Re: You vill do as ve say!
 

The UK isn't "out of the woods" yet.

Re: You vill do as ve say!
 

It is the only way that the Eurozone will work and that is proven everywhere including within the UK. It looks like for political advantage Merkel is the block on progress and judging by her address to the Bundestag it looks like her way or the highway for the others. Germany with its track record of efficiency and growth would naturally rise to a controlling power within further integration and there may be historic memories for others to to find that potential situation unacceptable.

The actions by the central banks earlier this week may all be for nothing and the outcome for Europe does not look at all good.

Whether we like it or not our future is tied to the outcome both on a national level and within a global context. Mervyn King is not warning the banks to brace themselves for a financial storm because he wants to be a doom and gloom merchant. In barely concealed language he is warning of a potential financial Armageddon which is fairly unique in BofE history.

With central bankers the rhetoric is usually several degrees short of anything alarmist as spooking the markets is usually avoided. Using the usual upgrading of comments against reality I suspect he fears not just the Eurozone problems but a failure of the entire global fiat monetary system.

When the Federal Reserve gets involved in Europe's woes along with us, Japan and others they are not acting out of largesse or human kindness. If the holder of the global reserve currency is involved it is truly serious and the time of who did what or why with our politicians past and present may soon be replaced with OK where now as within a near bankrupt country we will all be in it together.

Re: Eurozone will collapse...
 

I feel it is currently the greatest challenge that western civilization faces

Re: Eurozone will collapse...
 

You can't fault German logic but I can see a whole lot of anger and resentment building up in Europe whatever happens. I hope it doesn't get nasty.

---------- Post added at 13:35 ---------- Previous post was at 13:20 ----------

Excellent post and all too accurate I fear!

Re: Eurozone will collapse...
 

that's not nearly as likely as some have recently suggested.

At the turn of the 20th century, it was accepted that a good old cavalry charge or a naval blockade was the next best thing to talking to your neighbours, if they wouldn't see things your way. Only after WW1, when it became clear that the industrial revolution had turned war into something else entirely, did nation states begin to think differently.

WW2 occurred thanks to a perfect storm of economic depression, crippling reparations and then an aggressively nationalist dictatorship that was prepared to return to the old notions of force majeure as an acceptable alternative to getting what you want at the negotiating table.

Even if Europe ends up in a serious depression, there are no lingering territorial disputes or throbbing injuries to national pride that would be likely to result in one European power chancing military action against another. Neither is there any obvious route by which a maniacal dictatorship might override any of the stable democracies that now exist across Europe.

Besides all that, Germany, to its credit, in all the negotiations on the Euro, has been hell-bent on avoiding any proposed solution that might lead to the recreation of the sort of hyper-inflation that ultimately led to the rise of Nazism.

Re: Eurozone will collapse...
 

I think you're probably right and let's hope that's the case. But if the wheels come off, the German electorate starts to suffer and perceive they've been sold a huge pup who will they vote for and what will they demand? :erm:

---------- Post added at 14:05 ---------- Previous post was at 13:52 ----------

Anyway Merkle seems to be very firm in rejecting the idea of a 'Eurobond' safety net guaranteed by all EU members. Will the Germans get their way? Whatever happened to the idea of a group of member nations all of which have a say in what happens?

http://www.guardian.co.uk/business/b...ecession-fears[

To add to the woes, the latest German government bond sale failed with 30% of the 10 year bonds being unsold.

Re: You vill do as ve say!
 

I didn't mean get sucked into the economic mire, I meant get sucked into a de facto United States of Europe that is about to take one giant step towards reality.

Re: Eurozone will collapse...
 

It would not be wise for the UK to become a member of a United States Of Europe and tied to the Euro because it is the fact we have the pound and the flexibility that goes with it that we are not in the same mess as other EU countries.

The imposition of fiscal discipline will not work because each of the countries in the EU is at a different stage of economic development and does not have the same options. There are riots in Greece now. Imagine what will happen if there was greater austerity there.It could end up like Syria with near civil war.A nation can only tolerate so much austerity.

We need to go back to being the European Free Trade Area where each EU country has its own currency maintained at a level it can afford and where it has the flexibility to adapt to changing circumstances.

Strange too that in all this talk of fiscal discipline it seems to be something that applies to others as I do not see leaders cutting their own salaries only the salaries of others.

Re: Eurozone will collapse...
 

As long as you have irresponsible Socialist spending, it doesn't matter one little bit whether it's a single currency or each to it's own.

Which leaders are you referring to?

Re: Eurozone will collapse...
 

If it's a single currency i.e. the Euro, countries will be trapped in the financial straight jacket which sees prudent countries bailing out their less prudent neighbours. If each country has its own currency its fate lies in its own hands not in the hands of outsiders, though as you say you could have a bad government spending unwisely.

As for leaders, I meant it in two senses. Firstly, that Germany and France seem to think it's other EU countries that need to apply self-discipline to their finances. Secondly, that the leaders of countries taking austerity measures minimise their loss at the expenses of others. UK ministers on salaries of 60k plus took a 5% cut while making lots of other people on lower salaries take an unnecessary 100% cut by making them redundant.They forget that some people actually have to live on the equivalent of the 5% cut which the Ministers took.

Re: Eurozone will collapse...
 

Now Jacques "up yours" Delors admits the Euro was flawed from the outset:

http://www.bbc.co.uk/news/world-europe-16016131

Re: Eurozone will collapse...
 

Yes well people like him have a peculiar habit of only 'seeing the light' when they're out of office and/or it's already too late. In typically arrogant fashion they refused to listen to those who saw it would never work and this fine mess is where that got us!

Re: Eurozone will collapse...
 

Surprise surprise, there'll be no EU deal involving the UK.

http://www.bbc.co.uk/news/uk-16104275

It seems our EU partners didn't appreciate the UK trying to avoid the City of London being effectively used as another cash cow and being put at a distinct competitive disadvantage with its competitors worldwide. I can see a blame game developing here and we can be sure that if/when the wheels come off, the UK will carry the can and if it all goes swimmingly well, it'll be nothing to do with us. Sarkozy has an election to face soon so no doubt that partially accounts for his tough stance and desire to shift any blame for what's happened in the Eurozone from he and his allies to the UK. I doubt he'd have conceded adverse rule changes with regard to the CAP which benefits France so much so it's a bit rich him objecting to the UK doing likewise with regard to the financial sector which contributes so much to our economy. Right now Cameron could do worse than stressing that point IMHO.

I'm no economist but it seems to me that the Germans have benefited greatly from a weaker Euro dragged down by the likes of Greece, Ireland and Italy so their economy is doing a lot better than might have been the case with a much higher exchange rate. Good for them.

Surely this sort of thing (putting national interests first) is one of the things that makes political union so troublesome. It's not so tough when things are good of course, but when the chips are down and countries are being 'forced' to make tough decisions with regard to their own electorates it's all very different. We're all going to find out just how difficult in due course when new rules are imposed and the Franco-German axes start to fall across Europe.

Despite Cameron's 'veto' sadly, I can see the EU 'rules' being fudged/reinterpreted to the effect that we will still be effectively subject to those rules despite them supposedly being only applicable to the Eurozone members who want to be part of any new arrangements - a new treaty in effect. Cameron believes what's being discussed now can have no bearing on the EU as a whole, Mr Barroso seems to think differently however. The real irony is that had the Eurocrats been a tad more diligent in enforcing the existing rules of the club, the likes of Greece would never have got in. I can see an awful lot of legal argument coming our way.

God only knows how sharing France's navy is going to work if the muck hits the fan somewhere in the word where we need ships.... :confused::rolleyes:

---------- Post added at 09:40 ---------- Previous post was at 08:19 ----------

I see today's the day Croatia signs up for membership of the EU in 2013 - has anyone checked their books I wonder?.... :erm:

Re: Eurozone will collapse...
 

This is very true, Germany may find it more difficult going forward if the become more responsible for the poorer performing countries in the Euro.

JJ

Re: Eurozone will collapse...
 

The first one would be unfair, it's not our fault if the EU crashes and burns. The second one would be fair, if it goes well then it won't have had anything to do with us.

Which probably won't work. A minority of existing xenophobic supporters might emboldened but the rest will blame him, his government, for their economic woes and the cuts that came as a result.

My understanding is that they can attempt to impose the bank tax without this treaty. Cameron refused to sign because he wasn't offered a safeguard from such a act in future.