Greek gov't bonds downgraded to junk status, Eurozone in trouble

HiddenX said:

Germany can sell things easier in Europe with a common currency. That's true,
but the average german tax-payer has nothing from this, if he has to subsidize other countries for years, so that Germany can sell goods to them.

Besides the biggest growing markets are not in Europe, they are in China and India.

Germany is NOT a strong economy because of the Euro, Germany is a strong economy because:
1) we produce high price quality products
2) we have very strong labor unions that cooperate with industry managers
3) since 1990 we exchange wage sacrifices for job security
4) we do everything to produce more efficiently than everybody else
5) we seek price stability, social and fiscal justice

Economic growth based on debts is often a short time party and at the same time a crime against our childeren.

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I certainly give you that Germany has enjoyed a sound economic regime at least since Schröder's reforms (Harz?), but that isnt the whole picture.

As one of the worlds biggest exporters Germany benefitted greatly from

- the Euro being weaker visavi the rest of the world's currencies than the DM would have been.
- more sales to the European countries whose purchasing power went up due to the Euro (for instance Greece).

Until 2009 or so the very structural deficiencies of the Euro (that it was too weak for Germany and too strong for the PIIGS) helped the German economy a lot. In some ways the situation is similar to that of China, which also has been helped by an artificially weak currency. This goes for both the government and the tax payers (imagine how well Germany would do without it's export sector).

I agree partially with you - my conclusion is: We need (at least) two Eurozone-currencies.



With the exception of Poland and Czechia the biggest growing markets for Germany are NOT in the Eurozone. They are in China, Switzerland (!), Turkey & Russia.

Link

Greece need the following steps to rebuild their economy:

1) a haircut is inevitable, many banks and countries have to renouce a lot of money
2) return to a weaker currency
3) recreate the greek fiscal system - in it's current form it is useless
4) find new products (solar energy…), improve, relaunch tourism
5) find new strategic markets ( Africa ?)
…

EDIT: Agree on your Greek solutions, but I'd add that they need to do something about rampant tax evasion too. The grey economy is huge there.

The Swiss exports jump a lot, and you will probably find a correlation with that and the relative strength of the Swiss Franc. A strong Franc vs the Euro means they buy more German shinies So that is a case of the relatively weak Euro helping your exports! And this goes for trade with any non-Eurozone countries with stable currencies! Note how exports to the US went down as the dollar has been weakened.

One should also look at absolute levels of trade rather than growth of trade. You should also keep in mind that any changes compared to other Eurozone countries would have shown earlier in the statistics, namely around the time the Euro was introduced. By 2005 those transitionary effects shouldnt affect growth rates any more.

The fast growing trading partners grow from low levels and growth that stems from those countries modernising their economies That growth will go down or stabilise once those countries have more mature economies.

In the end countries tend to trade the most with their neighbours, and in the case of Germany I'd expect France, Poland, the Netherlands et al to stay as significant trading partners as distant China, even though those are much smaller economies. An increasing part of your exports consist of services (a substantial chunk of the sales of Bosch or whatnot consiste of services) and as services often involve moving humans around they tend to stay somewhat local.

Personally I've gone from being pro-Euro back around 2000 to feeling that I was lucky that my side lost the referendum on the matter. The common currency will likely require common fiscal policy, and I am not comfortable with that as I believe the EU should be kept as lean as possible (and the EU is not quite the colossus it's rumoured to be, in spite of the reputation as a bureaucratic giant it employs less people than Sweden's third biggest city)..

I think the culture of corruption in the southern EU countries is one of the first things that should be fixed before they are allowed again to participate in a larger coalition.

An upbeat take on the Eurozone pulling their chestnuts out of the fire.

http://news.yahoo.com/why-europe-won-t-implode-045800371.html

Contrary to what many are now predicting, Europe—reeling though it is—will not implode.

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I've done very well in the market paying attention to those that back up their claims with data and ignoring those that don't. That article has no data.

True enough. It kinda relies on the "too big to fail" philosophy without putting up any numbers. I'm trying to turn over a new leaf here, bn--sunshine and unicorns all the way.

I will take two unicorns please. And a pegasus.

EU will survive. Even if only to piss off dte and bn.

zahratustra said:

EU will survive. Even if only to piss off dte and bn.

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Those bastards!

No, I'd like to see it survive, though I think it needs to be reformed. And Greece needs to exit on their own (probably Italy as well).

zahratustra said:

EU will survive. Even if only to piss off dte and bn.

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In most ways, I'm actually indifferent to the EU itself. Plusses and minusses to be sure, but overall it's fairly neutral in my eyes. It's kinda the embodiment of "big government", but (at least from this side of the pond) it seems like the member states largely ignore it so there's just not much to justify a foamy philosophical tizzy on my part. Not a big fan of certain policies practiced by many member states, but that's not the same thing.

And yes, I know you were mostly kidding.

dteowner said:

In most ways, I'm actually indifferent to the EU itself. Plusses and minusses to be sure, but overall it's fairly neutral in my eyes. It's kinda the embodiment of "big government", but (at least from this side of the pond) it seems like the member states largely ignore it so there's just not much to justify a foamy philosophical tizzy on my part. Not a big fan of certain policies practiced by many member states, but that's not the same thing.

And yes, I know you were mostly kidding.

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Well, they invited the concept of Big Government, so its probably appropriate.

blatantninja said:

And Greece needs to exit on their own (probably Italy as well).

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Unfortunately for you, everyone decided to keep Greece within EU. You heard what they are afraid of? If GR gets out of EU, everything will crumble to pieces. It's as if you're asking to write down the death sentence for yourself, if you ban GR out of EU.

Today there'll be a vote for or against Germany supporting the next round to help Greece - the most unpleasant thing is that seemingly some politicians are regarding this as a test for or against power of their own party.

But not only the politicians are split over this matter (in several ways), but also the public is. One most unpleasant public view is that of Greece already having had millions of Euros transferred into the country (*before* the crisis, i mean !) - and STILL they are in debt … This part of the public just cannot understand why that money that had been transferred to Greece through the last 10 years wasn't used to get them out of their debts … The most cynical and most extreme view of this part of the public just sees Greece as a kind of unpleasant parasite of the E.U. .

Other parts o the public indeed regard Greece s a full member of the E. U. which must be saved by all means …

But no matter where you look to, ALL parts of the German public are becoming more and more worried that they might become poor themselves over transferring these massive amounts of money to Greece - and undoubtly the German public has growing fear that Germany might collapse one day as well because they HAVE to transfer these massive aounts of money to Greece !

The only ones who profit from all this are the bankers.
Those who hold these debts.
Interest rates and such.

Alrik Fassbauer said:

But not only the politicians are split over this matter (in several ways), but also the public is. One most unpleasant public view is that of Greece already having had millions of Euros transferred into the country (*before* the crisis, i mean !) - and STILL they are in debt … This part of the public just cannot understand why that money that had been transferred to Greece through the last 10 years wasn't used to get them out of their debts … The most cynical and most extreme view of this part of the public just sees Greece as a kind of unpleasant parasite of the E.U. .

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That happens, because they DON'T know the Greek politicians. Only we Greek citizens do know them well and here's the answer. They ate them for themselves, not for the debt they were obliged to lower. And that's why we want to ban those Greek politicians and restore the democracy and find and have the solutions, which we have in mind, in effect. The Greek politicians what they only do are to give the bill to us Greek citizens and get away from their own crimes. That's why we're striking and rioting lately.

What's worse, the Greek Eurostat intentionally changed the budget deficit thanks to that idiot president. As miss Georganta's accusations go, the real 2009 deficit is 12-13%, not 15,4%, which resulted the fact that the IMF and the Greek government signed the memorandum out for the painful high taxes and salary cuts.

Tanno said:

And that's why we want to ban those Greek politicians and restore the democracy and find and have the solutions, which we have in mind, in effect.

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LOL good luck with that , gather in squares and exchange stones with riot police or join 24 hour strikes .
In Athens metro the Greek animals will run you over to find a sit for a 10' distance (Omonoia - Peiraias) , if you think that we deserve any better from the shitheads we have for government you are dead wrong.

Tragos, no, dude. :lol:

We don't deserve to sit in any places. Only the old people do deserve a seat, since they can't move this much. I do have a lot of energy, a lot that I can use to kill those government shitholes. And can you describe why do the shithead deserve much than us? Because of the famous phrase "We ate them together!"? lol

And besides, I have been in Athens a lot of times, so much that I got used to and know how're things below.

Tanno said:

I do have a lot of energy, a lot that I can use to kill those government shitholes.

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I agree with this but we should not put poor forum in trouble, you know where this things can be talked .

Cant wait for this new stability mechanism. Its like a dream come true:
http://www.youtube.com/watch?v=rxMOW94V6xQ