Thread: EU Future

Yikes. An adjunct to Bangyai's thread of Greece slits its wrists, now that France has gone Socialist, what of the EU? Holy f*k, most of the continent is bankrupt, but the folks are so used to entitlements, I can't see anything but disaster for their economies. What say you, Teakies?

The EU will be fine, not sure about the Euro though. Eurozone should contract, not expand. There is no point hanging onto Greece, just to save the bankers sorry arses. A few more may follow it out too. But the major economies of Europe- Germany, France & UK, are OK, Italy should manage, and the Skandi countries are basically healthy, as is Poland.

I don't see why EU bureaucrats are hanging on to this charade, and threatening to bring the whole House of Cards down, just for PIGS and bankers. I also fail to see why several of them are not being hauled before the Courts and held accountable for what is basically EU sanctioned fraud.

If an investigation was started it might lead to many places and expose many countries/states who have similar if not worse problems. It is much better to blame the powerless locals and keep the illusion afloat.

now that Greece has been saved, they can leave the EURO in their own terms, while keeping the existing debt in EURO

Greece wants to leave the EURO, it has wanted to for a while, it's Sarkomerkel who didn't want to because of the disorderly collapse of their EURO debt

now that Greece has been saved

its far from saved, and greece is just the first of a few countries who may have to leave.

Greece in chaos as Alexis Tsipras's coalition talks fail

Greece's political turmoil deepened last night after a key Leftist leader failed in his bid to form a coalition government, making fresh elections next month all but inevitable.


By Alex Spillius, Athens10:50PM BST 09 May 2012

Alexis Tsipras, whose Syriza party was the surprise runner-up in Sunday’s election and is expected to fare even better in a second election, had earlier declared the €130 billion (£104 billion) EU bail-out of Greece dead in a letter to Brussels.

He told colleagues "we cannot make true our dream of a Left-wing government" after failing in a bold challenge to the two mainstream parties, Pasok and New Democracy, to renounce the recovery plan they supported last year.

Antonis Samaras, leader of the conservative New Democracy party, who has already tried and failed to form a coalition, said the pulling out of the loan package would lead to "Greece's exit from the euro and the country's bankruptcy".

According to the constitution, today it will be the turn of Evangelos Venizelos, leader of Pasok, the formerly dominant socialist party that came third, to try and lead a coalition.

Mr Venizelos, whose party is tainted by years of corruption and mismanagement, is also expected to fail, and June 17 was yesterday being widely discussed as the date for a fresh election.

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Alexis Tsipras pledges to rip up Greece's bail-out deal 08 May 2012

The continued political uncertainty will further undermine confidence among Greece's international creditors, not least because Mr Tsipras will remain a key figure on the political scene.

His party could come first in the next election or do well enough to form a Left-wing coalition intent on tearing up the bail-out and nationalising Greek banks.

Riding high on a surge of anti-austerity sentiment in Greece and France, the charismatic Mr Tsipras even sought a meeting with François Hollande, the French socialist president-elect. Reports said Mr Tsipras was rebuffed on grounds of protocol because he is merely a party leader and not head of state.

The rising star of Greek politics, he dismayed officials in Brussels by stating in writing that the rescue plan was unacceptably harsh for the Greek people, who are enduring a fifth year of recession and 22 per cent unemployment.

Senior figures in Germany, the biggest contributing country to the bail-out, reacted firmly to the strident statements by the 37-year old former Communist.

Klaus-Peter Willsch, a close ally of Chancellor Angela Merkel, said: "We should offer Greece a controlled exit from the eurozone, without withdrawing from the European Union. The dogma that no country is allowed to leave the eurozone has already caused too much damage to European policy."

Guido Westerwelle, the German foreign minister, warned that the next loan to Greece could be withheld if it failed to keep its promises, which include identifying another €11 billion in savings by next month. "If Greece ends the reform process it has undertaken, then I can't see that the respective tranches [of aid] can be paid out," he said.

However, Angela Merkel, the German chancellor, stressed she still wants to keep Greece in the eurozone.

"I have always wanted to solve (the debt crisis) in such a way that Greece remains a member of the eurozone. Nothing about that has changed," she was quoted as saying in an interview with the daily Passauer Neue Presse.

More than 70 per cent of Greeks want to stay in the euro, but a similar proportion voted for parties that opposed the memorandum of understanding between the government and its creditors that required drastic government budget cuts and higher taxes in exchange for the loans.

The risk of Greece leaving the euro by the end of 2013 has risen to 75 per cent, according to Citigroup analysts.

A senior ally of Mr Tsipras suggested that Greece's creditors would not force it to the wall. "Our wish to stay in the eurozone is our biggest single negotiating tool," said Yiannis Bournous. "There is no European treaty that allows for one country to be kicked out."

Originally Posted by taxexile

More than 70 per cent of Greeks want to stay in the euro

That surprises me actually- typically, the knee jerk response of the public is to say "stuff the banks, it's their stoopid fault for lending irresponsibly". In other words, default. This is exactly what happened in the 'Great Rail Crash' in the USA in 1899, and affected foreign banks in particular- in fact, it sent the house of Baring broke, and they were subsequently bailed out (unlike a century later) by the Bank of England.

Dropping from the Euro is not a default as such, although the Banks will think of it much the same because they will suffer huge FX losses on their loans to Greece. A low Drachma will however make it much easier for the Greek economy to get back on it's feet.

The support for banks and large corporations in europe and not ordinary taxpayers/elecorate by governments has clearly led to a large rift between the 2.

I'm not sure the Greek citizens want an extreme party to govern them merely to get a fair deal, however they have displayed great dissention at the way in which they have been ordered to cover the stupidity of those in the investment world. We will see what the Greek nation are really made of very shortly.

The pro euro and EU parties who have failed to listen have/will suffer defeat. Sarkozy and the Greek coaltion this year, possibly Merkel in 2013. It is fair to comment that these people have been doing all in their power to keep the euro and EU dream alive at incredible expense and now appear to be running out of ideas.

Britain is also witnessing regular protests by public sector workers who are being asked to carry on with smaller pensions on the horizon, pay freezes etc: Unfortunately it appears that Cameron has more important things on his mind at this particular moment and may suffer a termination in his leadership should the truth be told.

For those leaders who have been promised great riches/friendship to support the corporate world whilst plundering the electorate's pension funds the choice is also very easy. 4/5 years of power and an extremely nice departure package thank you very much.

This great divide isn't going to go away anytime soon, expect to see more protests worldwide, not just in Europe. No easy solution out there i'm afraid.

Originally Posted by sabang

Originally Posted by taxexile

More than 70 per cent of Greeks want to stay in the euro

That surprises me actually- .

Don't want to take your whole post out of context by just quoting this, but it shouldn't really be surprising considering how the average Greeks standard of living has improved since they joined the Euro (obviously in reversal now), there was a documentary by Michael Portillo on the BBC the other day where he went to Greece talking to both politicians and your average joe in the street and the main reason the average joe in the street wanted to keep the Euro is that they blame their own politicians for squandering their money, in fact they would probably be happy to be ruled by Germany!!!!

Protesters pack the Puerta del Sol plaza in central Madrid, Saturday May 12, 2012. The protesters returned to Sol to mark the anniversary of the protest movement that inspired groups in other countries. The protests began May 15 last year and drew hundreds and thousands of people calling themselves the indignant movement. The demonstrations spread across Spain and Europe as anti-austerity sentiment grew












An example of the resentment in Spain concerning the continuous irresponsibility of bankers and those in government who support such behaviour.

In the past few days J.P. Morgan Chase revealed a trading loss of $2bn through risky investments, causing a great deal of concern for regulatory bodies. Will they ever learn?

The problem is not the saving of banks, it's the stupid policy reaction of the different government in EU, from the UK to Spain

in a "recession" asking for more austerity is a death sentence for recovery and growth, and those EU politicians have no clue when it comes to Econ 101, all they think about is government budgets recovery, not the real economy. There is a disconnect between the "government" economy and the real economy.

EU central bankers ponder Greece euro exit



Europe central bankers have been openly expressing views on the possibility of Greece leaving the eurozone as its leaders struggle to form a government.

Germany's top banker said it was up to the Greeks to decide, but if they did not keep to their bailout commitments, they would receive no new aid.

His counterpart in the Irish Republic said a Greek exit would be damaging but not necessarily fatal to the euro.

Greece is to make a final attempt at forming a government on Sunday.

President Karolos Papoulias is to meet party leaders after they failed to deliver a coalition through their own negotiations.

Greek voters punished mainstream parties which backed the bailout at last Sunday's parliamentary election.

If no new government is formed, a new election will have to be held, and opinion polls suggest Syriza - a leftist, anti-bailout party - will benefit most.

Syriza firmly rejects the terms of the most recent EU-IMF bailout, which requires tough austerity measures in return for loans worth 130bn euros ($170bn; £105bn).

in a "recession" asking for more austerity is a death sentence for recovery and growth,

so how do you buy your way out of the situation below?

for years socialst policy across europe has been spending money on vanity projects to further their own cause, there is no money left now.

socialist wastage and banker greed have destroyed everything, and now it is slowly unravelling. civilisations have fallen before, just read the history books, and they will fall again, with europe being the next to disappear.

as it gradually becomes more desperate expect more in the way of civil disturbances and anarchy. i believe the situation is insolvable at a local (european) level given the massive amounts of money owed. unless the debts are taken over by an outside source with money (china?) europe will slowly turn to dust. within 50 years it will resemble asia 50 years ago. undeveloped and poverty stricken.
and given the european personality it would be corrupt, anarchic and violent. a new africa maybe

its the way of things, the wheel just keeps on turning and we never learn. stupid politicians and even more stupid bankers have been voted to power by an even more stupid and self obsessed populace. its the nightmare turned to reality of pandering to the lowest common denominators of our brainless superficial society.

Spain's most indebted village pays the price of its profligacy

In the Spanish country just East of Madrid stands the village of Pioz, popuation 3600, which has the dubious titled of most indebted place in the troubled country writes Fiona Govan.

By Fiona Govan, Pioz7:00PM BST 11 May 2012

The new brick houses stand by the dozen, in neat rows which stretch across the sun-drenched hillside. Each has its own walled garden, solar panels on a terracotta tiled roof and space for two cars to park in the driveway.

Closer to town beneath the ancient ramparts of a 15th century castle once home to the aristocratic Mendosa family, is the municipal swimming pool, constructed four years ago to provide residents with a haven on those hot summer days.

With views across the plain to the distant snowcapped mountains north of Madrid it is promoted as a rural Spanish idyll.

But a closer look here reveals the banners offering the property deal of a lifetime are fraying at the edges and weeds are encroaching across the patios of houses they surround.

There is also a silence in the streets for the simple reason that hardly anyone lives here – all but two of the development of 100 homes stand empty.


And the pool? It is lined with a film of green algae which floats on stagnant water that won't be cleaned in time for the hottest months – because the council coffers have run dry.

This is Pioz, the town in the Guadalajara province of Castilla-La Mancha which has now earned the unwanted distinction of being the most indebted in Spain.

In fact with its projected income, Spain's Ministry of Public Administration estimates that Pioz will take 7,058 years to repay itsdebts thanks to mismanagement and a vast programme of overspending during the boom years when credit flowed and developers stampeded to put up housing estates they could never realistically hope to fill.

While eyes across Europe focus on Greece and the political turmoil that threatens to derail it, Spain's government has been working to restructure its banking sector and reassure markets that the nation won't need a bail-out.

It is in the small towns across this country that the real story of Spain's troubles can be found.

Pioz has become the symbol of a crisis-hit nation where town councils have run up debts that far surpass their income, debts which threaten to derail the government's attempt to meet strict budget deficit targets set by Brussels.

"We are crippled by debt," explained Dionisio Torres Martinez, the spokesman of Pioz town hall. "It is impossible to exaggerate how big our problems are here. In the short term we are just struggling to find the funds each month to pay for the very minimum of services, let alone meet our debt repayments."

It is a tale of hubris and mismanagement that echoes across all of Spain. Where once the fictional Don Quixote tilted at windmills, the administrators in this corner of Castilla-La Mancha had embarked on a far more damaging madness.

Some three miles from the historic centre of this town of 3,800 residents a gleaming water purification plant squats between fields of wheat.

"It looks great doesn't it?" remarked Juan Yunta Ayllon, the town councillor in charge of Public works, Services and the Environment for Pioz, surveying the site.
"And so it should. It came with a bill of 11 million euros and yet do you see anyone there, any sign of life within its gates?"

The place is abandoned because the council has no money left to operate the electricity pumps to supply the plant or to the pay the employees to run it, as a result the water supply to the town frequently cuts out.

A recycling centre next door, funded in part by a grant from the European Union, likewise stands gleaming and vacant. "We couldn't finish the road to allow the trucks to reach the site with the rubbish. The whole project is useless."

So too is the swimming pool which was opened in 2008 and came with a price tag of 2.3 million euros. "There is no money, not a spare cent, to spend on maintenance of such a luxury," explained Mr Yunta.

At night the street lighting is not switched on, road maintenance has been halted and rubbish collection is intermittent.

The town owes 16 million in outstanding bills to suppliers and is one of 2,619 councils applying to the central government for help to meet repayments.

The current mayor, Amelia Rodriguez, from Prime Minister Mariano Rajoy's conservative Popular Party, was elected last June and inevitably blames the previous socialist administration for running up the unsustainable debts.

"We are just trying to cope with what we have to do now to survive," she said. "But the number of residents just cannot supply the income needed to run a town that has expanded so quickly and now lies half empty."

The town suffers 25 per cent unemployment, the national average, and at best estimates it could put aside 2,000 euros a year to pay outstanding debts after meeting just the bare minimum of running costs.

"Yeah, life was good here. It's a beautiful place," says Ignacio, a man in his 30s, who arrived in the town square on a battered old bicycle. "I had two cars, a new house, lots of work in construction and I thought it would never end. Now I'm unemployed and live with my parents again."

Its empty houses – an estimated 600 new builds lie vacant – are gradually being looted, an expression of discontent by the town's unemployed youth and opportunism by itinerant thieves.

On one urbanisation at the far end of Pioz, all the electrical wires have been ripped from the properties, their shutters and windows stolen and the bathroom and kitchen fittings gone.

Many of the construction companies that built the new estates are in liquidation and the banks have been left with toxic assets of properties they are unlikely to ever sell, even at rock bottom prices.

The spectacular bust in 2007 of Spain's decade long building boom has left troubled banks burdened with an estimated 185 billion euros in problem loans and assets.
On Friday they were ordered by Mr Rajoy's government to set aside another 30 billion euros to shore up loans on top of a 54 billion euros fund ordered in February.

"It's all very well the government rescuing banks with public money," said Eugenio Rodriquez Barco, another resident of Pioz remarking on the part nationalisation of Bankia, Spain's fourth largest bank, last week. "But we need to a plan to bail out the town halls as well otherwise Spain will collapse."

The picture for the country appears bleak and the figures speak for themselves.
Spain has slumped into a second recession with its economy predicted to shrink a further 1.7 per cent this year. Its government has slashed public spending, cutting budgets by 27 billion this year, in a desperate attempt to reduce its public deficit to 5.3 per cent this year from 8.5 per cent in 2011.

The government is struggling to convince Brussels and the markets that it can meet the harsh demands of the eurozone's other finance ministers to save itself from following the fate of Greece, Ireland and Portugal and asking for an international rescue. More protests loom against stringent cuts in health and education as well as public sector pay and a freeze on pensions and the number of jobless threatens to rise beyond the 5.6 million Spaniards currently seeking work. Alarmingly, more than half of Spain's 18-25 year-olds are unemployed.

Silva Barrios, a 45-year-old resident of Pioz, said she worried most for her daughter's future. "She is 18-years old and just starting her adult life but what hope is there for her? There is no work here so she will mostly likely move abroad. It's very sad."
As austerity measures bite across the country, for those in Pioz some local cut backs go just too far.

The annual bullfighting fiesta, the jewel in the crown for many a community across Spain, has been cancelled this year and seems unlikely to be reinstated for the foreseeable future.

"I've been through some bad times over the years let me tell you," said elderly resident Sergio, sipping a beer at the bar on the town's square. "But to cancel the fiesta? I never thought in my lifetime that things could get so bad as this. Let me die now from the shame of this disaster we have created."

Edward Hugh, an independent economist based in Barcelona, said: “Spanish debt is reaching critical levels and the country is going to have a terrible time complying with measures imposed in Brussels.

“We need to see a clean up across the board and what Spain’s population don’t quite seem to understand is why these swingeing cuts are needed. There is a danger of it spiraling out of control."

“To put it simply,” he added. “You can’t fix this mess with chewing gum and chicken wire.”

the telegraph

Originally Posted by taxexile

so how do you buy your way out of the situation below?

with more responsible debt, unfortunately, or price crash if debt is unavailable

Originally Posted by taxexile

for years socialst policy across europe has been spending money on vanity projects to further their own cause, there is no money left now.

it's not a debt issue then, it's irresponsibility by the local governments. The debt is simply a tool. Those governments didn't know how to use that new tool and fucked it up.

Debt in irresponsible hands is a dangerous weapon,

^ So basically its a lack of accountability?

it's not a debt issue then, it's irresponsibility by the local governments

my understanding is that it was the easy loans offered to the local governments that are responsible, without the easy loans the profligacy would not have been possible.

Debt in irresponsible hands is a dangerous weapon,

exactly, socialist policy and good housekeeping have always been strangers.
it is of course too late to argue this on party political lines, but the danger comes from a backlash of extreme right politics, the politics of anger, something that europe has been very quick to adopt in the not too distant past, taking centre stage once more.

even good old blighty could get caught up in the firestorm.

it has nothing to do with socialism either,

some local officials want to show off and get into these silly projects, the problem is that the lack of control by the central government, hardly socialist structure, au contraire, it was a liberalization of the territorial governments that are bringing those disasters

Europe should have stopped at EFTA and gone no further.

Originally Posted by taxexile

even good old blighty could get caught up in the firestorm

Looking at the recent protests in the UK i'd say that we are not too far apart from the feelings of our european counterparts.

Theresa May must be completely barking mad if she believes that by cutting 20% of police complements, lowering morale with pension reform and allowances the police will come to the governments rescue during mass public protests as was witnessed in the summer of 2011. The Conservatives got a very rude awakening then but somehow seem to have suddenly forgotten those failings.

Margaret Thatcher, despite her faults, never made that simple error of judgement.

There was great resentment over Gordon Brown's incompetence as PM, even more so now the tories are making a complete ass of themselves by ordering those who voted for them to tighten their belt so that the corporate world can carry on buggering things up as usual.

Whilst ever bankers were paid to hand out loans with no accountability all will take them. Whilst ever bankers and politicians pronounced, to the world, that they had the answers to all debt, all will take them.

When the bankers turned off the tap, that was when the trouble started.

The sheeple belived what was being rammed down their throats, house prices never go down - look at the last 15 years, yes you can take equity from your house to buy another car/take another holiday. Vote for me and it will continue.

Now the bankers are in trouble they want not just your money but your kids as well. Now the politicians say you the people were too greedy, We will pass new laws to make you work an extra 10 years, it was not this government's fault but the previous ones. We didn't go along with the previous government - liars.

Get the money back from the bankers, put the lying politicians in jail and strip them of their fraudulent wealth.

New election blow for Germany's Merkel - exit polls



The SPD's Hannelore Kraft celebrates with supporters


Chancellor Angela Merkel's conservatives have suffered heavy losses in an election in Germany's most populous state, exit polls suggest.

Support for the Christian Democrats dropped from 35% to 26% in North Rhine-Westphalia, with the Social Democrats set to return to power with the Greens.
It is the Christian Democrats' worst result in the state.

Analysts say many voters rejected Mrs Merkel's tough line on fiscal discipline as a cure for state debt.

Voters in Greece, France and Italy also recently rejected austerity policies.

In another development, the exit polls suggested Germany's Pirate Party had won seats in North Rhine-Westphalia, making it their fourth state parliament.

The Pirate Party has grown in strength recently with its calls for transparency and internet freedom.

Nationally, Sunday's election will not change the balance of power, whatever the outcome but opposition leaders warn it may send an important signal ahead of national elections expected in late 2013.

Originally Posted by Marmite the Dog

Public sector areas such as the police are easily affordable and should be given any funding necessary for them to be a competent organisation

Is that a fact? Just what makes the funding cops do to make them more competent? More money to spend on donuts and coffee? England is up to its eyeballs in cops and cameras yet the efficiency of the copper's is no more improved than my manners on this board.

Save the EU and make more cops happy as there will be a lot more riots on the horizon to quell.

If the EU fails, what will they do with all those stamped out metal euros? I think one could make a killing in the metals markets on throw-aways?

Bankia shares plunge again on worries over finances

Bankia shares have fallen 50% in May

Shares in Spanish bank Bankia have continued their dramatic decline on concerns over the firm's finances.

The share price was down another 15% on Thursday, taking losses for May to 45%.

Spain denied a report in the El Mundo newspaper that customers had taken more than 1bn euros ($1.3bn; £800m) out of the bank, which is set to be part-nationalised, over the past week.

The government, meanwhile, has had to pay sharply higher rates of interest to borrow money on the bond markets.

In total, it raised 2.5bn euros ($3.2bn; £2bn) through issuing a number of different types of bonds.

On bonds due to be paid back in January 2015, it had to pay an interest rate of 4.373%, up from 2.89% in April. Governments have to pay higher returns to investors, or yields, as lenders become more concerned about a country's ability to pay the money back.

On debt maturing in April 2016, Spain had to pay an interest rate of 5.106%, up from 3.374% on 15 March.

"The auctions have gone OK, probably better than the market feared," said Peter Chatwell, interest rate strategist at the French bank, Credit Agricole.

"The market should stabilise for the moment as this is another successful funding round from Spain," he said.

On Wednesday, Spain's Prime Minister Mariano Rajoy warned that borrowing costs could become "astronomical" as fears about the weakness of its banks persist