Eurozone on Life Support

[L00b]

We have the freedom to print money, that's what allows us to kick the can down the road.

 

In fact it's not even printed these days, just created electronically out of thin air.

 

This is so far away from the idea of money as a store of wealth (as it was under the Gold Standard) as to be laughable.

I know all that VB. For all the ills of 'neverland money'...the salient point was, at least we get to kick our own can how we see fit, not how Frau Merkel does

[geared]

There's always the slight upside of printing money in that our exports become more competitive, but as we're not an export driven nation it's not a massive upside.

[Rupert_Baehr]

There's always the slight upside of printing money in that our exports become more competitive, but as we're not an export driven nation it's not a massive upside.

 

It's just as well, perhaps, that the UK doesn't import anything important - such as food, gas and oil. The government can print as much money as it likes, but the ordinary consumer will end up paying far more for basics and will then probably try to blame the price rises on the people who are selling the imports - people who are no longer prepared to accept the same amount of freshly-printed money.

 

Eventually, you may need a wheelbarrow to take the money to the baker's shop to buy a loaf of bread. The imported wheat will cost more, the imported oil used to deliver the flour will cost more and the imported gas used to bake the bread will cost more. Far more.

 

In the past, the wheelbarrow would've had 'made in England' stamped on it. Nowadays, it'll probably be marked 'Made in China'.

[geared]

Everything is stamped 'made in China' these days

 

More and more it's a sign of a quality product, because they have the facilities and the skilled workforce to produce the stuff at the right price

[andygardener]

Under the circumstances I can't see a reason for anyone with savings in a Portuguese/Spanish/Italian bank in Euros not to take it out and put it in a German/Dutch bank. Why take the risk if it's apparently fine for the EU to demand dodgy governments steal huge chunks of your cash?

[LeMaquis]

Why take the risk if it's apparently fine for the EU to demand dodgy governments steal huge chunks of your cash?

 

The conditions were dictated by the ECB, Eurozone leaders and IMF leaders. It sets a good precedent, that banks bail themselves out instead of having the taxpayer bail them out. That way moral hazard can be minimised. We should have done the same under Labour. Cyprus was just a tax haven for the rich. Make the buggers pay tax along with the rest of us. They'll get no sympathy from me.

[Rupert_Baehr]

Cyprus may well have been 'a tax haven for the rich' (or a place in which certain non-EU nationals could hide large amounts of money) but for a lot of people - including comparatively small savers - it was simply 'home' and under the original rules, their savings accounts were going to be debited to raise the funds.

 

Given that those who are going to be made to pay are going to be given shares in the banks they are going to bail out, do you think that Labour should've issued shares in the banks they bailed out to every UK resident/UK bank account holder?

[andygardener]

The conditions were dictated by the ECB, Eurozone leaders and IMF leaders. It sets a good precedent, that banks bail themselves out instead of having the taxpayer bail them out. That way moral hazard can be minimised. We should have done the same under Labour. Cyprus was just a tax haven for the rich. Make the buggers pay tax along with the rest of us. They'll get no sympathy from me.

 

Cyprus clearly has specific issues with Russian gangsters salting away huge sums of money there and I've got no problem with them getting stung. (though rather the Cypriots than me, they're not people who are above killing the great and the good if they think they've ripped them off).

 

However not everyone with more than £80Kish in the bank is by any means rich and lots of normal people have been stung by this, which is looking like up to a 40% cut in their life savings overnight. The point I was making is if this is the way it's going to be from now on (and the Dutch FM says it is) why would anyone Euros in a PIGS bank when they can move the same Euros to a Dutch or German bank?