Comments on: Confidence tricks for the euro zone http://blogs.reuters.com/hugo-dixon/2012/07/23/confidence-tricks-for-the-euro-zone/ Mon, 18 Apr 2016 14:55:08 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: whyknot http://blogs.reuters.com/hugo-dixon/2012/07/23/confidence-tricks-for-the-euro-zone/comment-page-1/#comment-428 Fri, 27 Jul 2012 13:39:54 +0000 http://blogs.reuters.com/hugo-dixon/?p=389#comment-428 Too much coffee again, Hugo

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By: Samrch http://blogs.reuters.com/hugo-dixon/2012/07/23/confidence-tricks-for-the-euro-zone/comment-page-1/#comment-427 Thu, 26 Jul 2012 09:13:22 +0000 http://blogs.reuters.com/hugo-dixon/?p=389#comment-427 The core problem is the stronger nations import the goods they got from the weaker from other cheaper labor sources.

There is no way out but to let the weak nations go bankrupt (default on debt or pay it off in script for their local goods). You cannot bleed a dry stone. There is no bankruptcy court or law for local governments in the EU. Making acceptable EU wide commercial laws and courts require election of EU high officials and lots of time. It can be expected in any group of a dozen or so nations of different economies (some small), some will be losers in 20 years and some winners.

EU or no EU the weak nations have to export (small undiversified nations have a great portion of their GDP in trade). They need tax non-exporting investments high and give easy loans and low taxes to those that increase exports). The strong nations will call that export subsidies and is. But how else can the the weak nations hope to get enough exports to support their imports in the medium term.

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By: changeling http://blogs.reuters.com/hugo-dixon/2012/07/23/confidence-tricks-for-the-euro-zone/comment-page-1/#comment-426 Wed, 25 Jul 2012 00:03:18 +0000 http://blogs.reuters.com/hugo-dixon/?p=389#comment-426 Calming the bond markets is easy. Euro-dependent nations have to jointly announce that eurobonds will be a reality. They would not even have to a set a firm introduction date. Just committing to working towards eurobonds alone will give the markets cause for more caution before driving up any one nation’s interest rates.

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By: HECConsulting http://blogs.reuters.com/hugo-dixon/2012/07/23/confidence-tricks-for-the-euro-zone/comment-page-1/#comment-425 Mon, 23 Jul 2012 12:53:38 +0000 http://blogs.reuters.com/hugo-dixon/?p=389#comment-425 In dramatical comments and opinions about the European debt crisis are drawn in grey and black colors. Spain and Italy, as they had in the past their own currency had always, because of their weak currency, yield of 7 to 12 %, That was normal. So why everybody is afraid? The Euro gave them the first time low yields and in case of Spain, they used it for construction industry in infrastructural projects and the Spanish and the European banks financed this. The lobbing of the big construction entities in Spain worked well and they start to imitate the American role model of Subprime Financial products. The Spanish regions are claiming there independence from the central government in Madrid. Valencia is an example and launched useless projects, that doesn’t let the money work. It is just beautiful, but with no need to be beautiful. Now the party is over and Spain is struggling with the waisted capital. Almost all of that money went into infrastructural projects, airports, harbors, bullet train tracks, Highways and so on. As it was build, the economy didn’t prosper from it as it must to pay the bills. Over 80 % of the wealth of Spain is concentrated in the hands of about 60 families. They can live with 8 % yield.
Italy is different. The basic values of Italy is present. In the North the industry structure and the performance is comparable with Germany 10 years ago. The basic health of Italy is still there. But Berlusconi did hamstring the country of a decade. He sack the country in his own favor. Monti did quite a lot in short time to come back on track and nobody can really doubt about Italian performance chances in the future. But Italy is codefendant of Spain and Greece.
The unemployment rate in Spain is a result of there old and cemented system between strong and socialistic unions and a lag of education how the world economy has changed and what is needed today to reduce unemployment. One thing is for sure, with the old system it will not work. Without a break of traditional work contracts the unemployment will not see any change. The youth unemployment is a direct result of the cemented employment regulations. This all has to change.
Even USA experience now the changed employment situation. The people coming back in work have learned that there job are parlous and they have learned to safe and not spend money.

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