Eurozone will collapse...

A very bleak analysis from Newsnight's Paul Mason in Cyprus:

http://www.bbc.co.uk/news/world-21966775

Long, but worth reading in full.

[Osem]

I found this fact interesting:

Two thirds of the German shipping industry is based here and 25% of all the EU's ships are registered here.

They pay no tax on profits, no tax on the sale of ships, the crews pay no income tax, there are no rules limiting the borrowing of shipping companies...

... But now Germany is, like Captain Renault in Casablanca, "shocked, shocked" at the morality of offshore business.

Double standards anyone?

Anyway, one good thing about this whole debacle may be that what's gone on in Cyprus sees an end to the queue of small, relatively poor countries seeking admission to the club. The Eurozone has grown too big, too fast and that fact is now undeniable.

[Osem]

Here's an interesting read:

In Germany, the citizens feel aggrieved. They perceive their country as a generous donor of hard-earned cash to peoples who have let their finances go to ruin.

German taxpayers donate, the argument runs, to help those less industrious than themselves. And what, they wonder, do they get in return? Nothing but ingratitude and insult. So it seems to some Germans.

Outside the country, on the other hand, it does not seem like that at all. Perceptions are inverted. Instead of gratitude for the gifts donated, Germans feel the coldness of ingratitude for the strings attached...

http://www.bbc.co.uk/news/world-europe-21974496

... Or the heat of angry insult. The Spanish daily El Pais published (and then apologised for) a piece which said that conservative Chancellor Angela Merkel "like Hitler, has declared war on the rest of the continent".

I've long thought that this sort of discontent was inevitable as both sides understandably take a rather biased view of the same situation. Yes the Germans have stumped up loads of money but their economy has been by far the biggest beneficiary of EU policy whilst other, weaker economies have been further damaged by the lack of economic policy options open to them. If the Euro were to collapse and the DM be readopted then the German economy would soon be subject to the sort of pressures on exports which come with a currency that is strong. How long before jobs start getting shed and Germany's finger of blame was pointed at those 'ungrateful' nations who 'sabotaged' the grand EU plan? For there to be such discontent in Germany at a time when they've been doing well (for the most part) just goes to show how much more unrest there would be if the German economy really faltered and unemployment, etc. there started to climb.

Let's hope it doesn't escalate to the point where extremists on either side succeed in exploiting the situation and setting off a tinderbox of resentment and recriminations in Europe.

[Sirius]

Originally Posted by Osem

Here's an interesting read:



http://www.bbc.co.uk/news/world-europe-21974496



I've long thought that this sort of discontent was inevitable as both sides understandably take a rather biased view of the same situation. Yes the Germans have stumped up loads of money but their economy has been by far the biggest beneficiary of EU policy whilst other, weaker economies have been further damaged by the lack of economic policy options open to them. If the Euro were to collapse and the DM be readopted then the German economy would soon be subject to the sort of pressures on exports which come with a currency that is strong. How long before jobs start getting shed and Germany's finger of blame was pointed at those 'ungrateful' nations who 'sabotaged' the grand EU plan? For there to be such discontent in Germany at a time when they've been doing well (for the most part) just goes to show how much more unrest there would be if the German economy really faltered and unemployment, etc. there started to climb.

Let's hope it doesn't escalate to the point where extremists on either side succeed in exploiting the situation and setting off a tinderbox of resentment and recriminations in Europe.

Germany MUST control, its in there nature and they want to control the direct Europe is taking. Now they have tried many way to do it and the latest is financial. I am not saying they would go to war again because they will not be that stupid, however they ARE trying to be the controlling nation of the Euro and that worries me very much.

Any before Damien jumps in and claims this is me bringing up the war again its not. I am NOT saying Germany will start another war i am saying it is in there nature to control and they want to control the direction the EU is going in for there own ends and if they must do it by bailing other countries out they will. They will recall there markers in the future mark my words.

We all see how the Germans are on Holiday when they MUST have the best sun beds, the best tables, the best area around the pool and they will get up at 4.00 am to ensure they get them

I have never liked or trusted the Germans and never will, and yes i have lived in there country

[Osem]

Originally Posted by Sirius

Germany MUST control, its in there nature and they want to control the direct Europe is taking. Now they have tried many way to do it and the latest is financial. I am not saying they would go to war again because they will not be that stupid, however they ARE trying to be the controlling nation of the Euro and that worries me very much.

Any before Damien jumps in and claims this is me bringing up the war again its not. I am NOT saying Germany will start another war i am saying it is in there nature to control and they want to control the direction the EU is going in for there own ends and if they must do it by bailing other countries out they will. They will recall there markers in the future mark my words.

We all see how the Germans are on Holiday when they MUST have the best sun beds, the best tables, the best area around the pool and they will get up at 4.00 am to ensure they get them

I have never liked or trusted the Germans and never will, and yes i have lived in there country

To be fair that's mainly because most Brits are still out clubbing at 4.00am...

Germans and sunbeds? Check this out:

http://www.youtube.com/watch?v=LuIJqF8av6I

[Sirius]

Originally Posted by Osem

To be fair that's mainly because most Brits are still out clubbing at 4.00am...

Germans and sunbeds? Check this out:

http://www.youtube.com/watch?v=LuIJqF8av6I

Excellent

[Sirius]

I see France and Germany have buried there heads in the sand.

http://www.bbc.co.uk/news/uk-politics-22000196

France and Germany have decided not to contribute to a review of the impact of EU powers on the UK, it has emerged.

The review, launched last year, is seen as preparing the groundwork for the UK's renegotiation of its membership of the EU, as promised by David Cameron.

But France and Germany, who previously criticised an "a la carte" approach to Europe, have decided not to take part in the "domestic political exercise".

Lets get it over with ready for the vote.

France and Germany have previously warned the UK that it cannot pick and choose its EU membership terms.

I just wish the vote was next week and then its over and done with.

[Derek]

http://www.bbc.co.uk/news/world-europe-22058461

Portugal's prime minister has said a court ruling striking down parts of his government's budget means it will have to make other deep spending cuts.

Pedro Passos Coelho said social security, health, education and public enterprises would have to be cut.

This would allow the country to avoid a second eurozone bailout, he said.

I imagine anyone with more than €100,000 in a Portuguese bank will be quickly looking for somewhere safe to stash it.

[Osem]

No, no, no... The Cyprus bank robbery was a one-off remember!!

[Derek]

Originally Posted by Osem

No, no, no... The Cyprus bank robbery was a one-off remember!!

And if anyone believes that I have some magic beans they may be interested in.

[Osem]

I bet they're made in Germany...

[Sirius]

Originally Posted by Derek

And if anyone believes that I have some magic beans they may be interested in.

Are they Euro beans, guaranteed to grow if you are among the EU elite

Originally Posted by Osem

I bet they're made in Germany...

Well they are among the Elite

[Derek]

Oops. Looks like Cyprus might not be out the woods just yet.

http://www.guardian.co.uk/business/2...-analysis-bill

Crisis-hit Cyprus will be forced to find an extra €6bn (£5.1bn) to contribute to its own bailout under leaked updated plans for the rescue.

In total, the bill for the bailout has risen to €23bn, from an original estimate of €17bn, less than a month after the deal was agreed – and the entire extra cost will be imposed on Nicosia.

And even if they manage to find another 6 billion euros down the back of the sofa, or more likely in the accounts of their residents, they could still be in the brown stuff.

Cyprus's economy is expected to suffer a deep recession, with GDP contracting by 8.7% in 2013, and 3.9% next year. However, a government spokesman in Nicosia last week suggested the downturn this year could be far deeper, perhaps up to 13%, which could throw the bailout plans off course within months.

Can't see them being able to raise a further 6 billion, they might just let them collapse.

[Osem]

What is is they say about pride coming before a fall?

The Eurocrats need to start accepting what's been staring them in the face that the game is up and the Euro can't continue in its present form. Far better to restructure the club and allow some members to leave in a relatively orderly fashion than to carry on pursuing the grand project in denial until it all collapses. Yes there'll be short term turmoil if Cyprus and others have to leave but that prospect must have been factored in already to some extent by the markets (whose decisions aren't governed by political expediency) so it wouldn't be a complete surprise. It'd be like lancing a boil - painful in the shirt term but necessary for recovery.