ARmy Rumour SErvice

Originally Posted by Wordsmith

We seem to have gained a recruit - Cameron is to say the euro is at risk of break up.

David Cameron: it is 'make or break' for the euro - Telegraph



But fear not: Alsacien, here's the email address for No. 10. I'm sure Call Me Dave will be reassured to know there is a master plan to save the euro.

https://email.number10.gov.uk/

Wordsmith

Still not understanding what you hear, and still unable to equate it to what you don't see - action by the ECB.
Of course there is a risk, better to have the masses looking at Europe rather than the precarious position of the UK right now......works on you.
You would probably be very surprised if you actually knew what Cameron and Osbourne are actually asking for behind the rhetoric......

Originally Posted by FORMER_FYRDMAN

Even if we accept that ample funding exists, you've yet to explain the political route by which any of these funds can be deployed.

If Greece is given a free pass, then the other PIIGS will insist on the same - is that really affordable and what sort of signal does that send? Also, there are now a powerful set of political parties defined by their opposition to fiscal responsibility in the Eurozone and thus with an intrinsic inability to make cuts without losing political support. Bail them out and they'll claim victory and keep spending, insist on austerity and they'll continue to rise in the polls.

If we buy everyone out of jail this time, the fundamental issues of maladministration and/or an overly large public sector remain endemic across the EU and little or nothing is being done to address this - it is questionable whether politically anything can be done until a bad debtor fails horribly, therefore the debt problem will re-emerge. Further, cuts will become politically impossible because everyone will look at the previous bail out as evidence that the money can always be found - so, not just bad economics, very poor politics too if you're Merkel.

If there is to be a system of capital transfer, Germany will want some hefty constitutional guarantees - that can only be achieved by re-organising the EU and introducing more centralised control - that'll be politically challenging and could start triggering referendums.

You need to stop focussing exclusively on economics. Economics framed the problem but politics is what is driving it now - it is not simply a question of writing cheques and creating reassuring spreadsheets.

By the way, in post 74 you wrote:

"A default in any form or any reduced returns would wipe out almost all the capitol held in Greek banks, therefore the ECB will not let that happen.
Government asset sell offs can raise about half the needed funds - circa 50bn Euro - with the net result of an enhanced private sector rather than state run employment powering the whole mess. That cycle would need up to 5 years to realise.
Problem will remain though of income tax avoidance, massive effort is needed to tighten up, regulate and audit - and enforce.
Bubble bailiffs.....scary thought....
Despite all the huffing and panting, its still not a big deal, the Eurozone is stinking rich in centrally held assets, and Greek debt is just a bar bill from a perpetually drunk cousin.
The only scary thing would have been Spain via its exposure in Portugal, but that is now squared away, so no worries there."

Have you modified that view at all?

P.S. Wordsmith, reference predicting the political developments; we didn't have his name but it was odds on that extended EU-imposed austerity would drive and define a new set of political parties - I think we called that about three hundred pages ago while Big A was filling the cashpoint and telling us not to worry.

Just because funding exists does not mean the political situation is sorted enough to get it. The economic situation is not serious enough to warrant it, which is why there is no action being taken by the ECB at this point.
I think you need to spend a bit of time getting a basic understanding the respective roles, responsibilities and dynamics of central banking at national and Eurozone level, and national governments and the EU.

Originally Posted by Alsacien

You would probably be very surprised if you actually knew what Cameron and Osbourne are actually asking for behind the rhetoric......

Please tell, or are is just another tap on the side of the nose and a wink?

SK

Originally Posted by SKJOLD

Please tell, or are is just another tap on the side of the nose and a wink?

SK

Its no secret if you actually read what gets said rather than the soundbites the papers like to pick up on - summarised, very much in the direction of "more Europe" rather than less.
Which is not a point of view I subscribe to, as it may appear to be a quick fix, but it is not actually needed or wanted.

Originally Posted by alib

The last big action by the Troika was the ECB pouring money into the Eurozones troubled banks.

That was nothing to do with the Troika, it was purely a monetary policy decision in response to the inter-bank lending market, especially cross border, drying up. Nothing to do with helping out governments, and nothing to do with helping banks with fundamental problems.

From the Telegraph Debt Crisis Live Page.....

11.13 Shares in Bankia are plunging today, down 21.87pc. And this comes after an 11pc fall yesterday. In fact, if it ends in the red today it will be the tenth negative trading session for the government-backed lender. This morning we heard that customers had pulled €1bn from the bank in the last week alone.

First sign we had when RBS fell over was its share price dropping through the floor despite constant denials that all was well and that it wasn't in trouble! The contagion then spread to HBOS as questions started to be asked.

The Spanish Government have already nationalised 45% of it. I wonder if they realised they would be stepping in again so soon....

Originally Posted by geezer466

From the Telegraph Debt Crisis Live Page.....


First sign we had when RBS fell over was its share price dropping through the floor despite constant denials that all was well and that it wasn't in trouble! The contagion then spread to HBOS as questions started to be asked.

The Spanish Government have already nationalised 45% of it. I wonder if they realised they would be stepping in again so soon....

If memory serves, they converted 45% of the shares they already owned into voting shares in order to have a say in how things were run.
The Spanish banks are still in need of an Irish style reality check. I suspect they were optimistically hoping that things would get better externally and drive up demand - won't happen quick enough.
They should lop another 20% off the balance sheets and see what is viable and what is not, the government is perfectly capable of sorting the problem if it gets a grip.

Bloomberg is reporting that the ECB has stopped lending to some Greek banks:

ECB Stops Loans to Some Greek Banks as Draghi Talks Exit - Bloomberg

I can imagine the queues forming as I type - and then there will be a run on mattresses!

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