PIIGS will fly at the Euro's End

[Terpe]

Informed sources say Germany is looking for a Euro exit. There are certainly many rumours that Sarkozy and Merkel are seriously discussing about how to either rebuild a new Eurozone minus PIIGS (Portugal, Italy, Ireland, Greece and Spain) and others. Or, perhaps more likely how to de-construct the now dangerously unstable Eurozone.

The EFSF (European Financial Stability Facility) was set up to give full financial help and support to EU members. This was meant to be done by such things as loans, market intervention (at the nod of ECB), re-capitalisation of financial institutions and to issue bonds etc
Well they seriously failed their recent attempt to sell off E1 trillion worth of bonds only actually getting E3 billion
Note must be made that no G20 country has the notion to support either.

In reality the EFSF has lost control. No-one seems to have any idea how to solve the current financial crisis.

There are plenty of voices both globally and domestically crying foul, including the IMF and Word Bank, and clearly making warnings about an impending global financial meltdown.

Even China seems to have lost it's nerve to buy Euro debt and rescue us, and is now busy importing record amounts of Gold.

Don't even begin to think that the good ole US of A is just waiting in wings to come to our aid. No, no, and no again.
Whereas the US is not much bothered or exposed on PIIGS debt, they do have very significant exposure to Italy, France and Germany. Probably well in excess of a trillion dollars.

The status of the dollar is, quite naturally, their number one priority. Being the lender of choice and the reserve currency of the world will not be helped by allowing the dollar and US financial institutions to become embroiled in the Euro.
The Euro is finished.

I'm no way any kind of expert, I rely on news reports and the informed opinion of involved and knowledeable players.
I don't know really what I can do. I've taken some actions already to given protection to my aspirations for living in the Philippines.

Does anyone here remember those famous 'catch-phrases' of former Prime Minister Harold Wilson? No, not the one about 'white heat of technology', but the one that followed the devaluation of the pound 'it won't affect the pound in your pocket'!
Well, maybe in those days that had statement had some truth to it, but these day's I think not.

Heads of government, heads of banks and market traders do not always sing from the same song sheet. When they do, then all give the same dire warnings at the same time, you can bet you bottom Dollar,Pound and Euro that something is in the air.

[Englishman2010]

From looking at the press reports it does look as though the Euro has finished, and Britain quite rightly stayed out of it However, I can't see how Germany leaving the Euro will help them. Germany is an export driven high tech manufacturing economy, and is still doing well compared to most Euro economies. Any new German currency will be very strong, institutions will buy it and investors will buy German Government bonds, which in turn will continue to push up its value. This will hurt German exports as they will become more expensive for the international markets to buy. This has also been a problem for Japan recently as despite the problems caused by the aftermath of the tsunami, the Yen is trading at a high and is hurting Japanese exports.
IMO I think that Germany would be far better off trying to fix the mess in the Eurozone by guaranteeing more of it's debt. It might not be fair on the German taxpayer, but they helped create the monster that is the Euro, so they should fix it.
On the other hand, a strong German currency may help British exporters if our products are cheaper than theirs
The truth is, it's a real mess and no one knows how to solve it

[grahamw48]

We should never have joined this corrupt and intrusive organisation.

As expected by anyone with half a brain and a basic understanding of human nature, it has ended in disaster.

Since we joined, it has been the ruination of our country and its way of life.

Money is not everything !

All IMHO of course.

[Pete/London]

I dont see an end to the Euro, the reverse in fact, it will survive and stronger for all its present woes.
The weaker countries should never have joined in the first place and will be weeded out, and , unfortunately for us, we would have contributed to the Euro gaining in strength. I have not noticed any real weakness on the currency market with the Pound v Euro.
What I worry more about is the weakness of the City of London due to our economy and under pressure from the giants of Europe the centre of finance will move to mainland Europe.
London is becoming so dull and dangerous for the wealthy, they will flee to sunnier climes at the drop of a hat.

[Bluebirdjones]

The weaker countries should never have joined in the first place and will be weeded out
The problem is though, that France is one of these "weaker" countries... but the French will insist on being with the "strong" elements of the eurozone (Germany, Netherlands, Finland, Austria), so the problems will eventually surface again.
France will not allow itself to be relegated to a 2nd tier nation within Europe

.....the centre of finance will move to mainland Europe.
It hasn't in over 100 years, nor will it, especially if the EU introduce the tax on financial transactions.

[Pete/London]

"It hasn't in over 100 years, nor will it, especially if the EU introduce the tax on financial transactions. "

When the EU introduces the tax how will that help the City retain its position?

"The problem is though, that France is one of these "weaker" countries"

France has always managed to punch above its weight in Europe and its seems to have the nous for diplomacy at our expense.
My view is with the state of politics here we are set to become a little backwater, unless we really start to get a grip on Europe and become a central player and start to dictate some terms. Disregard the dictates we dont agree with, free movement is undermining our youth, without the bright youngsters we have no future.

[Terpe]

[QUOTE=Pete/London;323879............. unless we really start to get a grip on Europe and become a central player and start to dictate some terms. Disregard the dictates we dont agree with..........[/QUOTE]

I don't disagree with your sentiments.
What we need to be mindful of is the fact that UK cannot become a 'central player' as we are not a Euro-zone 'club-member'. We have no rights to even become a participant in the discussions that the 17 members have. Period
Additionally, whilst we may be considered an important EU member state, we cannot dictate on so many issues. Even our powers of veto can be ignored on many counts, as prescribed in the Lisbon Treaty.

The position of the UK is nowhere near as strong as you might imagine.
We very rarely have a chance to act outside of the rules.

France has only just decided to introduce austerity measures. It's own financial position is only just begining to show after years of 'papering over the cracks'.
I personally do not believe that Germany will have any appetite to put it's economic weight fully in the support of the debt risk and exposures of France.

Any idea on the total direct exposure France has with Greek debt? I have a reasonable estimate, it's scary.

I only wish UK was in a position of strength.
I often wonder just how badly our economy would be hit if we decided to leave the EU as a member state, but remained as a member of the EEA (European Economic Area), solely as an EFTA member. Of course, in that case we would then have virtually zero influence on the rules though still paying through the nose.
I'm sure some group somewhere is currently doing a risk assessment on that one and other worst, worst case scenarios.

Interesting times.

[Bluebirdjones]

When the EU introduces the tax how will that help the City retain its position?

I'm obviously missing something here.
The UK is vetoing the tax, it will NOT be introduced into the UK.

Hence, financial business will remain in London, and more than likely grow as some European operations re-locate to get around the tax.



A European financial transaction tax is unlikely to raise the sums of money projected as it would encourage firms to move overseas, Sweden's finance minister has told the BBC.

Anders Borg said Sweden abandoned its own transaction tax after most trading companies left the country.

The tax "had a very detrimental impact on our financial markets", he said.

If the European Union introduces the tax, firms could simply move to New York or Asia, Mr Borg said.

Sweden introduced a transaction tax on financial firms in the 1980s.

"Between 90%-99% of traders in bonds, equities and derivatives moved out of Stockholm to London," Mr Borg said.

[Pete/London]

If the tax is pushed through our veto will be worked around, probably with no other support in the EU.
I am thinking that if all of Europe is subject to the tax our advantage will be lost, leading to business relocating to Germany,

[Englishman2010]

If the UK leaves the EU it will become like Norway, still a member of EFTA but have no influence on EU policy, but still subject to many of it's rules.

A complete rethink of the EU is needed, in my view it needs winding back 40 years to a time when it was a Free Trading Club. Political, Legal and Financial integration doesn't work. Each member state has it's own agenda when it comes to politics, legal matters and taxation. Northern Europe tends to adopt the spirit of rules created by Eurocrats, but the latin and Meditteranean countries continue to do their own thing and stick two fingers up to the rules.

An EU made up of strong North Western Euro states - Germany, Sweden, Finland, The Netherlands and even the UK might be advantageous to the UK, but the former eastern bloc and mediterranean countries should be ditched.

[grahamw48]

Agreed.

Anyone trust the EU regs enough to buy a property in Spain ?

[Englishman2010]

Agreed.

Anyone trust the EU regs enough to buy a property in Spain ?

I bought in both Spain and Greece, fortunately I bailed out before the crisis started. Their property tax systems are completely corrupt, and it all goes on with the knowledge of the Public Notaries.

[Terpe]

I bought in both Spain and Greece, fortunately I bailed out before the crisis started. Their property tax systems are completely corrupt, and it all goes on with the knowledge of the Public Notaries.

Yes. A very accurate description.
I found this out when my brother passed away, as he 'owned' a property in Spain.

Being born in UK we are very lucky. Despite some stories to the contrary, the UK is actually a very fair and open place with little 'under-the-table' dealings.
Unlike many other EU states.

[Pete/London]

Being born in UK we are very lucky. Despite some stories to the contrary, the UK is actually a very fair and open place with little 'under-the-table' dealings.
Unlike many other EU states.

I have a love hate relationship with this country,
crap politicians , weather, overcrowded, overpaid sports stars, etc.
But at the end of the day I dont think I could live anywhere else as it still has so many good things to compensate.

[Englishman2010]

Being born in UK we are very lucky. Despite some stories to the contrary, the UK is actually a very fair and open place with little 'under-the-table' dealings.
Unlike many other EU states.

I completely agree Terpe Whatever we moan about that's wrong with the UK, the British have always had a good sense of fair play, and I would not wish to be any other nationality.