Greece bailout will collapse Euro?

by **WBU ALUM** » February 13, 2010, 9:36 am

Collapse of the euro is 'inevitable': Bailing out the Greek economy futile, says FRENCH banking chief

Strategists at Paris-based Société Générale said that any bailout of the stricken Greek economy would only provide 'sticking plasters' to cover the deep- seated flaws in the eurozone bloc.

The stark warning came as the euro slipped further on the currency markets and dire growth figures raised the prospect of a 'double-dip' recession in the embattled zone.

I'd be interested to hear the observations of those on the European continent.

by **BobHelm** » February 13, 2010, 10:08 am

Very mixed economic figures coming out of Europe at the minute.
Germany (the economic pride of Europe) - recent figures suggest a slow down/stop of recovery - although the optimists rightly say much of the 'restart' money has not kicked in yet.
France - (the economic puzzle of Europe) - recent figures show a better than expected move out of recession into growth.-
Spain - one of the few places in the world still actually in recession.

No one should forget that while all the world is still in an economic mess Greece are actually responsible for much of the individual mess they are in. The have been deliberately distorting Government economic facts & figures for a while now, in order NOT to take austerity measures that they now have to take. Common sense says they should be thrown out of the euro zone & the country made to take the serious economic repercussions. That will not happen, the rest of the club will save them.
Economically the Euro zone certainly did not need this. They have enough issues assisting the new members from the East without this. Their only saving grace is that the USD economic revival is also way off & the national debt crippling for years to come, with efforts in place only to increase it!!

by **Texpat** » February 13, 2010, 6:10 pm

Their only saving grace is that the USD...

It's really sort of an unhealthy obsession.

No, really.

by **BobHelm** » February 13, 2010, 6:39 pm

If the Euro falls depends as much as what is happening to the currencies of countries it is compared with as how the euro Zone itself is doing. As everyone in the World ignores the Chinese currency (because its rate is artificially set by the Government to favour their own ends) that really only leaves the USD & Yen.
Japan has been economically in the doldrums from years & years now, the economic standing of the USA is bound to have an impact on the USD.
As all 3 currencies seem doomed to be hampered by poor economic outlook it is doubtful any will significantly rise in value over the other in the short term.
I rather fail to see what would appear to be an "unhealthy obsession" with any of that Tex.

by **Texpat** » February 13, 2010, 11:01 pm

Bob, I understand perfectly the concept of relativity.
But the constant comparison, the never ending measuring-up, the continual relative standing in all aspects, gets rather tiresome.
I find it fascinating that every measure of the EU, almost without fail, is a comparison with the US equivalent.
It's one-part flattering and 10-parts sad simultaneously.

Check out a similar story from the US and see how many comparisons are made. I'd say maybe 1/10th. Maybe less. The constant comparisons to China, Eu, Russia, aren't vital to US understanding what's going on. Yes, we simple Americans understand about linked economies and interdependence, blah blah blah... before you get started, save it.

Sorry, maybe for you it seems normal. To me it seems odd. You appear a desperate back up dancer looking at his feet.

by **BobHelm** » February 13, 2010, 11:14 pm

I am at a loss to know what to say Tex.
Are you really saying that it is "odd" to compare like things before making a decision??
The only other way is to have made your mind up already & then make every fact fit your original decision - now that does appear to me to be a strange way to decide anything, but obviously not to you...

by **Texpat** » February 14, 2010, 12:26 am

Greece bailout will collapse Euro?
Simple enough question. Yes, the stability of the Euro is based on many factors, ONE of which is the USD. Many more important factors are international trade, and sales figures, and P/E ratios of Euro based industries, and many other factors.

I read the OP as an internal (EU) question of how Greece's default sucks down the euro -- as an internal factor. Knowing Greece has borrowed heavily and other Eu countries may have to subsidize it's borrowing (much the same as new EU members, it's not nearly so much a question of relative world standing as what will happen to the euro. And that's the question.

by **BobHelm** » February 14, 2010, 7:47 am

& I guess you only read into any answers that you don't like what you want Tex.
I clearly say that the current Euro zone economic trends seem to vary from country to country.
The major euro economies have said they will support Greece, but have not said how & if money is involved.
If something is going to 'sink' then it must be in relationship to something else.
All the data you mention is known by everybody, but the euro has not sunk like a stone. So it must be because of factors elsewhere - the poor expectations of other major currencies.

by **rick** » February 14, 2010, 8:29 pm

The Greek problem will hurt the euro, but not by much. Greeks make up only about 2% of the EU population, and their entire GDP is less than the money spent on bailouts in europe. It is like USA taking on Haiti reconstruction all by itself - an annoying drain on resources, but hardly an expense likely to change economic direction to the larger entity.

by **tigerryan** » February 14, 2010, 10:02 pm

I have always struggled with the concept of the Euro. I mean why would you force an association with the economic deadbeats of the region, for the ease of monetary conversion for your trip to the beach? if all desires and ethic were equal I suppose the concept could work but.... they aint.

Im wondering if Asia attempted a Euro type currency what country from the onset would be the clear outstanding economic deadbeat of the association? I cant think of what country that would be.

by **WBU ALUM** » February 14, 2010, 11:17 pm

tigerryan wrote:I have always struggled with the concept of the Euro. I mean why would you force an association with the economic deadbeats of the region, for the ease of monetary conversion for your trip to the beach? if all desires and ethic were equal I suppose the concept could work but.... they aint.

Im wondering if Asia attempted a Euro type currency what country from the onset would be the clear outstanding economic deadbeat of the association? I cant think of what country that would be.

It's difficult for anyone to understand who is used to free enterprise and individual liberty. Progressive socialism is about the group, not the individual. The EU was created for the union with very little protection for the individual countries.

Since the back-to-back wars of WWI and WWII, the Europeans have been taught that national pride is bad. Asian countries still embrace their cultures and nationalist traditions. For that reason, I don't see the Asian countries in good shape agreeing to such a union.

by **Laan Yaa Mo** » February 15, 2010, 1:19 am

tigerryan wrote:I have always struggled with the concept of the Euro. I mean why would you force an association with the economic deadbeats of the region, for the ease of monetary conversion for your trip to the beach? if all desires and ethic were equal I suppose the concept could work but.... they aint.

Im wondering if Asia attempted a Euro type currency what country from the onset would be the clear outstanding economic deadbeat of the association? I cant think of what country that would be.

Tigeryyan, you have a number of choices in an Asian equivalent of the Euro. Try the following: Bangladesh, North Korea, Burma, Mongolia and perhaps the Philippines, Cambodia, Nepal and Bhutan.

by **tigerryan** » February 15, 2010, 2:08 am

Tilokarat, Excluding the rubber room countries N. Korea, Burma (would they even play if invited). I guess my gut tells me that the lack of entrenched social welfare programs on auto-pilot and the jaw dropping demographic potential of the Asia is really compelling. I simply would not bet against Nepal, Bhutan or Bangladesh for mid term economic potential given there existing low debt loads.

Nothing against Europeans (please reread) it just an observation. It seem like the continent is dying with low birth rates. The refugee blood cells swarming to the disease are largely batting for the other team.

by **Laan Yaa Mo** » February 15, 2010, 5:42 am

Burma is in ASEAN, so it is possible they would join. At the moment it is hard to see how all of the countries from Pakistan, or India, to North Korea would join an all-Asian currency.

by **BobHelm** » February 15, 2010, 10:58 am

I think that you are reasonably near the mark WBU about the creation of the an European Market Zone. The history of the area has a huge bearing on why the nations came together. The desire to settle things a different way than war is totally understandable after the death & destruction of the two World Wars. The 'Common Market" of just the major economic European nations (except UK) was an attempt to totally remove trading barriers between the member nations - a VERY free enterprise approach at a time when tariffs were the order of the day for ALL nations.
I am surprised how the approach of no trading barriers & a common currency to ensure that can be seen to be happening transparently is seen as 'socialist'. Rather it is at the very basis of free enterprise.
I really continue to be amazed at how other parts of the World seem to be viewed by some from America, and every non-American country lumped into a feared group labeled 'Socialists'.
ASEAN is at the same stage as the early 'Common Market' in Europe, who knows in what direction events will conspire to move it...

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