Euro on the brink of collapse

[Ed Anger]

Wouldn't like to be the Greek PM right now; getting told-off like a naughty schoolboy by a bunch of Germans 

The Germans should have never left. 

We all say the same about Poland.   

Perhaps not with respect to the nazis, but I have always been saying it would have probably been a good thing if Poland continued to be ruled from Berlin after 1918. Berlin has a gay mayor, for one.

Hans Frank would've kept you people in line.

[Tamas]

And people who move to New York from Kentucky would not face significant social barriers, because a huge number of people already in New York are from places like Kentucky.  We don't have anything like the (apparent) Polack clannishness.

Same can be said about Poles in London. I think you are underestimating worker mobility within the EU.

[katmai]

And people who move to New York from Kentucky would not face significant social barriers, because a huge number of people already in New York are from places like Kentucky.  We don't have anything like the (apparent) Polack clannishness.

Same can be said about Poles in London. I think you are underestimating worker mobility within the EU.

He's calling you out, get a job outside of Hungary you fucking slacker!

[The Brain]

I like that Mart has given up his Polish pride BS and is content to be considered to be on the same level as a Kentuckian. It's still optimistic sure but an improvement.

[Zanza]

Now, I freely admit I am heavily biased against the Euro, due to my (to create a quote for Europhiles) "puerile nationalism", but I would think that the citizens of Greece and Ireland would disagree with you. While "death spiral" is an exagerration, the Euro is one of the major factors in the strangulation of their economies at the moment.

Without the Euro both would be bankrupt by now. Better be in a "death spiral" than dead I think.

[Iormlund]

Yeah, but Greece is small and irrelevant. The euro government in fiscal distress that actually matters is Spain.

Spain's fine.  Their national debt's very low and for a number of years prior to the crisis they've had surpluses.  They've got a big deficit because they're particularly hard-hit by the crisis in housing/construction but the fundamentals are strong.  They've also used the crisis to push through some reform of pensions which is Spain's budgetary issue.

Spain is not fine at all. There's a lot wrong, for example dismally low productivity (especially in the public sector), underfunded R&D, regular tax evasion, abusive work conditions, stupid two-tier job security (older workers are impossible to fire, young ones are pretty much free), woefully stupid fiscal incentives (which penalize hiring people and encourage speculation), strangled rent market, dysfunctional education system, generalized corruption ... but that's nothing new.

You're right in that we're not likely to collapse anytime soon, though. From my perspective it looks like the worst has passed. Still, I don't think we're likely to grow anytime soon. We've got to feed millions of construction workers without a single usable skill, the housing sector being dead and buried for the foreseeable future.

[citizen k]

Bill Bonner, reckoning from Baltimore, Maryland...

Well, the Greek story was big this week. 'The Big Fat Greek Meltdown,'  as Justice Litle calls it. It pushed stocks and bonds down early in the  week. By the end of the week it was pushing them up.

What happened in the meantime? Well, the euro-feds made it appear that  they were going to do the same dumb things our own feds did. They said  they were going to fix the situation. Just like the US fixed Fannie Mae  and AIG!

There are 27 different nations in the European Union. And guess how  many languages? Two-hundred and thirty. That surprised us too. Spain  alone has 6 official languages.

But without doing any real research on the subject, we have discovered  one word which is common to all these languages: bailout.  Yes, dear reader, it was 'bailout'...spoken in hundreds of different  languages and dialects...that lit a fire under the financial markets  late this week. The embers were still hot yesterday; the Dow rose 106  points. Gold had it best day in weeks - up 18 bucks.

But doth a single bailout a real boom make?

Let us rephrase that. Will bailing out the spendthrift Greeks really  make American businesses more profitable?

You know the answer. It won't. In fact, it will make them less  profitable. What it does is allow the Greeks to continue spending in  the style to which they've become accustomed. And if the Greeks are  going to do that you can bet that the Irish aren't going to want cut  back. Or the Portuguese. To say nothing of the Italians. And what about  the English?

Bailing out the Greeks is a big mistake. But it's a mistake everyone  seems to want to make. There's probably a Latin dictum for this sort of  thing. But since we don't know what it is, we'll have to coin the  phrase ourselves: Imbecility begets imbecility; especially when the  bankers come out ahead.

What did you think? Who do you think the Greeks owe money to? That's  right, the big banks are behind this. They've got hundreds of billions  at stake in Greece. If the Greeks can't pay, the banks take a hit.  Since no one wants the bankers to take a loss - except for us - once  again, the feds are coming to the rescue.

Oh...why does this make US businesses LESS profitable? Well, it's a  marginal thing. But what we're witnessing is a shift of economic power  away from the private sector towards the public sector. Private  businesses no longer borrow like they used to. Now, the feds do the  borrowing and the spending. That leaves less capital...and less  spending power...in private hands. Ergo, businesses will find it harder  to make money.

They'll also find it harder to make money because interest rates will  rise. Instead of letting the bad credit risks default, the feds weaken  all credit. They're giving debt a bad name, in other words. The risk of  default for the particular country goes down; the risk of default of  the entire system increases. After all, the debt doesn't disappear. It  has to be paid by someone. Sooner or later. Guess who that will be?

[Sheilbh]

What arseclap.

[Sheilbh]

Now, I freely admit I am heavily biased against the Euro, due to my (to create a quote for Europhiles) "puerile nationalism", but I would think that the citizens of Greece and Ireland would disagree with you. While "death spiral" is an exagerration, the Euro is one of the major factors in the strangulation of their economies at the moment.

Without the Euro they'd be screwed.  As it is they're humiliated Eurozone members (and rightly so - I don't think they should be able to vote in the EU for a decade or two) without it they'd be bankrupt and doing tricks for the IMF.

Spain is not fine at all. There's a lot wrong, for example dismally low productivity (especially in the public sector), underfunded R&D, regular tax evasion, abusive work conditions, stupid two-tier job security (older workers are impossible to fire, young ones are pretty much free), woefully stupid fiscal incentives (which penalize hiring people and encourage speculation), strangled rent market, dysfunctional education system, generalized corruption ... but that's nothing new.

  Exactly, nothing new.  The new stuff is American traders wondering if Spain's about to go bankrupt.  Fiscally you're doing okay even in comparison with much of the rest of Europe.

[citizen k]

What arseclap.

So when do the bailouts end?

[Sheilbh]

What arseclap.

So when do the bailouts end?

Sorry, I didn't read the article.  I did a scan and saw 'doth and 'dear reader'

[Razgovory]

And people who move to New York from Kentucky would not face significant social barriers, because a huge number of people already in New York are from places like Kentucky.  We don't have anything like the (apparent) Polack clannishness.

Same can be said about Poles in London. I think you are underestimating worker mobility within the EU.

What percentage of Poles live in Great Britain?

[Tamas]

Marty just has no clue does he? The language barrier alone makes a cross-country move within the EU harder than any cross-state move in the US could ever be for an individual.

[Martinus]

And people who move to New York from Kentucky would not face significant social barriers, because a huge number of people already in New York are from places like Kentucky.  We don't have anything like the (apparent) Polack clannishness.

Same can be said about Poles in London. I think you are underestimating worker mobility within the EU.

What percentage of Poles live in Great Britain?

According to official statistics, at the peek (before the crisis began), nearly 2 millions and a half of Poles emigrated to other EU member states (out of which 700k to the UK alone) looking for work. The total population of Poland is something like 35 million, so I'd say that out of it maybe 20 million are during their work years (i.e. are not children or retired). So that would mean over 10% of Poles emigrated to other EU countries looking for work and 2-3% of all working Poles were in the UK). It's not a small number.

[Martinus]

Marty just has no clue does he? The language barrier alone makes a cross-country move within the EU harder than any cross-state move in the US could ever be for an individual.

Most young Europeans speak English at least. This opens labour markets in the UK and Ireland, and many of the Western European big cities (I worked for 6 months in Brussels, and I don't speak a word in Flemish and do not know French very well, for example).

Maybe your fellow Hungarians don't emigrate for work much, because noone wants to hire gypos?