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Ratings Agency Downgrades Italy's Debt Rating

#2
The A+ rating was being artificially maintained by other Eurozone members purchasing Italian bonds to keep the yields low.

This was inevitable really. They've a long way to go before they get to Greece's level.
 

Travelgall

MIA
Kit Reviewer
#6
Italy does have something of a functioning Tax Collection facility in the North of the Country, unlike Greece who don't have one anywhere. If there was a Greek Island with two people on it - one a Tax Collector - they'd still only get 10% of the tax owed. Portugal is the next one to go IMHO. See the Bubbles are talking about a referendum about staying in the Euro. I'd like something similar for the UK.
 
#7
Don't understand the Italian economy. Fairfew Italian cars on the streets, engineering products around, helicopters in the sky and food products on the shelfs. Compared to us their industry seems posatively booming?
 

Wordsmith

LE
Book Reviewer
#8
Italian growth has been stagnant for years - unlike Italian government spending. Another nation living beyond their means and in denial about it. Unlike the UK (which at least has a semi-realistic plan to cut the debt), Italy has just put a few sticking plasters in place. Italian debt is at 120% of GDP and set to go higher. (We are heading for 80% which is bad enough).

It's our good old friend the Euro again. Had Italy still had the lira, it would have fallen in value against the other European currencies and provided a bit of a safety value. Because Italy is in the Euro her exchange rate is fixed against (say) Germany. So Italy has steadily exported less to Germany and imported more. Italy still has some quality industry, but its not growing. And without growth, you can't afford to increase your government spending.

Italy is not yet a total basket case, but with Berlusconi at the helm, they're getting there.

Wordsmith
 
#9
Italy does have something of a functioning Tax Collection facility in the North of the Country, unlike Greece who don't have one anywhere. If there was a Greek Island with two people on it - one a Tax Collector - they'd still only get 10% of the tax owed. Portugal is the next one to go IMHO. See the Bubbles are talking about a referendum about staying in the Euro. I'd like something similar for the UK.
I read somewhere that if Milan folk declared their real earnings to the taxman they'd be by far the richest city in europe.
 

Alsacien

MIA
Moderator
#11
Italian growth has been stagnant for years - unlike Italian government spending. Another nation living beyond their means and in denial about it. Unlike the UK (which at least has a semi-realistic plan to cut the debt), Italy has just put a few sticking plasters in place. Italian debt is at 120% of GDP and set to go higher. (We are heading for 80% which is bad enough).

It's our good old friend the Euro again. Had Italy still had the lira, it would have fallen in value against the other European currencies and provided a bit of a safety value. Because Italy is in the Euro her exchange rate is fixed against (say) Germany. So Italy has steadily exported less to Germany and imported more. Italy still has some quality industry, but its not growing. And without growth, you can't afford to increase your government spending.

Italy is not yet a total basket case, but with Berlusconi at the helm, they're getting there.

Wordsmith
Yeah, because they were really much better off with the Lira were'nt they........no problems at all....
 
#12
Italy does have something of a functioning Tax Collection facility in the North of the Country, unlike Greece who don't have one anywhere. If there was a Greek Island with two people on it - one a Tax Collector - they'd still only get 10% of the tax owed. Portugal is the next one to go IMHO. See the Bubbles are talking about a referendum about staying in the Euro. I'd like something similar for the UK.
1. Italy North and South are just as bent and much of the econemy is done on the Black.

Doctors, Dentists et al have a two book rule to avoid tax. Even the average shop has a list price of sat 25 .50 fo an item . You rock up and buy it and the vendor says "Oh Ok make it 25 for cash" That goes for evertything .

2. Who/what TF are the bubbles?
 

Alsacien

MIA
Moderator
#13
1. Italy North and South are just as bent and much of the econemy is done on the Black.

Doctors, Dentists et al have a two book rule to avoid tax. Even the average shop has a list price of sat 25 .50 fo an item . You rock up and buy it and the vendor says "Oh Ok make it 25 for cash" That goes for evertything .

2. Who/what TF are the bubbles?
Bubbles - bubble and squeaks - Greeks
 

Wordsmith

LE
Book Reviewer
#15
Yeah, because they were really much better off with the Lira were'nt they........no problems at all....
It would be an interesting counter-factual. I think the Italian economy has been stagnating and thus been heading for problems for years - the question is would Italy have been better or worse off outside of the Euro.

If Greece does default (and that seems pretty likely), Italy will be even more in the firing line. A Greek default is going to do significant damage to the European economic system - an Italian default would live up to the title of this thread.

Wordsmith
 

Alsacien

MIA
Moderator
#16
It would be an interesting counter-factual. I think the Italian economy has been stagnating and thus been heading for problems for years - the question is would Italy have been better or worse off outside of the Euro.

If Greece does default (and that seems pretty likely), Italy will be even more in the firing line. A Greek default is going to do significant damage to the European economic system - an Italian default would live up to the title of this thread.

Wordsmith
A Greek default happening in a structured way further down the line when the appropriate support mechanisms are in place will not be a substantial problem for anyone.
I really did not think it was that difficult to comprehend ....
 
#17
the euro was always going ot cause financial crisis across the world.

when it was made and the world lost 12 currencies ot play swap market with, all the finacnce ministers decided ot basically fix the exchange rates to stop a run against any single currency, that simple mistake has caused a hell of a lot of problems, time was when a rich punter could "play the currency game" and turn 100k into 200k over a few days of swapping from one to another, that sort of manouvering would allow them to cover up any dodgy deals they made during hte week and put back the cash they had "lost"

breaking the Euro will in the short term cause mass financial problems however getting rid of the EC and the EU parliment will save all the member states billions in dues, most of the members are so far up the khyber due to startup costs that they still havent recovered.

once you pull apart that lattice framework so carfully piled together to make bent politico's into nouveau mega rich, there supposed anti corruption reforms wernt enough, the whole system needs scrapping all the illegally obtained monies need returning (individuals) and they should sell of the buildings to some theme park company instead of wasting billions each year to run them.


economists predicted that adding greece to the eurozone would cost the existing member states a few billion however it would cause at least one of them to get close to bankruptcy, the banking collapse still hasnt been figured out fully many countries are still trying ot work out what went wrong and how much they will need to tighten there belts when the final bill is tallied up, oddley enough those same econmists said not adding greece would probably end up costing more (must be some clever financial reason that the public arnt allowed to know) anyhow thye also predicted the fall of the verious countries wiht weak standing in the €uro, italy, ireland, portugal, possibly spain (although if they all fell that would create a cascade and all of them would domino)

now call me crazy but those same "clever people" estimate that if the €uro was broken up and the EU/EC etc was disolved whilst maintiaingin the EMA (without war) then it would cost considerably less to each of the member countries, so i have to wonder why the **** people still think the EURO bollocks is a good thing.
 
#18
Don't understand the Italian economy. Fairfew Italian cars on the streets, engineering products around, helicopters in the sky and food products on the shelfs. Compared to us their industry seems posatively booming?
Italy is being crippled by being in the Euro.

They are indeed a manufacturing economy, but they had a very large low skill labour base and low wage costs. Now their trying to compete while paying German levels of wages.
 

Travelgall

MIA
Kit Reviewer
#19
Don't understand the Italian economy. Fairfew Italian cars on the streets, engineering products around, helicopters in the sky and food products on the shelfs. Compared to us their industry seems posatively booming?
We had tons of industry making all of the above. Problem was it all lost money, and we had the excuse that it was all Nationalised and couldn't help but loose money, The Italians don't have that excuse. That's the key...

BBC News - Fiat and Chrysler report big losses
 

Travelgall

MIA
Kit Reviewer
#20
I read somewhere that if Milan folk declared their real earnings to the taxman they'd be by far the richest city in europe.
They are rich precisely for that reason. They have a better life by not handing over fists of cash to the government to be pissed away on Diversity and Outreach co-ordinators and all the other tentacles of State. They manage to get by just fine without an Erection to Resurrection welfare state.

Starve the beast.