Sovereign debt bubble thread

[Sheilbh]

Oh noes. The stock markets were depressive these last few days. The end is nigh! Really?

Anyway, I find the unemployment numbers in the Southern countries much more depressing than some stock market movements. That's real economic pain.

This is true but at the same time the longer this goes on for, and the longer capital is looking for a safe berth then the longer the economic crises in the periphery will go on for which will only increase unemployment (and make their debt and deficit more onerous).

And I think the jitteriness of investors represents very real doubts in the Eurozone.

Edit:  And of course the problem with a confidence crisis matters if it goes it can destroy a system that's actually solid.

[Tamas]

Oh noes. The stock markets were depressive these last few days. The end is nigh! Really?

Anyway, I find the unemployment numbers in the Southern countries much more depressing than some stock market movements. That's real economic pain.

This is a matter of sentiment. The situation will become hopeless when enough people decide it's hopeless.

Of course these problems have been well known for years. Heck, Kohl knew about them. But time after time after time again a real solution fails to surface, because the strong powers refuse to stop being selfish in order to correct the selfish mistakes of the weak ones. And the weaks one won't stop being selfish, even if it means Europe-wide chaos.

They have every right to do so, but then the current setup must be changed, or it will just break.

[Tamas]

Oh noes. The stock markets were depressive these last few days. The end is nigh! Really?

Anyway, I find the unemployment numbers in the Southern countries much more depressing than some stock market movements. That's real economic pain.

This is true but at the same time the longer this goes on for, and the longer capital is looking for a safe berth then the longer the economic crises in the periphery will go on for which will only increase unemployment (and make their debt and deficit more onerous).

And I think the jitteriness of investors represents very real doubts in the Eurozone.

Yep, it is what we have on a tinyer scale in Hungary: no investor in their right mind will go to a place where the rules may either change drastically any moment, or the roof might fall on their head any moment.

Uncertainity is the worst thing.

[Zanza]

The Euro is not a goal in itself. If it is detrimental to the economic prosperity of some countries, these countries should leave it.

What shouldn't happen is that we find a "solution" which basically consists of perpetually curing the symptoms, but not the reasons for imbalances in the Euro.

Of course, there would be a shock when countries leave. But that's inevitable now. Life will go on.

[Tamas]

Without a widespread Euro there is no further integration of Europe. Which means the unevitable sinkage of the continent into obscurity in the world economy.

[Richard Hakluyt]

Life goes on........I can agree with that..........but the level of comfort is important.

[Crazy_Ivan80]

Without a widespread Euro there is no further integration of Europe. Which means the unevitable sinkage of the continent into obscurity in the world economy.

thing is that most people no longer want integration. Especially not if the democratic deficit isn't rectified (it won't).

And that the germans don't want to waste their wealth on a bunch of freeriders like the greeks is quite understandable. Mentalities will have to change before southerners might be allowed to spend northerners money. We can't all be Flanders (north) and Wallonia (south)

[Zanza]

Without a widespread Euro there is no further integration of Europe. Which means the unevitable sinkage of the continent into obscurity in the world economy.

Europe will matter in the world if it prospers. I don't know if the Euro is a net benefit or not for that. If it isn't, Europe is better off without it or with a smaller Eurozone or so.

There is no will for further integration right now, neither among the electorates nor the elites.

[Tamas]

We are screwed, then.

[Iormlund]

I'm a Euro-federalist at heart, but dreaming of further integration is silly. What's really important now is whether the EU itself survives the collapse of the Eurozone. There needs to be an orderly exit mechanism put in place ASAP.

[Iormlund]

Oh noes. The stock markets were depressive these last few days. The end is nigh! Really?

Anyway, I find the unemployment numbers in the Southern countries much more depressing than some stock market movements. That's real economic pain.

Low market confidence -> high interest rates -> more cuts -> more unemployment.

Spain reached the 500 point spread a couple days ago. Another month like this one and it'll be rescue time.

[Admiral Yi]

I could be wrong, but I feel we're moving rapidly beyond the growth-austerity debate into a crisis of confidence that needs bold leadership.  Really I think it needs the kind of leadership that Merkel's failed to provide for the past 2 years which has allowed this to drag on.  I think she may not listen to 'outsiders' though I hope she does, having said that I've seen no evidence she's listened to Monti while he's been in office. 

This sounds like another way of saying Germany needs to give more free money to the PIIGS.

[Sheilbh]

This sounds like another way of saying Germany needs to give more free money to the PIIGS.

What?

[MadImmortalMan]

Sky News Newsdesk ‏ @SkyNewsBreak

AFP: German Chancellor Angela Merkel suggests Greece hold a referendum on its euro membership alongside general elections next month

[Crazy_Ivan80]

I could be wrong, but I feel we're moving rapidly beyond the growth-austerity debate into a crisis of confidence that needs bold leadership.  Really I think it needs the kind of leadership that Merkel's failed to provide for the past 2 years which has allowed this to drag on.  I think she may not listen to 'outsiders' though I hope she does, having said that I've seen no evidence she's listened to Monti while he's been in office. 

This sounds like another way of saying Germany needs to give more free money to the PIIGS.

that's because that is what it means