Sorry Greece - IMF in the dwang over Euro

FORMER_FYRDMAN

LE
Book Reviewer
Veterans of the Financial Apocalypse thread of years ago might be interested to read that an IMF enquiry has come to much the same conclusions about the Euro and the whole Greek fiasco as we predicted five years ago.

IMF admits disastrous love affair with the euro and apologises for the immolation of Greece

One of the conclusions that caught my eye was:

"They had no fall-back plans on how to tackle a systemic crisis in the eurozone – or how to deal with the politics of a multinational currency union – because they had ruled out any possibility that it could happen."

Which pretty much characterises the arguments of a high-placed and particularly vehement Euro-advocate, who shall be nameless, but who ended up having a hissy fit and locking the thread.

Financial Apocalypse - coming soon | Army Rumour Service

To stalwarts like @Wordsmith and @hellsbrink who fought the good fight, I humbly dedicate this post and deplore the massive consultancy fees we appear to have missed out on for stating the bleedin' obvious.

It will be interesting to see what impact this has on the Euro if the concept of a multi-national currency union being unworkable becomes accepted wisdom and the rest of the world no longer wants to subsidize European living standards.
 
And in the spirit of kicking someone whilst they are down,
"The head of the International Monetary Fund (IMF), Christine Lagarde, must stand trial in France over a payment of €403 million (now £340m, then £290m) to tycoon Bernard Tapie, a France's highest appeals court has ruled.
The court rejected Ms Lagarde's appeal against a judge's order in December for her to stand trial over allegations of negligence in her handling of the affair.
Mr Tapie, a former French football team owner and some time pop star, won €403 million in 2008 in a case against the French public bank Crédit Lyonnais, after he said the bank undervalued his stake in Adidas. Christine Lagarde signed off on the payout as France's minister of Finance at the time."

If found guilty,she could do 12 months in prison.
 
I may be wrong, but I'm sure that Tapie was the owner of Marseilles when they were stripped of the European Cup for 'financial irregularities' (otherwise known as bribes).
 

Wordsmith

LE
Book Reviewer
Saw the article a day or two back, which I found interesting - including the fact that the IMF bent its rules out of shape to give a subsidy to the eurozone that it should not have done according to its own rules. And for which some of the important documentation has been conveniently lost.

What the article does not cover is the implication going forward - if the system was broke in the past, it is still broke doing forward. Greece remains an economic basket case, Italy is still piling up debt faster than it can pay it off and Portugal is not in a good state but has kept under the radar. The Spanish economy is not so good either, while Hollande is busy flushing the French economy down the toilet.

The amount of debt in the world economy is now substantially greater than in 2007, with countries like Japan, etc, still piling on QE. Even Hammond is talking about additional stimulus for the UK - while skirting around the fact that our debt pile is not far off becoming unsustainable and our interest payments are now the fourth largest item of government expenditure.

If the eurozone goes pop when the next recession rolls along - which it will - then it will be purely an EU problem. And the only way for the EU to bail out southern Europe will be to turn on the money printing presses at the ECB. Which will royally hack off the Germans, Finns, etc. I suspect the political and financial strains of bailing out a failed eurozone in the teeth of the recession will lead to the breakup of the EU into several fragments. A mess we will be able to watch from over the channel, but which the UK will take considerable collateral damage from.

Wordsmith
 
Veterans of the Financial Apocalypse thread of years ago might be interested to read that an IMF enquiry has come to much the same conclusions about the Euro and the whole Greek fiasco as we predicted five years ago.

IMF admits disastrous love affair with the euro and apologises for the immolation of Greece

One of the conclusions that caught my eye was:

"They had no fall-back plans on how to tackle a systemic crisis in the eurozone – or how to deal with the politics of a multinational currency union – because they had ruled out any possibility that it could happen."

Which pretty much characterises the arguments of a high-placed and particularly vehement Euro-advocate, who shall be nameless, but who ended up having a hissy fit and locking the thread.

Financial Apocalypse - coming soon | Army Rumour Service

To stalwarts like @Wordsmith and @hellsbrink who fought the good fight, I humbly dedicate this post and deplore the massive consultancy fees we appear to have missed out on for stating the bleedin' obvious.

It will be interesting to see what impact this has on the Euro if the concept of a multi-national currency union being unworkable becomes accepted wisdom and the rest of the world no longer wants to subsidize European living standards.
Who was that then..is he still in the Bunker..??..;)
 
So, you didn't like the comments about this in the Brexit threads nor did you like this one
IMF fail | Army Rumour Service
So it was a good idea to start another one.
Jarrod is probably counting up to 5.
 

FORMER_FYRDMAN

LE
Book Reviewer
So, you didn't like the comments about this in the Brexit threads nor did you like this one
IMF fail | Army Rumour Service
So it was a good idea to start another one.
Jarrod is probably counting up to 5.
Plough your way through the Financial Apocalypse thread and you'll realise why this takes a different tack fro the threads you referenced.

Of course, we could celebrate a victory over tyranny and unlock the original, which contains all the detailed economic arguments, if restoring the time/space continuum would give you peace of mind.
 
Veterans of the Financial Apocalypse thread of years ago might be interested to read that an IMF enquiry has come to much the same conclusions about the Euro and the whole Greek fiasco as we predicted five years ago.

IMF admits disastrous love affair with the euro and apologises for the immolation of Greece

One of the conclusions that caught my eye was:

"They had no fall-back plans on how to tackle a systemic crisis in the eurozone – or how to deal with the politics of a multinational currency union – because they had ruled out any possibility that it could happen."

Which pretty much characterises the arguments of a high-placed and particularly vehement Euro-advocate, who shall be nameless, but who ended up having a hissy fit and locking the thread.

Financial Apocalypse - coming soon | Army Rumour Service

To stalwarts like @Wordsmith and @hellsbrink who fought the good fight, I humbly dedicate this post and deplore the massive consultancy fees we appear to have missed out on for stating the bleedin' obvious.

It will be interesting to see what impact this has on the Euro if the concept of a multi-national currency union being unworkable becomes accepted wisdom and the rest of the world no longer wants to subsidize European living standards.
Haven't heard from him for yonks.

Wonder what he makes of that article.
 

FORMER_FYRDMAN

LE
Book Reviewer
Haven't heard from him for yonks.

Wonder what he makes of that article.
A noose most likely.

It was actually a thing of wonder throughout the quite extensive apocalypse thread that someone who was clearly an operator in the field and well-connected could so consistently argue that the laws of international currency and inter-country competitiveness somehow did not apply to the Euro and that the imposition of such harsh austerity measures would have little or no social consequence.
 

Wordsmith

LE
Book Reviewer
This about covers it.

Eurozone GDP growth halves as French economy stalls - BBC News
Eurozone economic growth halved in the second quarter, but the 19-nation single currency area moved away from deflation. GDP rose by 0.3% between April and June, in line with expectations but below 0.6% growth in the first quarter. France, the eurozone's second-largest economy, saw no growth after expanding by 0.7% in the first quarter.

Eurozone inflation rose to 0.2% in July from 0.1% in June as a result of higher food, alcohol and tobacco prices. Data also revealed that the eurozone jobless rate remained at 10.1% in June.
By way of contrast, the UK has been growing at 2.5% annually, two to three times the rate of growth in the eurozone. At 5% our unemployment rate is half that of the eurozone. And at 0.5% inflation, we are not flirting with deflation like the eurozone.

For all this whinging about the UK's economy is going to suffer after Brexit, the eurozone is in far worse economic shape.

Wordsmith
 
C

count_duckula

Guest
And in the spirit of kicking someone whilst they are down,
"The head of the International Monetary Fund (IMF), Christine Lagarde, must stand trial in France over a payment of €403 million (now £340m, then £290m) to tycoon Bernard Tapie, a France's highest appeals court has ruled.
The court rejected Ms Lagarde's appeal against a judge's order in December for her to stand trial over allegations of negligence in her handling of the affair.
Mr Tapie, a former French football team owner and some time pop star, won €403 million in 2008 in a case against the French public bank Crédit Lyonnais, after he said the bank undervalued his stake in Adidas. Christine Lagarde signed off on the payout as France's minister of Finance at the time."

If found guilty,she could do 12 months in prison.
Corruption in French high society makes our lot look like amateurs.
 
I wonder what what our thread locker will do with his own "that rifle" if he gets posted back to blighty post Brexit. Should some posters be concerned?
 

Goatman

ADC
Book Reviewer
This about covers it.

Eurozone GDP growth halves as French economy stalls - BBC News


By way of contrast, the UK has been growing at 2.5% annually, two to three times the rate of growth in the eurozone. At 5% our unemployment rate is half that of the eurozone. And at 0.5% inflation, we are not flirting with deflation like the eurozone.

For all this whinging about the UK's economy is going to suffer after Brexit, the eurozone is in far worse economic shape.

Wordsmith
Similar piece in yesterday's Times.....France is Yurp's problem child.
 

seaweed

LE
Book Reviewer
RIP
It's all because the EU was originally founded on the base Socialist fallacy that politics can control economics. Now the EU is beginning to run out of political darning wool for the logic holes in its structure.
 

philc

LE
Much has been made of the Stress testing of banks in the Guardian over the last few days with Italian banks coming up for particular criticism.

Vicenza: dark heart of Italy's banking crisis where locals have lost millions

Vicenza: dark heart of Italy's banking crisis where locals have lost millions
Collapse of BPV has left citizens with nothing and the ramifications could damage the whole of Italy and the eurozone


A sad tale of a bank selling shares to prop up a failing bank, locals have lost 1000,s of euros at a time they are struggling any way. My local Italian bank had guaranteed millions of euro loans to Chinese companies involved with the iron and steel industry, I wonder how its fairing.

Its amazing and has been repeated often here that these so called experts etc seem to be nothing more than snake skin oil sales men, caught up in some sort of religious fever when it comes to the Euro.
 

Wordsmith

LE
Book Reviewer
On the other hand there are increasing signs of realism from May's government.

Britain to ‘leverage’ £11bn of foreign aid to build new trade deals after Brexit
Britain will "leverage" its £11 billion foreign aid budget to build a series of new trade deals as it leaves the European Union, the Telegraph has learned. Priti Patel, the new International Development Secretary, and her ministers will use meetings with foreign leaders from countries that receive foreign aid to "open the door" to new deals.

While rules bar Britain from explicitly tying trade deals to foreign aid, Mrs Patel plans to use the department's budget in Britain's "national interest" to help with the Brexit process.
Patel was never a fan of CMD's law to spend 0.7% of GDP of foreign aid - which always struck me as a Bono type ego trip. Now it looks like there will be a much more pragmatic approach to foreign aid, with it going to countries that are willing to buy from Britain. And I would not be surprised to see the 0.7% target ripped up altogether in a year or two's time.

Another thing that'll have the EU frothing at the mouth. We give a good chunk of our foreign aid budget to the EU to redistribute. and the EU redistributes it in a way that promotes the EU, not the UK. Now the EU will see the UK directly boosting its trade and not that of Brussels.

Wordsmith
 

Wordsmith

LE
Book Reviewer
Its amazing and has been repeated often here that these so called experts etc seem to be nothing more than snake skin oil sales men, caught up in some sort of religious fever when it comes to the Euro.
Here's why the snake oil is needed - from your link.

upload_2016-7-31_10-19-16.png


Non-performing loans are essentially loans that have gone bad. About a third of the loans in Greece fall into that category - and nearly a fifth in Italy - with both countries still on an upward trend. The problem is even worse than it appears.

A non-performing loan is a loan on the point of failure - where interest and capital payments are more than 90 days in arrears. however, before the loan becomes non-performing, the banks usually do everything to keep it as a performing loan - typically by reducing the interest rate to virtually nothing. So these loans have probably effectively been giving a virtual zero return for the banks since 2007. Worse, because the banks have money tied up in unproductive loans, they can't loan money to companies wanting to expand.

Looking at that graph, Greece's banks are basket cases - no bank can survive with 33% of its loans liable to be written off due to companies or individuals going bankrupt. And Italy - with its far larger banking sector - is an economic shock away from needing a huge bailout from the ECB.

By way of contrast, look at the level of US and UK bad debt. Those countries acted to get debt out of the system after the 2007 crash. Which means when the next recession comes along, they will be in a much better position to weather the economic storms. And giving their own central banks means they can turn on the money printing presses and use QE to cushion the damage.

Within the euro, there is only one central bank; the ECB. And if it has to turn on the money printing presses to wipe out bad debt, all countries in the EU become equally liable. Which means Germany and the more prudent northern nations have a humdinger of a bill coming after the next recession when the sins of the Italian, Greek and Spanish banks finally catch up with them. Not forgetting the Portuguese and Austrian banks, etc.

Seems to me the EU is in a far worse state that the UK. We've got into our lifeboat and are frantically rowing away from the Titanic.

Wordsmith
 
I may be wrong, but I'm sure that Tapie was the owner of Marseilles when they were stripped of the European Cup for 'financial irregularities' (otherwise known as bribes).
My mistake - it was Tapie that owned them but it wasn't the European Cup they were stripped of - they bribed French league opponents so that they could concentrate on preparing for the European Cup final. They were stripped of the French league title they won that year, booted into the French second tier and kicked out of the next season's European Cup and European Super Cup (played between the winners of the European Cup and UEFA Cup) and Intercontinental Cup (played between the winners of the European and South American club competitions).

Still, I'm sure his involvement in this case is totally above board...
 
On the other hand there are increasing signs of realism from May's government.

Britain to ‘leverage’ £11bn of foreign aid to build new trade deals after Brexit


Patel was never a fan of CMD's law to spend 0.7% of GDP of foreign aid - which always struck me as a Bono type ego trip. Now it looks like there will be a much more pragmatic approach to foreign aid, with it going to countries that are willing to buy from Britain. And I would not be surprised to see the 0.7% target ripped up altogether in a year or two's time.

Another thing that'll have the EU frothing at the mouth. We give a good chunk of our foreign aid budget to the EU to redistribute. and the EU redistributes it in a way that promotes the EU, not the UK. Now the EU will see the UK directly boosting its trade and not that of Brussels.

Wordsmith

It's an aid model the Americans use.

We need $2 million to buy trucks to deliver aid.

Ok, here's $2 million worth of US trucks, btw, it's conditional that you sign a deal with GM to sell your army new trucks.
 

FORMER_FYRDMAN

LE
Book Reviewer
(snip)

Its amazing and has been repeated often here that these so called experts etc seem to be nothing more than snake skin oil sales men, caught up in some sort of religious fever when it comes to the Euro.
That was the point about the Financial Apocalypse thread. Alsacien flat refused to accept that there was a problem and insisted that some mechanism would be developed to fix it.

It'll be interesting to see how much longer the Euro and the Eurozone lasts in its current form - I certainly agree with Wordsmith's view that we're best off watching from a distance. I wonder what all those who were insisting we should join circa 2002 have to say for themselves now?

I had a drink with a Spanish ex-pat on Friday and she was incandescent at what she felt the Euro had done to Spain - particularly with regard to youth unemployment and the flight of the young professional class abroad. I strongly suspect that we won't be the last ...exit.
 
Last edited:

New Posts

Latest Threads

Top