Not just the primary sector (agriculture etc), these countries also had a muscled light industry in textiles and footwear. Which got nuked with the trade agreements with Asia.
They did not turn down the tap. The ECB is doing QE right now. If you think the central economies in the EU are in the clear you are seriously mistaken.
They only need to use it for part of the economy at first. In the beginning there would be a parallel economy where both currencies would be in use. Eventually the euro would vanish.
They are still predatory loans. They are not worth the assets they want to predate with the loans. Most of the money was thrown at a real estate and construction bubble.
As for the military, if Germany actually fulfilled the obligation they made to NATO back when the USA started pulling back its forces from Europe with the end of the Cold War and actually spent 3% of their GDP on defense, maybe Germany wouldn't be pissing themselves as Putin invades Ukraine. Germany spends 1.2% of GDP on defense. The United States spends 3.5% of GDP on defense.
The "highly inefficient" Greek economy is partly due to a lack of access to markets. If I am a Greek making shirts with $1 USD of materials and labor costs and sell them to you for $5 USD, then you resell the same shirts for $50 USD after putting a different label you are the most "productive" of the two laborers. In other words economic "efficiency" measured in USD, or whatever, is mostly bullshit. Which is why people have PPP and things like that.
enjoy having your money... devalued to a small fraction of its former value while the cost of all of your imports shoots up, without a corresponding export boost because you hardly export anything compared to the size of your economy
Ah but a large amount of the money was withdrawn from their accounts in Greece already. So what will happen, to rich people at least, is suddenly the Greek economy will devalue, salaries will become lower, everything cheaper, and they'll have more wealth than they had before. At the same time poor Greeks will instantly get haircuts in their loans renominated in the new depreciated currency at the same time as the banks and the state don't pay back the loans in full just like Argentina or Iceland did.
The tourists will come because vacations are cheaper. Heck they have been going to Tunisia and it's an Al-Qaeda infested hole.
Oh and about the rest of your talk: unemployed people do not create wealth. The troika has expanded the unemployed mass everywhere they try their recipe. The EU is an increasing undemocratic organism which goes against its original mandate to increase wealth creation and well being for its citizens. It needs to adapt or die.
businessmen worldwide are VERY worried about this, because anything Euro-related has been a safe bet
For suckers maybe. Just look at the USR vs EUR or CHF vs EUR rates since last year. People started moving their bets out a long time ago. Then again Nick Leeson thought investing in Japan was a good idea too.
Doubt it. You are assuming the present situation wouldn't continue to degrade further if they did what the EU wants. All proofs goes in the opposite direction.
Actually there's a way. You tax people dry. That's what they have been doing. The problem is people without income cannot pay their debts back hence private bankruptcies leading to corporate bankruptcies and so on.
No its more like Citibank loans money to some guy who lives in the same city I do. He can't possibly ever pay it back but they lend him the money anyway. He proceeds to use the money to buy a year long trip around the world by boat being offered by Citibank to its clients. When he can't pay back Citibank forces everyone else living in the same as that one guy to pay them back.
Of course, the whole idea that supply exceeding demand can cause a crisis speaks for the absurdity of the entire economic system. It might be best to focus efforts on coming up with its replacement.
It makes sense. Because it encourages switching production to something else which people actually want. Or having more leisure time.
The pensions are only an issue because 25% unemployment means 25% less money from people paying their pension contributions. Not to mention the people who already migrated elsewhere because they couldn't find a proper job anymore.
They can easily pay the pensions, to any amount they wish, if they start their own currency. Only paper anyway.
Oh but the lenders did ask for higher rates in the peripherals. Those Germans loaned the money to Greece and Portugal because they payed them back higher interest than a German would. So now they are surprised that with higher interest comes higher risk of non-compliance? Give me a break.
The peripherals should have just done like Iceland and let the lenders burn in their own avarice.
I would be willing to bet the euros wouldn't be worth the paper they were printed on much before those drachmas would.
The wealthy have seen this coming a long time ago. See the USD vs EUR or the CHF vs EUR historic charts. They wealthy started moving their money out of the euro a year ago.
Yes. National philosophy. Which I guess explains why Iceland, Ireland, and now Finland are having the same issues with recession and increased unemployment.
Slashdot Mirror
Years probably.
No their problem is that half of what they collect in taxes is used to service debt.
Not just the primary sector (agriculture etc), these countries also had a muscled light industry in textiles and footwear. Which got nuked with the trade agreements with Asia.
They did not turn down the tap. The ECB is doing QE right now. If you think the central economies in the EU are in the clear you are seriously mistaken.
Not really. You would expect the money supply to grow with production. Money is just used as a means of exchange for goods and services.
Also having some inflation increases the velocity of money which leads to more investment and less money hoarding.
They only need to use it for part of the economy at first. In the beginning there would be a parallel economy where both currencies would be in use. Eventually the euro would vanish.
They are still predatory loans. They are not worth the assets they want to predate with the loans. Most of the money was thrown at a real estate and construction bubble.
As for the military, if Germany actually fulfilled the obligation they made to NATO back when the USA started pulling back its forces from Europe with the end of the Cold War and actually spent 3% of their GDP on defense, maybe Germany wouldn't be pissing themselves as Putin invades Ukraine. Germany spends 1.2% of GDP on defense. The United States spends 3.5% of GDP on defense.
The "highly inefficient" Greek economy is partly due to a lack of access to markets. If I am a Greek making shirts with $1 USD of materials and labor costs and sell them to you for $5 USD, then you resell the same shirts for $50 USD after putting a different label you are the most "productive" of the two laborers. In other words economic "efficiency" measured in USD, or whatever, is mostly bullshit. Which is why people have PPP and things like that.
enjoy having your money ... devalued to a small fraction of its former value while the cost of all of your imports shoots up, without a corresponding export boost because you hardly export anything compared to the size of your economy
Ah but a large amount of the money was withdrawn from their accounts in Greece already. So what will happen, to rich people at least, is suddenly the Greek economy will devalue, salaries will become lower, everything cheaper, and they'll have more wealth than they had before. At the same time poor Greeks will instantly get haircuts in their loans renominated in the new depreciated currency at the same time as the banks and the state don't pay back the loans in full just like Argentina or Iceland did.
The tourists will come because vacations are cheaper. Heck they have been going to Tunisia and it's an Al-Qaeda infested hole.
Oh and about the rest of your talk: unemployed people do not create wealth. The troika has expanded the unemployed mass everywhere they try their recipe. The EU is an increasing undemocratic organism which goes against its original mandate to increase wealth creation and well being for its citizens. It needs to adapt or die.
They have 25% unemployed. If they got full employment they would raise their GDP without needing to increase GDP/capita.
The thing is if you bleed people dry and cut their income the previously hard to pay back debts become impossible to pay back debts.
Which is why the Greeks asked for a haircut. Or for the paybacks to be done based on net exports. Not that the Germans are interested in that.
They said they want the same deal Germany got after WWII. They pay based on exports.
businessmen worldwide are VERY worried about this, because anything Euro-related has been a safe bet
For suckers maybe. Just look at the USR vs EUR or CHF vs EUR rates since last year. People started moving their bets out a long time ago.
Then again Nick Leeson thought investing in Japan was a good idea too.
Was it? West Germany had 51 million people in 1950. Greece had 7.5 million.
You aren't lending them anything you idiot. Poland isn't part of the Eurozone. Good thing too.
Out of solidarity my ass. The ECB is making profit out of these loans.
Doubt it. You are assuming the present situation wouldn't continue to degrade further if they did what the EU wants. All proofs goes in the opposite direction.
Actually there's a way. You tax people dry. That's what they have been doing. The problem is people without income cannot pay their debts back hence private bankruptcies leading to corporate bankruptcies and so on.
living in the same city.
No its more like Citibank loans money to some guy who lives in the same city I do. He can't possibly ever pay it back but they lend him the money anyway. He proceeds to use the money to buy a year long trip around the world by boat being offered by Citibank to its clients. When he can't pay back Citibank forces everyone else living in the same as that one guy to pay them back.
Of course, the whole idea that supply exceeding demand can cause a crisis speaks for the absurdity of the entire economic system. It might be best to focus efforts on coming up with its replacement.
It makes sense. Because it encourages switching production to something else which people actually want. Or having more leisure time.
The pensions are only an issue because 25% unemployment means 25% less money from people paying their pension contributions. Not to mention the people who already migrated elsewhere because they couldn't find a proper job anymore.
They can easily pay the pensions, to any amount they wish, if they start their own currency. Only paper anyway.
Oh but the lenders did ask for higher rates in the peripherals. Those Germans loaned the money to Greece and Portugal because they payed them back higher interest than a German would. So now they are surprised that with higher interest comes higher risk of non-compliance? Give me a break.
The peripherals should have just done like Iceland and let the lenders burn in their own avarice.
Don't worry about that. The Chinese are making a new car manufacturing plant in Bulgaria just next door.
I would be willing to bet the euros wouldn't be worth the paper they were printed on much before those drachmas would.
The wealthy have seen this coming a long time ago. See the USD vs EUR or the CHF vs EUR historic charts. They wealthy started moving their money out of the euro a year ago.
Yes. National philosophy. Which I guess explains why Iceland, Ireland, and now Finland are having the same issues with recession and increased unemployment.
Well duh a hybrid has like twice the parts. The ICE and the electric parts.