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The Euro Zone Mess

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Re: The Euro Zone Mess

Postby GreekIslandGirl » Sun Jun 24, 2012 11:26 am

bsharpish wrote:Greviction is a more likely scenario


Keep changing words but the truth is dawning. The Germans are finally looking at themselves ...

According to the data on "underlying budget balances" (adjusted for the business cycle and one-offs) from the OECD, Germany has reduced the structural deficit from a peak of 3.5% of GDP in 2002 to 0.6% in 2007, a total reduction of 2.9 percentage points or about 0.6 percentage points annually.

This actually is laughable compared to what Greece has gone through: According to the OECD, Athens's structural deficit has been 12.8% of GDP in 2009 and 1.8% in 2011. This translates to an average annual reduction of almost 6 percentage points. Or in other words: in one year Greece consolidated about twice as much as the Germans did over half a decade.


http://www.guardian.co.uk/commentisfree ... wth-greece
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Re: The Euro Zone Mess

Postby supporttheunderdog » Sun Jun 24, 2012 12:17 pm

GreekIslandGirl wrote:
bsharpish wrote:Greviction is a more likely scenario


Keep changing words but the truth is dawning. The Germans are finally looking at themselves ...

According to the data on "underlying budget balances" (adjusted for the business cycle and one-offs) from the OECD, Germany has reduced the structural deficit from a peak of 3.5% of GDP in 2002 to 0.6% in 2007, a total reduction of 2.9 percentage points or about 0.6 percentage points annually.

This actually is laughable compared to what Greece has gone through: According to the OECD, Athens's structural deficit has been 12.8% of GDP in 2009 and 1.8% in 2011. This translates to an average annual reduction of almost 6 percentage points. Or in other words: in one year Greece consolidated about twice as much as the Germans did over half a decade.


http://www.guardian.co.uk/commentisfree ... wth-greece


the argument using percentage points is disingenuous if not outright mendacious if one looks at the starting points: Germany already had a very low deficit to start with compared to others: in these terms the German deficit was 3.5 % which was about 33% of the Greek Deficit: its is still about 33% of the Greek deficit

The key point is that countries like Portugal or Greece should never have allowed their structural deficits to rise to the sort of levels they did and the reason they fell so fast was because they had to be cut, before the money ran out. They had too or cuts, when they came, would have been even deeper and faster. with a lot more pain. It was not necessary for Germany to make 6% percentage points cut per annum: indeed if they had they would now have a surplus.
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Re: The Euro Zone Mess

Postby GreekIslandGirl » Sun Jun 24, 2012 12:49 pm

Stud, your support of the Germans is in keeping with some of your other extremely outmoded views.

The tide has turned and the ridiculous number fudging used to scapegoat Greece is no longer passable. The above German journalist is continuing the way towards the better Europe envisaged by Greeks, in which Germany is also having to look into itself and its practices. Only you seem to have a problem with that.
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Re: The Euro Zone Mess

Postby supporttheunderdog » Sun Jun 24, 2012 6:49 pm

One could make remarks about your own blinkered Athenocentric loyalties to that foreign government based 1000km away , or that you are as usual trying to play the man not the ball.

It is however a fact that Germany did not have the massive deficits and/or other *anking crises issues, so had no need to make the same massive cuts, further what they did , they did over time, which as the article indicated was pragmatic. Instead as the article pointed out the PIIGS have found themselves in a corner where they have been forced to take steps in a relatively short time, which has inevitably caused economic stress.

All of this might have been avoidable if they had not joined the Euro.


As its at least a part of the probelm is the fault of the Euro - primarily a Franco-German construct intended as a one size fits all and which has worked very well for the Germans, but not the PIIGS, as for the PIIGS it has been a one size does not bloody well fit at all: indeed, like a pair of trousers which fit the German economy, they are way too big for the PIIGS and have fallen down round the ankles leaving the stained underwear exposed and causing a tripping danger.

the problems may not have arisen if the nations of Europe had kept free floating currencies, rather than relying on the convergance requirements gholding good even after the date of joining the Euro.

.
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Re: The Euro Zone Mess

Postby GreekIslandGirl » Sun Jun 24, 2012 7:41 pm

Regardless, the Euro is the second strongest currency.

Its problems are a magnified form of looking at any country's regions and comparing wealth, employment, benefits, debt, standard of living etc.

For example, if you compare the north of England with the south - there are HUGE economic differences! Same across the Eurozone. But these things change. I remember when a certain region of the UK was poverty stricken until the rail-line was electrified and now it is prime territory for the wealthy commuters. Same with the Eurozone! A small infrastructure change and Bingo! And Germany is fighting for survival because Greece scores highly as one of the MOST worthwhile regions for quality of life etc in the Eurozone. :wink:
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Re: The Euro Zone Mess

Postby Hermes » Sun Jun 24, 2012 8:08 pm

supporttheunderdog wrote:This his is however a Eurozone mess not just a Greek mess so one cannot exclude for example Germany leaving the Euro...


Germany has already committed its taxpayers to many semi-disguised channels of support. The biggest is the commitment that the ECB has made through liquidity support to euro-area banks and the balancing operations of national central banks. If the euro system doesn’t survive, enormous losses will find their way back to German taxpayers.

In fact, the German tax payer is going to pay whatever happens. Either they pay to keep the eurozone afloat or they pay if the eurozone goes bust. It's a bind of their own making.
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Re: The Euro Zone Mess

Postby supporttheunderdog » Mon Jun 25, 2012 9:54 am

GreekIslandGirl wrote:Regardless, the Euro is the second strongest currency.

Its problems are a magnified form of looking at any country's regions and comparing wealth, employment, benefits, debt, standard of living etc.

For example, if you compare the north of England with the south - there are HUGE economic differences! Same across the Eurozone. But these things change. I remember when a certain region of the UK was poverty stricken until the rail-line was electrified and now it is prime territory for the wealthy commuters. Same with the Eurozone! A small infrastructure change and Bingo! And Germany is fighting for survival because Greece scores highly as one of the MOST worthwhile regions for quality of life etc in the Eurozone. :wink:


I am very well aware of the North-South divide in the UK having spent (up to the time I came to Cyprus) nearly equal portions of my life in both south and north, in that order. I saw the devastation caused by the closure of the mines, the yards, the steel works, and the businesses that supplied them, and otherwise depended on the wages of the workers, however these arose within an existing economic system with a long existing single national currency, and for reasons that did not involve profligate government over-spending or reckless bank overlending, but rather the uncompetitive nature of British Industry compared to say Japan, Korea, China, and other "rising sun" economies, where rather than us selling to them , they began selling to us and our other customers and where the nature of the infrastructure did not make a blind bit of difference.

I do not have a problem at all with small (or even big) infrastructure changes if these will be of overall benefit such as provide greater regional job oppertunities in outlying areas, however the economic woes of Northern England did not arise because of lack of infrastructure.

In that respect making an area accesible to commuters does not necassarily bring local jobs (except perhaps in local retailing) to replace local industry that may have closed down since the nature of commuting means the jobs (which create wealth) are elsewhere.,however infrastructure projects do not of themselves create jobs except in the construction phase and in later maintenance - indeed the construction and maintenance of the infrastructure becomes a drain on an economic sysrtem unless wealth is generated to cover the costs of the system and that involves the existance of farms factories factories and offices where goods and services are made, and distributed via the infrastructure: the infrastructure depends for support on being paid for by users: however Infrastructire projects will only benefit the PIIGS if these assist in the PIIGS locally producing goods and getting to market services which others buy, which could not happen if the infrastructure facilites did not exist.

Now what doe the PIIGS nations have (not controlled by EU quotas) that others want to buy and what do we need to do to get it to market?

The however will not solve the problems of profligate governments or reckless *ankers, nor a flawed imposed artificial currency system.

Of greater concern must be the willingness if not the ability of the germans to keep bailing out the Euro system. See the first item in this thread.
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Re: The Euro Zone Mess

Postby bsharpish » Mon Jun 25, 2012 4:57 pm

GreekIslandGirl wrote:Regardless, the Euro is the second strongest currency.

Its problems are a magnified form of looking at any country's regions and comparing wealth, employment, benefits, debt, standard of living etc.

For example, if you compare the north of England with the south - there are HUGE economic differences! Same across the Eurozone. But these things change. I remember when a certain region of the UK was poverty stricken until the rail-line was electrified and now it is prime territory for the wealthy commuters. Same with the Eurozone! A small infrastructure change and Bingo! And Germany is fighting for survival because Greece scores highly as one of the MOST worthwhile regions for quality of life etc in the Eurozone. :wink:



Greece scores highly On which index ? because all the ones I've looked at for 2011 and 2012 have it scoring very very poorly
,additionally many are small cross section surveys and have questionable methodology ..... Finally the Wikipedia one is very very out of date.

The OECD index seems to be the only up to date, and more importantly, credible source with a realistic statistics and models used.

http://www.oecdbetterlifeindex.org/
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Re: The Euro Zone Mess

Postby supporttheunderdog » Tue Jun 26, 2012 12:18 am

And now we become a part of the mess...

http://www.cyprus-mail.com/eu-bailout/b ... 5#comments
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Re: The Euro Zone Mess

Postby kurupetos » Tue Jun 26, 2012 1:20 am

supporttheunderdog wrote:And now we become a part of the mess...

http://www.cyprus-mail.com/eu-bailout/b ... 5#comments

Excellent. :D
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