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Lagotto posted:It would have been the cheap solution for the northern block. It would have let to the bankruptcy of the Greek banks and quite a few of the Spanish and Italian banks, since they were far more exposed to eachother and owed far more money domestically then externally. There is no way Spain could have financed their own bail out. So you want WW3?
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Jul 9, 2016 12:07
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effectual posted:So you want WW3? No, just a break up of the EMU. Why delay the inevitable? Of course it will be painful but I'd rather rip off the band aid fast instead of torturing ordinary people for a few decades for the sake of idealism and the vested interest of the status quo.
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Jul 9, 2016 12:20
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Lagotto posted:It would have been the cheap solution for the northern block. It would have let to the bankruptcy of the Greek banks and quite a few of the Spanish and Italian banks, since they were far more exposed to eachother and owed far more money domestically then externally. There is no way Spain could have financed their own bail out.
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Jul 9, 2016 14:43
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Lagotto posted:It would have been far cheaper for Germany, The Netherlands and France etc. to bail out their own banks directly, something they have had to do to an extent already anyways. Was there enough money for Northern Europe to do this before Dragi came into the ECB though? The German and French banks' assets were larger than GDP.
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Jul 9, 2016 15:05
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Arglebargle III posted:Was there enough money for Northern Europe to do this before Dragi came into the ECB though? The German and French banks' assets were larger than GDP. Yes, Germany would have been able to mobilize €40 billion to cover all Spanish assets held by German banks without any problem.
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Jul 9, 2016 19:05
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Arglebargle III posted:Was there enough money for Northern Europe to do this before Dragi came into the ECB though? The German and French banks' assets were larger than GDP. Bank assets are not the same as exposure to bad debt
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Jul 9, 2016 20:17
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Geriatric Pirate posted:Bank assets are not the same as exposure to bad debt Could you expand on this a little?
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Jul 10, 2016 06:04
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Who is Hans-Werner Sinn and why is he saying that next one out of EU/Euro is Finland?
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Jul 10, 2016 09:14
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Puistokemisti posted:Who is Hans-Werner Sinn and why is he saying that next one out of EU/Euro is Finland? He's probably the most influential economist in Germany. He thinks that, given the decline of the Finnish economy as a result of the implosion of Nokia, the paper industry, the effect of sanctions against Russia, and of course the aftermath of the global financial crisis, Finland needs a devaluation of its currency. Since it is now comprehensively clear that internal devaluation of the kind pursued in Southern Europe doesn't work, the only other option is external devaluation, i.e. leaving the euro. Sinn seems to think that Finland leaving the euro would be much less painful than it would be in Southern Europe, since those countries at the moment rely on the ECB's printing press to keep the interest rate on their debt down, and Finland not so much.
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Jul 10, 2016 09:45
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Let he who is without Sinn cast the first stone (I dunno what I mean by this)
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Jul 10, 2016 10:59
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He might be right but there is no political support for it currently. Although, since Väyrynen now has his own party and is making appearances as Kekkonen maybe that will change. If you wrote a book with a character like him in it critics would say it's ridiculous and unrealistic. Bless you Paavo. *thought this was the Finnish politics thread but whatever, Europeans can learn about Paavo Väyrynen too*
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Jul 10, 2016 11:31
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The political support for leaving EU/Euro is around 25% in Finland (in one poll there was actually more support for leaving the EU than leaving the Euro, go figure.) This is not exactly an issue that most Finns view only through the prism of economy but rather things like our desire to belong to the West and so on.
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Jul 10, 2016 13:26
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Arglebargle III posted:Could you expand on this a little? The German/French banking systems might have a lot of assets (more than 100% of GDP), however most of the assets will not be loans to the periphery, and not all loans to the periphery will default, and loans that default do not lose 100% of their value. Hence the key number is German exposure to Italian banks, not the size of the German banking system.
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Jul 10, 2016 14:46
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They were using their zero risk Eurozone government bonds as their safe investments though, and were into them in a big way. I don't know exactly the numbers.
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Jul 10, 2016 16:43
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Finland is leaving nowhere during this government. Shame.
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Jul 10, 2016 17:53
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Ligur posted:Finland is leaving nowhere during this government. Shame. I wish you would though!
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Jul 10, 2016 18:21
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Friendly Humour posted:I wish you would though! Afraid I'll ruin the economy, aren't you?
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Jul 10, 2016 18:57
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Ligur posted:Afraid I'll ruin the economy, aren't you? Probably keeping it stagnant unless you're a multi-millionaire venture capitalist.
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Jul 10, 2016 20:06
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Ligur posted:Finland is leaving nowhere during this government. Shame. Don't worry, they're effective at keeping themselves isolated by being extremely toxic.
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Jul 10, 2016 21:55
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Pluskut Tukker posted:He's probably the most influential economist in Germany. Also one of the more idiotic. He compared managers to Jews as "taking the blame" for the 2007 crisis for god's sake. Luckily, since most of his predictions turn out to be bullshit he get's less airtime in the last few years. Also the most goony beard of all the poo poo-stirrer.
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Jul 11, 2016 05:41
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Reading through that austerity book by Mark Blyth now. Only 70 pages in but it's a pretty grim read so far. The euro sounds more hosed than ever, the european situation sounds more hosed than ever.
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Jul 11, 2016 08:38
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His Divine Shadow posted:Reading through that austerity book by Mark Blyth now. Only 70 pages in but it's a pretty grim read so far. The euro sounds more hosed than ever, the european situation sounds more hosed than ever. You don't know much about European history I see.
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Jul 11, 2016 10:46
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Oh pedantry, how original.
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Jul 11, 2016 10:49
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His Divine Shadow posted:Reading through that austerity book by Mark Blyth now. Only 70 pages in but it's a pretty grim read so far. The euro sounds more hosed than ever, the european situation sounds more hosed than ever. Please tell me when the European situation was less hosed than with the Euro?
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Jul 11, 2016 11:06
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GaussianCopula posted:Please tell me when the European situation was less hosed than with the Euro? A brief window between the 27th of June and the 2nd of July in 1983.
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Jul 11, 2016 11:10
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Tesseraction posted:A brief window between the 27th of June and the 2nd of July in 1983. Nah, you'd need to go back to before Thatcher was in the European Communities.
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Jul 11, 2016 11:49
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https://twitter.com/StefanLeifert/status/752491553503973376
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Jul 11, 2016 14:43
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I've read a lot about how Greece has had high levels of debt for basically forever and they fudged numbers to get into the EU. After getting into the EU, they exploited the new stabler economy by borrowing like crazy and when 2008 came, it all backfired. By "they" I mean the politicians and bankers who were allowed to get away with all this and not Mr and Mrs Citizen Papadopoulos. How much truth is there to this and if true, how does the responsibility lie with Germany?
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Jul 11, 2016 23:53
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Baxta posted:I've read a lot about how Greece has had high levels of debt for basically forever and they fudged numbers to get into the EU. After getting into the EU, they exploited the new stabler economy by borrowing like crazy and when 2008 came, it all backfired. By "they" I mean the politicians and bankers who were allowed to get away with all this and not Mr and Mrs Citizen Papadopoulos. That's a pretty accurate picture of what happened and Germany is responsible because we let them in for political reasons.
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Jul 12, 2016 00:01
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German and French banks loaned Greece the money, then when Greece couldn't pay germany forced the rest of the EU to loan Greece money, which was then immediately payed back to those banks. Greece was left with the debt, the banks never had to take the hit for loaning money to someone who can't pay it back, and the taxpayers were left with the bill. What should've happened is Greece defaulting and leaving the Euro, and the banks that were too big to fail should've been bailed out directly but also nationalized.
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Jul 12, 2016 00:05
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doverhog posted:German and French banks loaned Greece the money, then when Greece couldn't pay germany forced the rest of the EU to loan Greece money, which was then immediately payed back to those banks. Greece was left with the debt, the banks never had to take the hit for loaning money to someone who can't pay it back, and the taxpayers were left with the bill. Yeah it really sounds like Greece should never have been allowed to join the EU. They would have still been lent money though, just at higher interest rates. I find it odd that there seems to be a lot of blame going to the lenders and little to the borrowers. It seems logical that if Greece lied about their economical figures and people lent them money based on that information, it would hardly be the fault of the lenders...
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Jul 12, 2016 00:12
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It's the responsibility of a lender to not believe whatever lies someone tells them to get money. Once the money is handed over, if the borrower cannot pay it back, the bank loses that money. They are not supposed to get it from tax payers instead.
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Jul 12, 2016 00:15
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doverhog posted:It's the responsibility of a lender to not believe whatever lies someone tells them to get money. Once the money is handed over, if the borrower cannot pay it back, the bank loses that money. They are not supposed to get it from tax payers instead. There isn't a single country in the world where that happens to my knowledge. Even in a very simplified Bank -> consumer lending scenario, the bank can garnish wages and assets to pay back loans. Just in the case of a loan to an entire country, the entire country pays.
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Jul 12, 2016 00:20
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Yes, but Greece couldn't pay. They were handed the money to pay by the EU, so the losses will be on the EU countries instead of the banks. If there are no wages or assets to garnish the money is gone.
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Jul 12, 2016 00:23
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doverhog posted:Yes, but Greece couldn't pay. They were handed the money to pay by the EU, so the losses will be on the EU countries instead of the banks. There are of course wages and assets. One would argue its unethical to take them though as it is not the fault of the Greek people, rather their corrupt officials. Banks in general don't forgive large loans and they wont in the case of Greece. There seems to be no way to fix the Greek problem. Even if the debt was written off and a law passed to forbid lending to Greece, they would still manage to get dodgy loans due to the corrupt nature of the officials in power. I suppose the only thing that could be done is throw them out of the EU, write off the debts and let them destroy themselves. Its pretty sad.
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Jul 12, 2016 00:34
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Can't destroy themselves much worse. They had a regular, working internal business model back in the day before the crazy loans for the public sector. Just gently caress off from the eurozone and the EU, take back their own currency and let things settle. How much worse could it be? A horrible year or two? How is that worse than now? Especially since it has become clear they will never get out of the hole with the Troika.
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Jul 12, 2016 00:40
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Ligur posted:Can't destroy themselves much worse. They had a regular, working internal business model back in the day before the crazy loans for the public sector. Well not really, they have always been crippled by the corrupt actions of their governments. I don't see the "troika" writing off all debts though and even if they did, history shows that they would just screw themselves as soon as they had enough stability to borrow again. Their whole political and financial elite class need to be shot into the sun and let them start from scratch but its another thing that wont ever happen 
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Jul 12, 2016 01:26
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The only way I know how to recover from that is, from experience: - Enter default, unemployment and poverty shoots through the roof - Elect a populist government that distributes social plans to at least stimulate the economy somewhat - Have some really really good exports for a couple years, enough that even your politicians can't manage to steal it all and the country manages to prosper despite all efforts to the contrary - Congratulations your country is now back to some semblance of health. Unfortunately now the populist government is heavily entrenched in power and has ramped up its stealing efforts to 11, so the next step will be people electing a neo-liberal government that will privatize everything and you will begin the cycle anew.
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Jul 12, 2016 07:23
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Baxta posted:There isn't a single country in the world where that happens to my knowledge. Even in a very simplified Bank -> consumer lending scenario, the bank can garnish wages and assets to pay back loans. Just in the case of a loan to an entire country, the entire country pays. That's almost literally what the Troika has been doing for the last 5 years and it has only increased government debt and decreased economic activity. Thanks to your stellar 'oh but it's ethical' advice Greece is further from paying of its debts than it was when it started. You can't save yourself out of a sovereign debt crisis. A national economy is not a household you loving idiot.
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Jul 12, 2016 07:40
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At this point it's probably important to remind people that Wolfgang Schäuble reportedly offered Greece to default on their debt and quit the Euro - which the Greek government refused. The blame for the Greek shitshow lies with the Greek people who have are seemingly unable to not elect people that are only interested in their friends and clients.
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Jul 12, 2016 08:00
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