What's up with the Euro?

[sysiphus]

Although good for us the UK being out of the Eurozone puts far too much pressure on the Germans to pick up the slack from the Mediterranean countries. France desperately needs to put in a growth spurt or the pressure on the Germans will be too much. It will be similar to how the Catalans are wanting out of Spain as they're sick of paying for everything whilst others do nothing to help themselves.

As for Ireland, I'm glad we lent them the money. We owe it to the Irish in a way we don't for other EU members in trouble. As jeremy h points out too, that £7bn is coming straight back to the UK. It gives the Irish some breathing space whilst ensuring there's no domino effect on our banks.

Spain is now pulling back into slow growth and reining in its public spending. Italy is out of recession. If Ireland can be stabilised the Eurozone will weather the crisis whilst Greece sorts itself out.

Ultimately, most EU countries with a strong pre-Euro currency could probably make a good case for why they wish they weren't in on the Euro/are glad they didn't jump on. Case in point: Scandinavia. Even if you throw out the wildcard/non-EU (uniquely fiscally sound and resource-laden) Norway, there was never a good argument for ditching the various kroner. (Take a look at the backlash every time a Swedish politician tried to jump on the bandwagon).
The EU, but more specifically the Eurozone countries, are too interlinked, given the massive differences in economic realities/planning/output, not to mention ideology. Germany has its problems, but getting to bail out PIGS is some reward for decades of fiscal prudence. When you consider that the next-strongest Eurozone nation is France, you've got serious problems...it's way too easy for the others to spend the savings of the prudent/strong few.

(I can't count the number of times my DK relatives have noted how glad they are they resisted the allure of the Euro in its early days!)

 

[slothrob]

I don't think you understand what caused the melt down and if regular citizens are not made aware of the real reason, your country will be doomed to repeat it.

What brought about the melt down was the deregulation of the banking industry to allow for loans and mortgages to portioned out into securities instruments and sold on the open financial markets. In Canada, banks were not allowed to do that. They had to have collateral to back up the loans they offered which meant that credit has been and still is much harder to come by in Canada than the US.

The deregulation fueled explosive economic growth in the past because it allowed lenders to sell off their debts and then lend even more money but now you have to pay the consequences for that decision. It created an environment where the holders for the debt were separated from the borrowers and the lenders did not have to hold as much responsibility for the debt being paid back so they were willing to take greater risks.

True. A gift to the US sponsored by the republican party: near financial collapse and generations of debt.

 

[IntelliUser]

True. A gift to the US sponsored by Freddie Mac and Fannie Mae near financial collapse and generations of debt.

Fixed that for ya.

 

[slothrob]

Fixed that for ya.

Ultimately, you need to go to the root of the problem, not another result.

The 1999 Gramm-Leach-Bliley Act, named for it's chief sponsor, republican Senator Phil Gramm, repealed banking and investment regulations put into effect during the last depression. Now he works for an investment bank. Go figure.

 

[benzslrpee]

actually, the countries tied to the Euro are probably going to want it to stay at a weaker position for the next year or so. the West is still very much the economic engine of the world. sure, China/BRIC are the newcomers to watch but their trade is largely intertwined with the West. days of easy credit? credit was only relatively free flowing for the last 10 years... at least in the US. people will manage to learn how to live without expensive items just like they did in the 80s and 90s.

The Euro is going through a bad time at the moment, but it will bounce back.
A bit dented but alive, but the larger picture is that world has changed and the WEST is no longer the economic engine of the world. The US/UK banking system where houses were seen as CASH COWS and not homes, saw to that.
The days of easy credit are over, get used to it.

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