Me too, Spain has really made a mess of a booming economy but Italy less close to the edge.
more or less precarious Chris? I thought they were slightly better off than Spain at the moment (read less worse off!)
First it Egan-Jones (of course). Then Fitch follows S&P and slashes Spain By 3 Notches To BBB, Only Moody Is Left - Step 3 Collateral Downgrade Imminent. Italy's position is just marginally more precarious.
I would also like to return to my original point which may also be read as people in both sterling and dollar economies are lead by their media and financial folk who do not like the € (very much so where it has removed the $ from the reserve position of a number of countries) and an identity thing. Then my other, later, point about the urbanisation of populations and the effect that apparent 'affluence' is based on the living standards of capital cities and those of similar importance such as 'second cities', regional capitals and so on that are driving economies and have contributed enormously to the growth of credit, thus debt, across the board. You do not need to be a David Harvey fan (I am not, but what he is writing just makes too much sense to dismiss) to see his point.
We need to somehow un-invent what JPMorgan and their ilk contrived to make themselves richer and all of us beholden to them (at least owing banks money and paying interest on those debts) and recreate an equilibrium that will encourage far more regional/continental groupings such as the EU. Indeed remember that in effect when the USA came together it was just that and there are some states who still have succession clauses in the own constitutions that they consider more valid than the USA's constitution fo the entire union as a 'nation'.
So, in my strange way and despite what my political ideology might be, I am a very conservative unionist who believes in such things as the EU and a single currency along with being very appreciative of the USA as such a union and wishing that however the politics changed in what was the Soviet Union some of the countries had stayed together in a union like the EU or USA. As for a superpower USE that some are afraid of, no thanks we saw that with USA versus USSR and it is the wrong way for unions to do a damned thing or their people which is, after all, why they are unions.
I mis-typed at the end a few boxes back, 20 years ago the Soviet Union was already gone, meant 25!
As for this, goes both ways and the other way round the impact is heavier and destruction greater. A few US pundits have said it possible and Bill Gross including the USA and UK as in with the PIIGS must be include there. As said, let's sit back in our armchairs and discuss again in the near future.
Part 2 John. In fact, if I think anything particularly 'bad' about the EU it is that small economies such as Latvia, Estonia, Lithuania, Slovakia, Cyprus, Malta, Slovenia and Ireland have been forced to move too fast for the economics bases they had. Of those Latvia nd Lithuania are not in the Eurozone, but Kosovo and Montenegro are without being EU (which goes against the ERM two year minimum EU membership regulation for a start), and Andorra, Monaco, San Marino and the Vatican use the €. I also know with a Swiss OH and my relatives there, connections in Geneva and so on that the € is as acceptable as the SFr most places. So where the Irish were, as you put it, screwed, so were the smaller, weak economies and the not so poor small 'principalities' and holy see are stuck right in it. The almighty mess is not quite as simple as JPMorgan agnostics who do not believe the $ is in exactly the same quagmire would wish us to believe. As Andrew and I were discussing, the first round sceptics said the € would be gone by 2012, we are just about half way through and as often as Greece has been written off they are still with us, also screwed or otherwise. What banking history is denying is how many other countries have been in a similar precarious state with the $, the Philippines being an excellent example back when I was first working in developing nations. Some of the Latin Americans depended on the $ and their great benefactor. Yet most of those countries have seriously pulled the plug on US influence and the $ may be still there but it ain't that important. It is in part why I think there is hope for the €, simply because the wholesale misery the collapse of our currency would cause is going to not only kick the small economies into the long grass but it will lose them there until they re-emerge as countries needing the kind of development aid we are used to seeing go to a number of African countries particularly.
Who will have to give them aid? Precisely the countries who drove them against the wall and then saw them go broke.
Sum ergo, too much hangs on the € to allow it to die and everything will be done to avert each imaginable 'wound' such as the total collapse of the Greek economy.
Again I agree, but now my Blackberry is telling me my battery is down low, so let's all watch with avid whatever!
Good point Brian but I think at around 1% of the eurozone GDP ireland don't really matter too much to the euro. On the other hand the 60 billion that the Irish have been lumbered with matters a lot. It is a bit circular. The Irish borrowed 60 billion to give to the Irish banks so that they could give it to the French and German banks. The Irish have been screwed "pour l'encouragement des autres".
Only hope now, as I see it, is that Spain is too big or too risky to be bullied into a similar deal and that poor old Ireland can benefit from a retrofit of whatever terms Madrid gets.
OK, true what you say, but reading it in European terms it gives the EU that impression. So, to all intents and purposes, both views are right depending on how you look at them.
I think the forthcoming Chinese implosion is the thing that is keeping some things afloat anyway. Colleagues working in China do not believe the present regime has a snowball in hell's chance of survival. Too many Chinese now spend a lot of time outside of their country to not force change and even the military people realise their counterparts elsewhere have good salaries, nice houses and so on.
As for Europe and our banks, with the exception of perhaps the Scandinavians, the banks run the countries more than treasuries and the banks do not want to go down with the € so they'll be there at the crucial moment appearing to help save the € but actually saving themselves. It includes London, the City stuck so much capital into Euroland that they will go down like stones in deep water. We shall see. If the EU rides out 2012 intact then it will see many more years out and grow. Right now we are using particular sources of information and ways of interpreting it to form our views, we could very easily both be wrong but only one of us will be right. I must go out soon, but back to my starting point which is the passions the € raises. I think what might count most of all is not who believes in the € but what the people who control destiny believe in overall - and I do not include religion unless money counts as one.
Sadly Brian the Irish vote wasn't about keeping the euro afloat, it was about keeping Ireland afloat. This was based on two things really. Firstly everyone was scared by the Government saying that if there was a no vote Ireland wouldn't have access to the ESM should a second bail-out be required and since Irish Civil Servants, Irish farmers and professionals are actually not doing too badly given the state of the country the last thing they wanted was for the tap to be turned off. Secondly those actually in employment and struggling with new taxes and those unemployed struggling with reduced public services etc. were warned by the Minister for Finance that the budget in December would be even more severe if there was a no vote. I think the real message from the referendum was they there is now a large social divide in Ireland. The well off voted yes and the less well of voted no.
che, senz'altro, succederanno fra poco!
Isn't that a chinese curse: "may you live in interesting times?"
Many other currencies are offered as a substitute -- but China is heading to a hard landing of its economy. There is still only one world reserve currency. But the same could have been said about the British pound or the French livre at other points on the timeline. They have a birth, life, middle age and dotage. I'm betting the US dollar has entered middle-age. Goldman's institutional advice is to bet the euro's demise. Given its history, I'd give the European national governments enough time to allow its most critical major banks to switch out of its riskiest positions -- then watch the muppets cry.
That is the point, 2012 was already supposed to be € free and most of the EU disintegrated. Figaro even gave the EU until February in one article!
Andrew: Si bene e grazi, fino al prossimi momenti di SFN follia!
Thanks Brian, I think that's why I can't really get a grip on the situation - it seems to a layman that it could go a number of ways and that in the end it might end up being a succession of cobbled together schemes and deals to keep the status quo. In early december last year we were being told in no uncertain terms that the euro wouldn't survive into the new year...
Andrew, even the top economists cannot agree, do not know, MDs of big finance houses are saying different things to each other and all ofthem are ultimately negative and yet there are people like the Irish with their 60% vote in support of keeping the € afloat and 80%+ of Greeks in several polls wishing to stay in the € that if anything it is going to be a very interesting summer at least.
esatto, vedremo...! ciao e a presto ;-)
Chris, sorry it wasn't meant to be sarcastic or ironic, I'm so 'in France' that I haven't got a clue what's happening as the French media don't tell us anything (mushrooms in the dark fed on sh1t syndrome) and as Brian makes me painfully aware, I must get to read some more international news! So your comments are interesting to me and "on verra". is this going to be a rather crappy summer then...!