Eurozone bank bail-out.

[Leekbrookgull]

Well there must be some NSC user's who can make sense of this deal and where it will go ? Simply has Merkel 'called the shots' and the other sixteen countries have signed-up as a deal had to be conclueded and what is to stop the Euro facing a similiar crisis in 4/5 years time if the root causes are not addressed ?

 

[e77]

Short answer: Northern Europe is bailing out Southern Europe.

 

[Pondicherry]

IMO its a sticking plaster. Fundamentally you can not get out of debt by borrowing more money. Large portions of Europe live beyond their means (including the UK). Some are worse than others (Greece, Spain, Italy, Ireland, Portugal) and these countries need to fundamentally reform the way their society spends money. None of this has been addressed really and the longer its not addressed, the worse the situation becomes. When you add the USA debt problems into the equation the situation is terminal. I give it 6 months but please bear in mind I don't know what I am talking about.

 

[Uncle C]

Well there must be some NSC user's who can make sense of this deal and where it will go ? Simply has Merkel 'called the shots' and the other sixteen countries have signed-up as a deal had to be conclueded and what is to stop the Euro facing a similiar crisis in 4/5 years time if the root causes are not addressed ?

Make that 2 or 3 months. Yet another example of kicking the can down the road.

 

[e77]

The problem is debts can't be reduced without growth and growth is stagnant. However all of this is a mere warm up for the US having to one day face up to it's national debt.

 

[Seagull over Canaryland]

At the rate debts keep getting written off while at the same time loaning more Euros to bankrupt EC countries surely at some point the banks will cry enough? How many times does Greece have to be bailed out or allowed to default on its repayments? The Greeks have a non tax paying culture so must be laughing (if it wasn't so sad) at how the EC keeps it afloat.

Meanwhile where is the money that should be available to businesses to enable stimulate growth?

Just seems like very short term thinking to keep Merkel and Sarkozy in government but in the medium term will all go pear shaped. The Germans will want their pound of flesh in return for the huge subsidies it is funding for the EC. That Sarkozy seems like a right s**t and desperate to protect over exposed French banks by using our money. Interesting radio feature today saying how this trauma in the Eurozone and US economies will all play into the hands of banks in the far east and China and Brazil who are buying into all sorts of western economies. It will be interesting to reveal the extent of Chinese loans / investments.

 

[beorhthelm]

what is to stop the Euro facing a similiar crisis in 4/5 years time if the root causes are not addressed ?

well that is exactly what the financial analysts are saying, this is simply moving the problem forward a year. at least its better than the 2-3 months they being doing so far, and in theory you roll it all over then anyway. importantly its action, something clear and defined so everyone know whats going on and the markets can move on to another subject. most importantly, we arent stumping up for it.

 

[Zebedee]

The answer is simple - print more money. So says the mighty Bank of England. And yet if I were to print money, I'd be accused of fraud. All very odd.

 

[ArcticBlue]

Whilst this "bail-out" is in part about debt its zenith is a stronger more powerful Euro Parliament (EP) where all 17 members of the Euro zone have their budgets decided and approved centrally by the European Central Bank (ECB) as opposed to the sovereign state (formerly know as a country). Added to this the EP will set tax rates and social laws such as the minimum wage across the Euro zone. Oh and part of the deal, Greece get to pop a Solar Farm covering >200km2 on state owned land to keep this upgraded behemoth powered up.

The back door has been well and truly kicked in. Enjoy.

 

[cunning fergus]

The consequences of the haircut will be catastrophic for pension funds, particularly for Greek pension funds..............this has yet to play out..............get ready for major rioting in Greece.

 

[Chicken Runner61]

How the f*** can Berlusconi take a haircut -Short back & polish a the most!

 

[Leekbrookgull]

At the rate debts keep getting written off while at the same time loaning more Euros to bankrupt EC countries surely at some point the banks will cry enough? How many times does Greece have to be bailed out or allowed to default on its repayments? The Greeks have a non tax paying culture so must be laughing (if it wasn't so sad) at how the EC keeps it afloat.

Meanwhile where is the money that should be available to businesses to enable stimulate growth?

Just seems like very short term thinking to keep Merkel and Sarkozy in government but in the medium term will all go pear shaped. The Germans will want their pound of flesh in return for the huge subsidies it is funding for the EC. That Sarkozy seems like a right s**t and desperate to protect over exposed French banks by using our money. Interesting radio feature today saying how this trauma in the Eurozone and US economies will all play into the hands of banks in the far east and China and Brazil who are buying into all sorts of western economies. It will be interesting to reveal the extent of Chinese loans / investments.

But how long will these economies want to continue to 'buy' bad debt,surely even they will say enough is enough ?

 

[Leekbrookgull]

Whilst this "bail-out" is in part about debt its zenith is a stronger more powerful Euro Parliament (EP) where all 17 members of the Euro zone have their budgets decided and approved centrally by the European Central Bank (ECB) as opposed to the sovereign state (formerly know as a country). Added to this the EP will set tax rates and social laws such as the minimum wage across the Euro zone. Oh and part of the deal, Greece get to pop a Solar Farm covering >200km2 on state owned land to keep this upgraded behemoth powered up.

The back door has been well and truly kicked in. Enjoy.

I believe that what you say is correct there has to be basic accross the board tax rates etc i/e VAT and much more and these is before the 'real people' get their teeth into the matter The Money Men.

 

[sten_super]

The consequences of the haircut will be catastrophic for pension funds, particularly for Greek pension funds..............this has yet to play out..............get ready for major rioting in Greece.

This is one of the things that I find truly hilarious about the whole thing. The Greeks have been told then can write off 50% of their debts. A large proportion (I'm not sure whether or not it's a majority) of their debt is held by Greek banks, which will probably be insolvent as a result of the haircut. The solution? Nationalise the banks - so in effect we will have Greek debt being written off and then more Greek debt being created to prop up the banks, and the government has written off 50% of its debt and also acquired a formerly private institution into the process. Mental.

 

[beorhthelm]

But how long will these economies want to continue to 'buy' bad debt,surely even they will say enough is enough ?

as long as the rest of the world keep buying stuff from them, and they therefore hold massive amounts of other countries currencies, they will buy up their debt. they need to keep the money somewhere, and 3% from a euro bond or 4% from a French bank is better than 1.5% from the ECB.

...The solution? Nationalise the banks - so in effect we will have Greek debt being written off and then more Greek debt being created to prop up the banks, and the government has written off 50% of its debt and also acquired a formerly private institution into the process. Mental.

i understood that put of the bailout is e30b cash for re-capitialising the Greek banks.

 

[looney]

Wont work, even Joe Stiglitz says the Euro is finished.

 

[Triggaaar]

They're just writing off a chunk of Greece's debt - seriously? Doesn't that just send the message to others that are struggling, that there's no need to cut spending and work longer hours, just party on and we'll write off the debt?

 

[looney]

Alan Greenspan says its doomed as well, the Euroweanies are in denial.

 

[paddy]

Yesterday's deal can only work if there is major institutional change in the Eurozone, which will involve all national budgets having to be scrutinised and approved by some new body (possibly a European treasury). Major institutional change means major treaty change. And major treaty change means that there will have to be a referendum in this country. Whilst I think that referendum will clear, the fact that the 17 eurozone members will necessarily have to tie themselves into an even greater union means the UK will inevitably be marginalised. People will eventually see yesterday as the beginning of a gradual process in which the UK was forced out of Europe.

 

[sten_super]

i understood that put of the bailout is e30b cash for re-capitialising the Greek banks.

The Greek PM has announced that 'some' banks will still be nationalised as part of the recapitalisation. I don't know the ins and outs but I'd imagine that €30bn is only accessible to the public sector not the private sector - so the government will take the money and use it to prop up the banks (and nationalise them in the process).

They're just writing off a chunk of Greece's debt - seriously? Doesn't that just send the message to others that are struggling, that there's no need to cut spending and work longer hours, just party on and we'll write off the debt?

Not when it comes with swingeing austerity that will keep the economy depressed for a decade or more. This isn't an 'easy option' - it's simply the last option that was left.