Italy is stuck with legacy legislation that prevents competition, but Holland does not (relatively speaking). The list goes on.

So no, Europe is not perfect, and it is not "all good" so to say. It is as it always has been... ticking along in a positive healthy rate, that most Anglo-American financial experts (if you can call them that), think is doom and gloom.

It is amazing that now days the Anglo-American media never mentions that Europe is in fact growing many places faster than the US.... has a far more open economy and more opportunities. No one mentions that Greece.. yes Greece is growing faster than the UK at the moment.. All that is mentioned if you read the Anglo-American media, is that Italy is "not growing as expected"... basically trying to paint a negative where there is not really one.

But again, to the OP.. all is as well as it usually is in "Europeland".. depending on what metrics you want to use. Europeans are pessimists by nature....

Re Greece

When a country has the economy drop as much as Greece did a few years ago, it can grow much quicker when the decline stops as it is a much lower starting level.
 
Re Greece

When a country has the economy drop as much as Greece did a few years ago, it can grow much quicker when the decline stops as it is a much lower starting level.

Everything is relative... as always, but yes. It is all relative... the media has focused a lot on the debt to GDP.. which in Greeces case was highly miss-leading. Why? First off the Greek debt load actually is falling and has been for years. But because the GDP collapsed (relatively speaking), then the ratio shot up. Highly miss-leading if you ask me, but politically it sounds great.
 
I'm struggling to understand what this thread is about really.
 
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