Comments on: Betting on the unthinkable in the euro zone http://blogs.reuters.com/great-debate/2009/01/16/betting-on-the-unthinkable-in-the-euro-zone/ Thu, 21 Jul 2016 07:57:19 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: Dorking Boy http://blogs.reuters.com/great-debate/2009/01/16/betting-on-the-unthinkable-in-the-euro-zone/#comment-5699 Wed, 21 Jan 2009 11:21:25 +0000 http://blogs.reuters.com/great-debate/?p=1307#comment-5699 The US will obviously wish to protect the dollar. The main query over the Euro is NOT as one commenter put it -the UK – it is in fact the Irish Republic and Greece who are discussing withdrawal.

The Germans will wish to protect their car industry – especially as the build quality is dipping for VW, Audi and M-B – the UK is in trouble becuase “Financial Services” the main export suffers from demand and integrity issues. This is a long way from being solved.

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By: Quintin http://blogs.reuters.com/great-debate/2009/01/16/betting-on-the-unthinkable-in-the-euro-zone/#comment-5540 Mon, 19 Jan 2009 18:47:43 +0000 http://blogs.reuters.com/great-debate/?p=1307#comment-5540 Considering Standard & Poor’s contribution to our current plight, I’ve cut their “rating ability” rating to “haven’t got a clue”.

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By: Al Baloushi http://blogs.reuters.com/great-debate/2009/01/16/betting-on-the-unthinkable-in-the-euro-zone/#comment-5515 Mon, 19 Jan 2009 07:57:02 +0000 http://blogs.reuters.com/great-debate/?p=1307#comment-5515 When thing go too artificial or over valued, this kind of situation is emerge. The lust of more money in every country and people brought us to the today’s economical disaster. Different nations and different finanacials institutes giving many different reasons for this happening, but it is sure, it happended because of lust of money.

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By: Jerone http://blogs.reuters.com/great-debate/2009/01/16/betting-on-the-unthinkable-in-the-euro-zone/#comment-5440 Sun, 18 Jan 2009 06:49:24 +0000 http://blogs.reuters.com/great-debate/?p=1307#comment-5440 This comment is born out of fear!!

The US worst nightmare is when foreign lenders come to the conclusion that financing the US FIRE-economy ponzi scheme will lead to they’re money beeing wiped out and start moving money away from the US.
The fact of the matter is that the FIRE economy is dead!
The stanch is overwealming. Only because the FED is kicking the corps, it appears to be still alive.
The US is very well aware of this and in order to find greater fools to further finance the US ability to roll over it’s debt it is essential that foreigners are scared away from investing anywhere else except the US.

For instance the Eurozone, which is targeted in this comment.

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By: richard http://blogs.reuters.com/great-debate/2009/01/16/betting-on-the-unthinkable-in-the-euro-zone/#comment-5436 Sun, 18 Jan 2009 02:46:16 +0000 http://blogs.reuters.com/great-debate/?p=1307#comment-5436 “they didn’t gorge.” Like heck. They gorged on humongous government which allocates resources just as poorly if not worse than genius american consumers.

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By: matt http://blogs.reuters.com/great-debate/2009/01/16/betting-on-the-unthinkable-in-the-euro-zone/#comment-5433 Sun, 18 Jan 2009 01:37:36 +0000 http://blogs.reuters.com/great-debate/?p=1307#comment-5433 the introduction of the Euro caused inflation to skyrocket, now one expect the same when gettting out of the Eurozone?? Talking about getting screwed in both holes.

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By: derek http://blogs.reuters.com/great-debate/2009/01/16/betting-on-the-unthinkable-in-the-euro-zone/#comment-5431 Sun, 18 Jan 2009 01:30:02 +0000 http://blogs.reuters.com/great-debate/?p=1307#comment-5431 Wouldnt matter. If the Euro went and Countries went back to their old currencies. Wouldnt matter. So long as you have Countries. Think about it. Same if you had One World Currency. So long as you have Countries you get PROBLEMS.

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By: Daniel http://blogs.reuters.com/great-debate/2009/01/16/betting-on-the-unthinkable-in-the-euro-zone/#comment-5423 Sat, 17 Jan 2009 22:07:20 +0000 http://blogs.reuters.com/great-debate/?p=1307#comment-5423 The irony in all this is of course.. that the only people really having this discussion about a break-up of the eurozone are eurosceptic brits looking for a justification to keep the Pound and secretly hoping for the Euro they always reviled so much to fail.

For any of the economically weak countries in the Euro, leaving would bear such a huge economic cost that it would make any of the advantages of having their own currency pale in significance. The leap from ‘there are higher credit spreads on Greek government bonds than on German ones’ to ‘people are betting that the eurozone is going to break up’ is frankly silly. There are also different credit spreads on different regional governments and government agencies in the US – does that mean people are thinking the USD zone is going to break apart? It is simply a reflection of those entities’ different financial situations .. unlike the US and UK governments, individual eurozone countries don’t have the option to monetize their debt to keep them from default, because they have no direct control over the ECB, so there are real differences in default risk among EU countries – although others members would likely step in to help, if anyone got close to that.

And as for the economically strong countries that could actually leave without causing themselves huge issues, there is zero political will for leaving – they are wielding the power after all. The only thing that could make them consider leaving would be, if the Euro devalued strongly due to the economically weaker countries and gave them the accompanying inflation and other soft currency issues, but that’s not very likely to happen with the ECB being quite hawkish and everyone seemingly steering towards a deflationary recession.

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By: Ken http://blogs.reuters.com/great-debate/2009/01/16/betting-on-the-unthinkable-in-the-euro-zone/#comment-5422 Sat, 17 Jan 2009 21:43:40 +0000 http://blogs.reuters.com/great-debate/?p=1307#comment-5422 We wish Europe the best. We hope to rebuild our (U.S.) manufacturing so we have something to trade. We will probably resort to tariffs until our products improve. Demand is weak because we have 2 or 3 of everything we need and our income is now at risk. So we will hunker down, yardsale, fixup, and grow gardens to get by. We need to stop the party and get back to work.

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By: Simon Smelt http://blogs.reuters.com/great-debate/2009/01/16/betting-on-the-unthinkable-in-the-euro-zone/#comment-5420 Sat, 17 Jan 2009 19:38:15 +0000 http://blogs.reuters.com/great-debate/?p=1307#comment-5420 Nice analysis, thank you.
The unavoidable trade-offs in monetary union are not usually an issue because there is political union also. Centralised monetary authority parallels centralised political authority. This ain’t so in the Eurozone since the nation states retain much economic authority and the EU structure includes those who are not members of the Euro – notably the UK.

Your article highlights that both the costs and benefits of Euro membership are rising and are spread differentially across member countries. Sounds like a recipe for increased tensions. But the potential rewards of succeeding the debt laden U.S. dollar as the world’s currency and the uncertainties of exit costs from the Euro may be sufficient to keep everybody on-board.

Hard to see rich members of the Euro helping poor members in the way that, for example, B.C. helps out Newfoundland. They alreayd subsidise poor members through the EU and probably don’t fancy paying twice.

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