France and Greece say NO to austerity

[timbha]

Hollande has said he will reverse the decision to raise the state retirement age to 62 and allow workers the right to retire at 60.

did he say that before or after the elections?

It defies logic to pay pensions for an additional 2 years when the country is already on its knees and those pensions will have to be paid for over 20 years. Has he said how he will fund those extra 2 years?

 

[jakarta]

Germany has only been re-unified since 1989 , prior to that the federal republic (West Germany) was more of a dominant force in Europe.

No it wasn't. West Germany really wasn't a force at all, more of a base for NATO forces.

One of the things Margaret Thatcher really did not want back in 1989 was a reunited Germany as she thought it would get up to its old tricks of parking Panzers on various countries front lawns.

It obviously didn't and instead it turned its back on doing anything except making lots of useful things that we all want (I plead guilty - I drive a BMW and my wife has a Mercedes)

 

[Dandyman]

Hollande has said he will reverse the decision to raise the state retirement age to 62 and allow workers the right to retire at 60.

He said he would allow some workers to retire at 60, not all.

One of my mates has just come out of the Royal Navy after 20 years and draws a small pension to put into perspective.

 

[Dandyman]

No it wasn't. West Germany really wasn't a force at all, more of a base for NATO forces.

One of the things Margaret Thatcher really did not want back in 1989 was a reunited Germany as she thought it would get up to its old tricks of parking Panzers on various countries front lawns.

It obviously didn't and instead it turned its back on doing anything except making lots of useful things that we all want (I plead guilty - I drive a BMW and my wife has a Mercedes)

I think you'll plenty of people in the former Yugoslavia think Germany did rather more than that,

 

[Chicken Runner61]

Serious question..

Why should austerity measures here work when in Greece, Italy, Spain and Portugal austerity measures have possibly left those countries with deficits that are worse, government borrowing costs are higher, and their economy has been pushed further into recession?

 

[Green Cross Code Man]

Serious question..

Why should austerity measures here work when in Greece, Italy, Spain and Portugal austerity measures have possibly left those countries with deficits that are worse, government borrowing costs are higher, and their economy has been pushed further into recession?

We introduced deficit reduction measures a lot quicker for one. Quantitative easing may have helped. Greece and Ireland were always in a worse state than us. Being tied to the euro means local governments cannot introduce their own fiscal measures i.e. interest rates etc that would suit them more. We kept our borrowing rates down because for one thing the credit agencies were confident that we meant business. There were mixed signals from Europe so that did not help and the agencies had no belief in Greece and Ireland anyway so their borrowing costs soon became prohibitive and they then could not service their debt adequately. Spain and Italy were not so bad at first but the markets became worried about contagion ie the domino effect dragging them and others down. France isn't completely out of the woods either as their borrowing costs have risen. it will be interesting to see how bad things get as a reaction to recent elections.

 

[Leekbrookgull]

We live in interesting times.

France and Greece can say what they like,the money/bond markets will actually tell them what to do.

 

[Beach Hut]

France and Greece can say what they like,the money/bond markets will actually tell them what to do.

Precisely no matter what posturing the money markets will decide their fate.

 

[Chicken Runner61]

We introduced deficit reduction measures a lot quicker for one. Quantitative easing may have helped. Greece and Ireland were always in a worse state than us. Being tied to the euro means local governments cannot introduce their own fiscal measures i.e. interest rates etc that would suit them more. We kept our borrowing rates down because for one thing the credit agencies were confident that we meant business. There were mixed signals from Europe so that did not help and the agencies had no belief in Greece and Ireland anyway so their borrowing costs soon became prohibitive and they then could not service their debt adequately. Spain and Italy were not so bad at first but the markets became worried about contagion ie the domino effect dragging them and others down. France isn't completely out of the woods either as their borrowing costs have risen. it will be interesting to see how bad things get as a reaction to recent elections.

But our austerity measures have not kicked in yet, we have only just started, theres more to come

 

[jakarta]

I think you'll plenty of people in the former Yugoslavia think Germany did rather more than that,

Sorry you'll have to remind me about this?

 

[Green Cross Code Man]

But our austerity measures have not kicked in yet, we have only just started, theres more to come

Yes. I agree. I think that most of us, when the credit crunch happened could not comprehend the scale of the problem. I can see this situation going on for years. Personally,I would have liked the powers that be to let the banks go without propping them up. I believe it would perhaps have helped in the long run to have a 'clean'system with more accountability etc. But we'll never know if that would've worked anyway.

 

[Chicken Runner61]

Things happening already - Markets are dropping

Euro down
Aus Dollar down
US Futures hit
Oil now below $97

 

[chucky1973]

What does this mean for the euro? Will it weaken against the pound or gain?

 

[beorhthelm]

Serious question..

Why should austerity measures here work when in Greece, Italy, Spain and Portugal austerity measures have possibly left those countries with deficits that are worse, government borrowing costs are higher, and their economy has been pushed further into recession?

the serious answer is, its mostly speculation. one wonders what those economies would be like if they hadnt conducted their austerity programmes, thier deficits would certainly be higher as would their cost of borrowing. in the case of Greece they would be bankrupt, they technically are anyway and just had debt rollover indefinatly.

 

[RexCathedra]

Why should austerity measures here work when in Greece, Italy, Spain and Portugal austerity measures have possibly left those countries with deficits that are worse, government borrowing costs are higher, and their economy has been pushed further into recession?

You're not looking at this like a central banker. Just because it fails in practice, that doesn't mean it fails in theory. And that's the important thing, isn't it?

 

[Leekbrookgull]

What does this mean for the euro? Will it weaken against the pound or gain?

No expert,but i would have thought the Pound will gain,but then if you really want to know ask Ed Balls.

 

[Chicken Runner61]

the serious answer is, its mostly speculation. one wonders what those economies would be like if they hadnt conducted their austerity programmes, thier deficits would certainly be higher as would their cost of borrowing. in the case of Greece they would be bankrupt, they technically are anyway and just had debt rollover indefinatly.

Why do you think that austerity programmes abroad have already been conducted? Like here the measures have been agreed but full implementation is a long way off.

Austerity programmes get agreed and the bond markets reward those countries and yields shoot higher but all thats happened is that the banking system has calmed down.

Its going to be a while yet before we really know if the measures work and the cost of borrowing and deficits may go higher yet before collapsing

 

[Beach Hut]

No expert,but i would have thought the Pound will gain,but then if you really want to know ask Ed Balls.

Talk that bloke, he talks balls

 

[Chicken Runner61]

You're not looking at this like a central banker. Just because it fails in practice, that doesn't mean it fails in theory. And that's the important thing, isn't it?

Oh Rex, you old cynic you! It does seem we can fool the people all of the time after all!

 

[Lord Bracknell]

When we were the last year, the folks we spoke to reckoned it would cost far too much to replace the euro

They were most keen to get tourists back to Greece as soon as possible to get their economy, which is 75% tourist based than worrying about getting their drachma back

Not so. Tourism contributes just 15% to Greece's Gross Domestic Product.