[hotShot]

I don't know if Greece is importing much from outside the Eurozone.


About 70% Germanys exports stay inside the Eurozone, so the gain is not that big.

[mike777]

hotShot, on May 7 2010, 04:20 PM, said:

I don't know if Greece is importing much from outside the Eurozone.


About 70% Germanys exports stay inside the Eurozone, so the gain is not that big.

They could be big if Germany is more productive, as I said. Between the Euro block, the more productive producer should win, all else being equal.

[Winstonm]

mike777, on May 7 2010, 04:02 PM, said:

btw the Euro has lost about 9.5% so far this year vs USD.

A stronger dollar hurts the profits of the U.S. multinational corporations, too.

[Aberlour10]

Gerben42, on May 7 2010, 03:20 PM, said:

Although I agree that the current government has not done well so far, they have some good ideas. Their mistake was to have not hit the ground running and get their big points through until now. After this local election, the good ideas will be blocked by the opposition.

I suppose, you are afraid that the announced delay of the phase-out in the german nuclear power sector can be blocked by the opposition. The other ideas....? Hmmm the kamikaze-tax-reform? Anybody (out of the FDP) takes it in the current budget situation for simply a bad joke. Capitation fee in health service? Nobody ( out of the FDP ) wants it.

Robert

[shyams]

I think Paul Krugman argues in the NY Times that the long-term success of the Euro requires a Europe administration. This is something most countries in EuroZone would never accept.

[Gerben42]

Quote

I suppose, you are afraid that the announced delay of the phase-out in the german nuclear power sector can be blocked by the opposition. The other ideas....? Hmmm the kamikaze-tax-reform? Anybody (out of the FDP) takes it in the current budget situation for simply a bad joke. Capitation fee in health service? Nobody ( out of the FDP ) wants it.

No I'm not afraid of that. I know that it will happen, and it will be a costly mistake for everyone. Other good ideas were getting rid of the 9 months of wasted time for young men, the capping of medication prices and the health care reform that no one wants because it would show that their policies of the last 11 years have failed miserably. That's the main problem really. Germany needs big reforms but CDU/CSU is stuck in its old ways and afraid to give them up.

But back to the main point: Europe does not benefit from a weaker Euro. Okay, some exporting companies will, but the masses won't. There will be inflation and that means purchasing power will decrease. And since most of the European market is still internal, that will hurt more than it gains. If Greece is allowed to go bankrupt, this shows that the EU is strict in its course and that will stabilize the European currency.

[blackshoe]

Statement of the problem.

[Aberlour10]

Tja...the stock markets all over the world celebrate this giant Euro bailout, strange but nobody seems to be afraid that the European Central Bank lost practically its strongest "weapon" today, The Independence! Sad day for Europe. Welcome to the inflation zone.

Robert

[Gerben42]

The people are powerless. The only party that is AGAINST the bailout seems to be the marxist leninist party, and you can't vote for them.

A bad day for democracy, and a bad day for Europe.

[Winstonm]

As long as it is due to healthy selfishness, a forced public bailout will make Greek yachts float higher in the water, creating more jobs for scum scrubbers and brine brushers.

Al "The Maestro" Greenspanoli

[mike777]

If the people of Europe are powerless....I blame the people.....stop being/playing a victim.

In any event lets hope the Greek people get the government they want and deserve.

[kenberg]

mike777, on May 10 2010, 10:58 PM, said:

If the people of Europe are powerless....I blame the people.....stop being/playing a victim.

In any event lets hope the Greek people get the government they want and deserve.

The first Christmas after out marriage, we got a card from my wife's ex with the same sort of sentiment: I hope you both get everything you deserve.

To put your minds at rest, at the time of their divorce, I had not yet met Becky. That man can hold a grudge.

Yeah, yeah, this is a serious thread, stop yakking it up. Sorry.

[Aberlour10]

Gerben42, on May 10 2010, 04:07 PM, said:

The people are powerless.

and... no hope for a real change, so long all these politicans behave vs Lords of the Hedge-Funds like the rabbit in front of the snake.

[y66]

Sell the Acropolis to bail out Greece? Hadn't heard that one.

From Germany vs Europe

Quote

Germany’s commitment to the European Union has been central to its postwar rehabilitation and its economic success. For years, Germany played the role in Europe that America so frequently plays globally — the locomotive whose dynamism and demand helps turn around recessions before they deepen into depressions.

Now, at the worst possible moment, Germany is turning to nationalist illusions. Europe’s past economic successes are now viewed as German successes. Europe’s current deep problems are everyone else’s except Germany’s. That is neither realistic nor sustainable. But German politicians and commentators are callously and self-destructively feeding these ideas.

Earlier this year, when Germany was still refusing to participate in a bailout, the country’s largest newspaper by circulation, Bild, suggested Greece should sell the Acropolis to pay off its bond market creditors. (It estimated the monument could bring in $140 billion.) A senior member of Chancellor Angela Merkel’s party suggested auctioning off some of Greece’s Aegean islands. Meanwhile, a Bild poll showed a majority of Germans in favor of expelling Greece from the euro.

Hard to believe this trend won't continue to gain momentum and that tensions between Germany and other Euro-Zone leaders won't increase.

[jjbrr]

BBF should pool its resources and buy a Greek island imo

[Aberlour10]

The windmills should be reserved for The Water Cooler Convention Center

[Gerben42]

Quote

Earlier this year, when Germany was still refusing to participate in a bailout, the country’s largest newspaper by circulation, Bild, suggested Greece should sell the Acropolis to pay off its bond market creditors. (It estimated the monument could bring in $140 billion.) A senior member of Chancellor Angela Merkel’s party suggested auctioning off some of Greece’s Aegean islands. Meanwhile, a Bild poll showed a majority of Germans in favor of expelling Greece from the euro.

This has to be seen in context of the situation in Germany. The people were extremely disappointed in the government bailout of the banks, and didn't buy the story that it was the best solution. And then when finally things were improving again, some country far away that has cheated its way into the Eurozone wants us to save them. And the money will land... exactly, with the banks who own a large part of the Greek debts.

With an important regional election coming up, one can understand the unwillingness of the politicians to help the Greeks. After all, their voters are not discussing if we should help Greece, but rather if we should just let them go broke or if we should kick them out of the Euro and THEN let them go broke.

There is large resistance to save a country with a very un-German economy, in which bribes and looking away are common practice.

Germany's own currency was fine before the Euro, and when it was introduced it was promised that the new Euro would be as strong as the Mark was. Now this promise seems to no longer hold up.

[hrothgar]

Gerben42, on May 27 2010, 07:55 PM, said:

There is large resistance to save a country with a very un-German economy, in which bribes and looking away are common practice.

The bailout has little / nothing to do with "saving" Greece.

The bailout has an enormous amount to do with "saving" people who currently hold Greek debt. (As I understand matters, the biggest creditor is the European Central Bank, especially since the Germans started dumping all their Greek debt to the ECB)

I suspect that the Greeks would be far better off if they simply defaulted on all the debt, withdrew from the Euro Zone, and told all their creditors to bugger off. It would be a cold day in hell before anyone lent any money to the Greeks. Then again, I don't really think that anyone is going to lend the Greeks much in the way of money any time soon.

One way or another, the lenders are going to be the ones left holding the bag. While I understand the appeal of foreclosing on Santorini or some such, I don't see this coming to pass any time soon especially if German's are the one's doing the foreclosing.

I've spent a fair amount of time in Crete and Rhodes. The Greeks still have some very real issues regarding all that unpleasantness 65-70 years ago... Hard to believe that a cabinet member was stupid enough to stir all of this up once again.

[Aberlour10]

Gerben42, on May 27 2010, 11:55 AM, said:

Germany's own currency was fine before the Euro, and when it was introduced it was promised that the new Euro would be as strong as the Mark was. Now this promise seems to no longer hold up.

This promise included the independence of the ECB, the exactly same independence which was by far the most important "pilar" of D-Mark and the Bundesbank in after war decades. Any german politicans has ever tried to pressure this institution, it was the absolutely taboo, strongly watched by the public opinion.
And now, this promise seems to be broken forever.

Robert

[y66]

From Paul Krugman's blog today:

Quote

Some thoughts on the fiscal austerity mania now sweeping Europe: is anyone thinking seriously about how this affects the rest of the world, the US included?

We do have a framework for thinking about this issue: the Mundell-Fleming model. And according to that model (does anyone still learn this stuff?), fiscal contraction in one country under floating exchange rates is in fact contractionary for the world as a hole. The reason is that fiscal contraction leads to lower interest rates, which leads to currency depreciation, which improves the trade balance of the contracting country — partly offsetting the fiscal contraction, but also imposing a contraction on the rest of the world. (Rudi Dornbusch’s 1976 Brookings Paper went through all this.)

Now, the situation is complicated by the fact that monetary policy is up against the zero lower bound. Nonetheless, something much like this transmission mechanism seems to be happening right now, with the weakness of the euro turning eurozone fiscal contraction into a global problem.

Folks, this is getting ugly. And the US needs to be thinking about how to insulate itself from European masochism.