Ratings giant hits Belgium as crisis lashes euro heart
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43 Comments
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0
PT24881
Belgium does not deserve the rating by an opaque rating -- an 'A' being removed for a mere 1.6% deficit above the norm of 3% ! There was much worse cases elsewhere..
0
unreconstructed
Eurogeddon.
0
Scrote
Why is the European Commission threatening Belgium with huge fines for a 4.6% budget deficit and not France, which has a similar deficit? How will a fine reduce the budget deficit?
Confidence in the Euro is evaporating and the clowns in charge cannot agree on anything. Either give the ECB the authority to buy as many bonds as is necessary to restore stability, or accept that the only way the Euro can continue is for permanent transfers of cash from north to south be established. Fines and austerity will not work.
-2
WilliB
Scrote:
Permanent transfers from North to South work only until the North is bankrupt too.
The only solution is to stop the stupid Euro experiment and return to national currencies.
Common currencies between disparate economies can not work, have never work and will never work.
0
YongYang
Issue a common bond, dismantle individual country bonds. Germany, buy everything up, go into debt and ride it out because only YOU can get the Euro out of the tunnel. Europe needs this, needs the connections, the intertwined 'destiny' those who naively say, 'break it up' have no understanding what-so-ever of European history and its need for a common cause.
1
Foxie
It's really quite simple as to why the Euro can't fail, and so therefore I would argue won't fail, and its the risk involved of that event.
There are trillions of euros in contracts written in Euros if one counts derivatives.
There is no way ex ante to agree on what the numeraire would be if the Euro ceased to exist, and so ex post there would be anarchy.
0
arrestpaul
That would be the "To Big to Fail" theory. That might work IF the participants actually make an effort to change the way they've been doing business and running their governments. There doesn't seem to be much of an effort along those lines.
It's possible, eventually, that people will lose confidence in the Euro and refuse to use it. Just a possibility.
0
arrestpaul
Apparently, they do. Wishfull thinking on your part notwithstanding.
0
WilliB
Yong Yong:
Europe needs the Euro as much as fish needs a bicycle. Europe had 50 years of success before the Euro. NOW, you see Germans complain about Greek moochers, and Greek papers printing front pages depicting Merkel as Hitler.
Before the Euro, there was no such thing. The Euro and its internal contradictions are dividing Europe, not unifying it.
(And lest you forget, there 12 non-Euro countries in the EU, and they are spared all this bad blood.)
0
WilliB
Foxie:
LOL, that is not "simple", that is simplistic. Nobody ever said Euro contracts would be void with a return to national currencies. Remember how the Euro was introduced? It was by turning the ECU from an electronic to a physical currency. A Euro breakup would simply be the reverse, by returning the Euro to ECU status. And you did not even need to dissolve it; you could keep the virtual Euro in ECU style for those who prefer to write contracts in it.
No magic, just common sense.
2
unreconstructed
The Euro was doomed from the start. Many American economists (non-Keynesians, of course) predicted its inevitable demise. Poor Europe, always assuring the rest of the world that the American Experiment has ended in failure when in actuality it is Europe that will go down...
-2
globalwatcher
That's one of the solution to EURO meltdown. However, the fact is that nobody wants to pay for someone else's sovereign debt through ECB common bond. This idea is still a pie in the sky.
0
YongYang
There was this thing called The Balkans. QED.
1
WilliB
Yong Yong:
Yugoslavia had a common currency, the Dinar. That did not not prevent the break-up of Yugoslavia. Once Yugoslavia was split, the Serbs, Croatians, Slovenians etc. hurried up to confirm their independence by introducing their own currencies. Your point?
0
WilliB
unreconstructed:
Many (if not most) European economists too. But the Euro was a political project from the start. The Euro-politicians wanted to force their megalomanic dream of a US of Europe by means of a common currency. Well, instead of the conversion they dreamed about, we got precisely the frictions of this nonsensical project which the critics predicted from the start. The critics are now proven right exactly.
-1
YongYang
The EU is essential as the mandate that stops 'proud nations'; an archaic, disastrous construct that has and still does only lead to war notably in continental Europe i.e The Balkans. The political integration is of absolute necessity. Fools would think otherwise, fools with no understanding of what has gone before.
0
WilliB
YongYang:
We are talking about the Euro currency, not the instution of the EU. Did you miss that? LOL
0
YongYang
If people can't see, that economic stability equates to political stability and vice-versa, then don't leap if you can't jump to join the dots. It's basic stuff of how larger entities strengthen ties, systems and structures.
-1
WilliB
YongYong:
So far so good. Now, the Euro currency creates economic instability and accompanying political instability. Your point?
0
YongYang
People need to see further than the horizon, look further and it's as plain as, well, a point of conclusion easy to reckon and read.
-1
WilliB
The UK foreign office is already preparing for the inevitable Euro collapse:
http://www.telegraph.co.uk/news/politics/8917077/Prepare-for-riots-in-euro-collapse-Foreign-Office-warns.html
At this point in time, an orderly Euro exit would still be possible. The longer Merkozy keep the Euro Frankenstein alive, the more chaotic and disruptive the eventual collapse will be.
Shame on the Eurocrats!
0
YongYang
Pie in the sky fantasy. No, but wait... Greece has been very orderly of late, right? Hoser for the people?
-1
Foxie
LOL, at this propaganda. It is a shame they don't mention how many blankets and Spam they have stocked in their embassies.
0
WilliB
YongYang:
No, Greece has not orderly, but if the EU politbureau forces German austerity measures on them, you have seen nothing yet.
By an orderly return national currencies at this point, it would still be possible to turn the corner. But it is 5 minutes to twelve.
0
WilliB
Foxie:
Preparing for an expected situatiun is "propaganda" now? Good grief.
0
Foxie
WilliB, OK, I will flee to Albania, the only safe country left in Europe.
1
arrestpaul
The Greeks have caused their own problems and are unable to do what is necessary to get their economy back on track. Germany is OFFERING TO HELP but incompetent Greece just wants someone else's money that will allow them to continue on as before.
What happens when that money runs out (and it will without significant changes to the way Greece operates)? Does Germany and the other nations continue to fund a losing effort or do they cut Greece loose and save themselves?
What you call "German austerity" should be an effort by Greeks for "Greek austerity".
0
YongYang
The Euro, in one form or another, ain't going anywhere but on.
0
WilliB
arrestpaul:
The Greeks could hardly avoid walking into this trap, by suddenly getting German interest rates with the Euro. Can you blame them? I don´t. And the "German austerity" comes with a de facto diktat from Brussels, asking Greece to give up its independence as a nation to a bunch of unelected Brussels bureaucrats. Would your country accept that?
"Greek austeriy" is a non-starter. Besides, austerity alone has never jump-started an economy.
Now matter how you turn it, the root cause of all this trouble is the Euro currency, and until that is removed and national currencies are returned, all that politicians can do is paper over the debt problem with more debt.
0
WilliB
The ex Dutch finance minister Frits Bolkestein admits that the only solution is a split-up of the Euro:
http://www.nrc.nl/nieuws/2011/11/26/bolkestein-noemt-opsplitsing-eurozone-onvermijdelijk/
The only people at this point who stubbornly refuse to accept this truth are the Eurocrat politicians and their sycophants in the media.
0
arrestpaul
There's no "trap". Greece doesn't have to accept foreign aid or advice and neither does Belgium. No one is forcing anyone to take their money but competently run nations are establishing certain condidtions BEFORE they ask their own taxpayers and consumers to again burden themselves because of some other countries continued inability to govern their own economies properly.
Why should German or French or any other nations taxpayers and consumers support Belgium or Greece in the style that they've been acustomed to if that style only leads to deeper debt and eventual failure?
Greece, Belgium, Ireland, and the rest always have the option of fixing their own problems.
0
WilliB
arrestpaul:
I was talking about the ability of the Greek government to suddenly borrow at low German rates once they got the Euro. If you don´t like the word "trap", then call it "irresistable temptation". In any case, they went for it and racked up massive debts.
Because they want to prevent a bankruptcy of the lender banks, of course (which are mostly in France, which explains Sarkoy´s position). But since the situation is inherently unsolvable, all they are doing is throwing ever more good money after bad money.
That is why I say: Haircut (to stop the bleeding) plus return to national currencies (to stop the disease). There is no other way. But the longer the Eurocrats wait, the bigger the pain will be.
0
WilliB
Arrestpaul:
The only option to fix their problems would be with their own currencies. As long as they are in the Euro straightjacket, they do not have an option.
0
YongYang
They wouldn't be in the Euro if they din't have options now would they, plenty left to do, no wall or corner is gonna bring down the structure, the ECB hasn't even stepped in yet. No worries you ol' cry wolfy you.
0
WilliB
YangYong:
I have no idea what you are trying to say here.
Wrong. The ECB has already (in violation of its statutes) bought PIIG junk to the tune of EUR 254 billion, and is going to buy more. I guess you missed that too.
-1
YongYang
I have no idea what you are trying to say here.
QED.
That isn't a 'step in' it's a tiptoe. Use your imagination... Oh, wait a minute.
1
Nessie
Dinar is served!
0
WilliB
Yong Yang:
You still have not explained what this word soup was supposed to mean:
Try again?
-2
YongYang
Issue a common bond, dismantle individual country bonds, then fence off the currency until it's ready again to go. Germany, buy everything up, go into debt and ride it out because only YOU can get the Euro out of the tunnel. Europe needs this, needs the connections, the intertwined 'destiny' those who naively say, 'break it up' have no understanding what-so-ever of European history and its need for a common cause.
-1
WilliB
Yong Yan,
why do you re-post an earlier message? It does not make any more sense that way. A "common bond" aka Eurobond simply cements the transfer of funds from the stronger to the weaker economies. It simply continues the problem, instead of solving it.
-1
YongYang
Nessie: Nice pun or is that bun to go with your Dinar.
0
WilliB
Even the Economist chimes in about the Euro collapse:
http://www.economist.com/node/21540255?fsrc=nlw|wwb|11-24-2011|businessthisweek
(For those who don´t keep up on the situation, the Economist has been an idological supporter of the Euro project, in spite of its name.)
The longer the Eurocrats wait with acknowledging reality, the more painful this will get.
0
YongYang
A common bond issue along with a dismantling of individual country bonds, then a fencing off of the currency until it's ready again to go. Germany, buy everything up, go into debt and ride it out because only YOU can get the Euro out of the tunnel. Europe needs this, needs the connections, the intertwined 'destiny' those who naively say, 'break it up' have no understanding what-so-ever of European history and its need for a common cause.
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