Europe snaps back at Harper over lecture on debt crisis

[BruSan]

We got a choice here; throw some money at a problem only to watch it be sent scurrying under the rug to fester for a few months and then come back to bite us again. OR Stifle ourselves and sit quietly in a corner while the Eurodumbs debate the flavour of scones they're going to have for lunch.

My suggestion would be for Haper to resist the urge to wind himself up at the behest of the U.S. or some others who remain strangely silent on this issue and forego the opportunity to act as an arbitrator on their behalf. These Eurodumbs need to hear harsh rhetoric from another source for a few days and not from a country with a budget smaller than that of most of the cities within the Eurozone.

All of these other countries that stand to lose by a Euro failure should man up and take over the bullhorn for a few licks at the tea drinkers. Til then; shut the hell up Harper! You'll get another shot at them in any case before you bend over, suck it up and write the checque.

Makes you feel good Stevie but won't change a thing. You're the guy in the back of the room wearing suspenders and horn rims who came stag to a Sadie Hawkins dance. Nobody give a rat's patoot if your widdle feelings are hurt; they still won't ask you to dance.

 

[Goober]

We got a choice here; throw some money at a problem only to watch it be sent scurrying under the rug to fester for a few months and then come back to bite us again. OR Stifle ourselves and sit quietly in a corner while the Eurodumbs debate the flavour of scones they're going to have for lunch.

My suggestion would be for Haper to resist the urge to wind himself up at the behest of the U.S. or some others who remain strangely silent on this issue and forego the opportunity to act as an arbitrator on their behalf. These Eurodumbs need to hear harsh rhetoric from another source for a few days and not from a country with a budget smaller than that of most of the cities within the Eurozone.

All of these other countries that stand to lose by a Euro failure should man up and take over the bullhorn for a few licks at the tea drinkers. Til then; shut the hell up Harper! You'll get another shot at them in any case before you bend over, suck it up and write the checque.

Makes you feel good Stevie but won't change a thing. You're the guy in the back of the room wearing suspenders and horn rims who came stag to a Sadie Hawkins dance. Nobody give a rat's patoot if your widdle feelings are hurt; they still won't ask you to dance.

The EU as a group have the financial abilities to address these issues- They do not have the legal framework- financial regulations- fiscal union- or the Political leadership.

 

[Machjo]

The basis of an integrated industrial economy is in fact to promote competition within its own borders, while protecting, especially nascent and vulnerable industry from predatory foreign competition. That does not create a isolated economy, nor does it protect industry from fair competition from abroad. It sees a cross polination of technologies as useful for both partners.

It does however have as its prime objective.. full employment and fair wages. To do that it needs a sovereign, stable national currency.. and a credit, interest rate and investment policy independent of those functions needed to control inflation. And it need permanent although flexible tariffs geared to maximizing physical productivity.

And its one the great Myths of the Great Depression.. was the result of protectionism. It had nothing to do with tariffs. The economies of the world failed because the governments of the day did not have the courage to use the resources and laws available to them to spur production.

No, protectionism did not cause the Great Depression and that's not waht I'd said. But it is well established that subsequent protectionism certainly exacerbated the situation.

Now generally speaking, protectionism does create jobs owing to increased market inefficiency, especially in the transportation industry. However, on the flip side, the psychological uncertainty of market can lead to a temporary withdrawal of investment money, thus making things worse jobwise at least in the short term.

 

[JLM]

1929 all over again.

THAT might be the best thing that could possibly happen, as it has an effect on EVERYBODY. If the generation today was to get cut back to two meals a day, they'd whine about being hard done by, during the great depression if a person got one good meal a day he was very thankful. There was more integrity then, nowadays everyone lies like a bastard (watch the T.V. ads) to get your money. People go on strike to get more money, yet you see them at A & W and Big Macs because they are too lazy to pack a lunch bucket! :smile:

 

[Kakato]

Number of reasons why it happened- and lots of economists argue over the reasons why.

 

[Machjo]

THAT might be the best thing that could possibly happen, as it has an effect on EVERYBODY. If the generation today was to get cut back to two meals a day, they'd whine about being hard done by, during the great depression if a person got one good meal a day he was very thankful. There was more integrity then, nowadays everyone lies like a bastard (watch the T.V. ads) to get your money. People go on strike to get more money, yet you see them at A & W and Big Macs because they are too lazy to pack a lunch bucket! :smile:

But when you have 20% plus unemployment nationally, voters can start voting irrationally. In Germany, hitler promissed jobs while other parties promissed democracy. Which did the people choose under the circumstances? Food, clothing and shelter generally comes before high-minded ideals.

In Canada too, like elsewhere, the far right and far left were gaining votes (we even had a communist Party member in Parliament). So we probably don't want to make so many voters that desperate.

That said, I can understand your sentiment. And one positive thing in the last depression is that the moderate right and left actually were more willing to work with each other than with the extremes. Hopefully such dire circumstances might cause the moderate right and left to become more pragmatic this time too.

 

[Goober]

And that is only the intro.

 

[earth_as_one]

MF, I don't think you understand how bad this situation has become. Greece's financial problems can't be solved by loaning more money. They are beyond the point of redemption. I'll use small even numbers to make my point about Greece's problems.

Let's assume Greece only owes $100 and they only pay 5% interest. Greece must pay their creditors at least $5 just to maintain their level of indebtedness. If they pay $6, the $5 goes towards interest and $1 goes toward the paying down the principle. Unfortunately, Greece is in a deep recession. The Greek government only collects about $5 in revenue due to the recession and they spend $3 on government programs because of increased welfare and unemployment. Only about $2 goes towards their debt. So when it comes time for Greece to make their interest payment they have to pay their creditor at least $5 or they default on their loan. In order to make the minimum $5 payment, they have to borrow $3 from another creditor to pay the first creditor. But now they owe $103. Also because the new creditor sees Greece as a high risk, they demand a higher interest rate, so Greece has to pay the second creditor 10% interest on the $3. About a year ago, the Europeans went to Greece's creditors and told them to write down Greece's debt. (They gave Greece's creditors a hair cut) Effectively Greece has promised to pay their creditors 75 cents on the dollar and the creditors wrote off the remaining 25 cents as a bad loan. Now Greece owes $75 + interest. But the interest rate is now 10% because they are a poor risk. Now they have to pay 10% on the refinanced loan ($7.50), but they still only have $5 in revenue. $3 still goes toward welfare and unemployment. Which means when it comes time for Greece to pay their creditors, they'll still have to borrow money again to do it. Now they have to borrow $4.50. Europe would like Canada to loan Greece the $4.50 they need to service their debt.

The only way Greece can get out of this mess is to declare bankruptcy and default on their loans, like Iceland did. No one loans Iceland money any more, but in a way, that's a good in the long run for Iceland.

Everyone who loans Greece money is going to loose their money. But Greece says, if you loan us another $100, we can use that money to stimulate the economy and generate more revenue, so we can pay down our debt. To me that sounds like a gambler who lost all their money and believes they can win it back if someone would just give them some seed money to gamble again.

At this point Greece has borrowed as much money as it can from their European partners, some of whom are almost in as bad shape as Greece. So now Europe wants Canada, the US, China and other nations to help finance Greece's bad debts.

Meanwhile Spain can no longer make their interest payments like Greece. They were closer to breaking even than Greece, but now they are also on the same slippery downward slope. They will also default just like Greece. Portugal and Ireland aren't far behind Spain.

What will sink Europe is when Italy finally faces a default on their loans. Italy is too big for the other European countries with good credit to prop up. When Italy defaults, they will sink the SS Europe. everyone who loaned Europe money will be lucky to see 5 cents on the dollar. Most likely the creditors will get nothing.

Another solution exists. If these poor nations seriously believe they can pay back their loans, then they should not have a problem backing up their loans with assets. Italy and other nations have gold reserves. Creditors would be far more eager to loan these nations money if they used their gold reserves as collateral. They'd also get better interest rates as gold back loans are less risky. Personally I don't think any of these nations will pay back their loans and they know it. They aren't interested in addressing their problems. Instead their leaders just want to get re-elected, which means delaying the biting the bullet until after the next election. But each time they punt their financial problem into the future, the problem comes back bigger than before and the distance they can punt it into the future becomes less and less. Crunch time is coming and Canada can do little to stop it. As you well know, the US also has debt problems and if their economy nosedives, they'll have the same problem as Greece too.

Canada's leaders would be wise to start building barriers to protect our economy from the coming storm. We should also look to China, India, South America for future growth and prosperity. Europe will collapse and they may take the US with them. Canada will be impacted too, but the more we trade with China and India, the less problems we will have. after the collapse, Europe will be an affordable travel destination again.

 

[B00Mer]

The EU boycotts our seafood because of the seal hunt...

https://secure.humanesociety.org/site/Advocacy?cmd=display&page=UserAction&id=4942

EU threatens Oil Sands ban

EU Oil Sands Fight: Canada 'Threatens Trade War' Over Possible Oil Sands Ban, The Guardian Reports

Now the EU is begging for our money, money derived from the Oil Sands and seal hunts..

I see allot of ass kissing in the future..

If Canada bails out the EU, Canada should be granted status as an EU member.. after all we are a British Commonwealth Nation and still swear allegiance to her Queen.

 

[Locutus]

Europe snaps back at Harper over lecture on debt crisis

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[coldstream]

by earth-as-one
The only way Greece can get out of this mess is to declare bankruptcy and default on their loans, like Iceland did. No one loans Iceland money any more, but in a way, that's a good in the long run for Iceland

That's right. It will have to ditch the Euro.. bring back the Drachma.. and default on its loans.That is the only way out of this mess. Iceland's biggest mistake was buying the kool-aid of the IMF.. and selling out its economy.. to the scam artists.. internal and external.. who made a fortune from facilitating it. It's redemption will only come from re-establishing its sovereignty.

That's the only answer for Spain, Italy, Ireland.. re-establish national currencies, protect key sectors of the economy with tariffs.. and then aggressively promote the building of an industrial infrastructure using its own currency and banking facilities.. in a secure and predictable environment. It's the end of the EU as a Free Trade Zone.. it's the end of the Euro... and its the end of the IMF. Good Riddance.

 

[Locutus]

Blame Canada

A devout socialist from Portugal named José Manuel Barroso has decided that it's much simpler to blame Canada for Europe's financial woes rather than accept any responsibility. Charles Adler discusses the idiocy with Professor Ian Lee, touching upon his recent related article.


One can only wonder where French citizen Thomas Mulcair sits on the issue!






Adler podcast from above link found here:



The New CharlesAdler.com - Podcast Search Engine




related story:


Endgame approaches for euro



After the many twists and turns of the past three years of the eurozone crisis, we are now at the endgame.

Yet, remarkably, after all this time, a significant number of political leaders and analysts do not understand the fundamental issues at the core of the crisis.

When the eurozone was created, the European leaders chose to admit countries of southern Europe — Greece, Portugal, Spain and Italy — although they mostly did not meet the standards established by the Maastricht Treaty that created the euro.

Even more importantly, in the judgment of a considerable number of economists including Nobel Laureate Milton Friedman and Paul Krugman, the proposed eurozone was not an optimal currency area.

According to Nobel Laureate Robert Mundell, to be successful, a currency union must include:


1) labour mobility allowing people to move from higher unemployment regions to lower unemployment regions;

2) capital mobility across the regions;

3) price and wage flexibility across the regions to facilitate balancing of competitiveness across regions;

4) fiscal transfer mechanism to facilitate sharing resources between the poorer regions and the more affluent regions.

Yet, none of these conditions was met when the euro was established because of national laws and regulations that restricted these activities.

Consequently, the countries of the European north including Germany, the Netherlands and Austria, were considerably more productive per worker hour than the countries of the European south. Prior to the euro, productivity differences were balanced through the currency exchange rates, with the Italian, Spanish, Greek and Portuguese currencies depreciating and the northern currencies appreciating.


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Endgame approaches for euro