Ongoing European Debt Crisis

Sure, but let us be honest. Greece is not only in trouble due to the banks (though they played an important part), the whole system was rotten to the core. And again, why is it hypocracy to demand from others to live up to your own standards? You know, we made the reforms Greece undergoes now years ago and it was a painful transformation process.

edited 25th Nov '11 3:37:41 PM by Zarastro

And now the failure to help those countries in their moment of crisis will cause a cascading collapse that cannot help but infect Germany as well. In your rush for the moral high ground, you'll get swamped by the rising tide, and drive the world into recession again. Thanks ever so very much.

"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"

We are trying to help. But the situation won't change even if we suddenly start printing money, as many politicians demand. Greece, Italy and co are suffering from structural problems which won't disappear without effort.

edited 25th Nov '11 3:41:01 PM by Zarastro

So, if Germany decides to say "nope" to helping out, who will be left standing to buy their products...? Pointing fingers and stuff isn't going to help fix the problem, although it could at least identify it at best-case.

Happiness is zero-gee with a sinus cold.

The problem is the adoption of the Euro as a common currency without unifying the countries' economic policies or allowing the ECB to act as lender of last resort.

"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"

Making ECB "guarantee of last resort", creating Eurobonds and encouraging higher inflation will help a lot of southern europe survive the crisis.

And not all nations have structural problem with corruption and tax non payment. Spain did not have structural problem like Greece and Italy, they just unlucky to be hit by unfortunate economic situations.

Including a rather large housing bubble, if I remember correctly*

...

Keep Rolling On

Green, it was more of a general construction boom than just housing.

Dutch Lesbian

This is not about pointing fingers or morality plays. This is about our money.

If we just pour down more and more money into Greece and god knows who else's throats, then it's our money disappearing. If we just print more money, the inflation again will devaulate our money. And that for things we were not responsible for, in fact not even for things that are nobody's fault - but for things those countries, especially Greece, have to blame only themselves for! And now they demand other people's money? Preposterous!

Sure, Germany has profitted from the Euro, and yes, we need external markets to buy our products. But pumping money into those states so they can buy our products seems like worse than a zero sum game to me. You can't get an economical perpetual motion machine. Might as well spend that money at home to raise domestic demand to replace the export markets.

Bottom line is, I do not see why we should suffer for the things Greece and Italy did wrong!

Unbent, Unbowed, Unbroken. Unrelated ME1 Fanfic

This is definitely about morality - the moral is that you shouldn't be too fucking selfish to help out your fellow man in times of extreme trouble. Especially when Germany will be hit just as hard as everyone else if any EU countries go bankrupt, so it's a short term spend for long term benefit for everyone.

Penalising the Greek and Italian people for the sins of their upper classes will help nothing, and simply cause a lot more suffering. It's time for Germany to take its high horse out the back and shoot it, burn it, and scatter the ashes. There's simply no place for it.

edited 26th Nov '11 8:15:58 AM by CaissasDeathAngel

My name is Addy. Please call me that instead of my username.

It isn't fair that Germany should have to pay for other countries who are less responsible - it's not really fair for any country to - but it's kind of what happens when you put yourselves on the same currency and creat an organisation like the EU. It wasn't wrong to do that, but it had risks... and unfortunately for Germany - unfortunately for everyone - the risks haven't paid off.

As I see it, Germany is one of the only places that have been responsible. It isn't fair that they should have to pay for that by bailing out countries... but if the responsible countries don't do it, then who will?

edited 26th Nov '11 8:25:26 AM by ArlaGrey

Germany have been the worst offenders in terms of "being responsible" though. For years and years, they broke the rules on having deficits larger than 3% of GDP.

Dutch Lesbian

Well, if it had been caused by a natural desaster or something I'd agree. But it hasn't been. It's been salf-caused.

Yes, we hear that a lot. Not only has Germany to give money, but also not complain about it, too. What utter arrogance! Not giving away one's own money freely is now a "high horse?" Absolutely propesterous!

And anyway, just guess just who the money would go to? Yes, the elites! Yes, the Greek and Italian elites should get penalized while the people are not - but that is something that has be done by the Greeks and Italians. They need to make the necessary structural reforms so that the elites, not the people are hurt. That's not something any external power could do. And so far, I don't see any signs of that happening.

So it's not Germany penalizing the common Greek and Italian population. It's their own goddamn elites. Pin the blame where it's appropriate.

Not the EU, but the Eurozone. Well, way I see it, international treaties and organizations can be left.

Nobody.

Ah now, that's true. Yet you don't see us standing two steps away from state bankruptcy.

edited 26th Nov '11 8:36:10 AM by Octo

Unbent, Unbowed, Unbroken. Unrelated ME1 Fanfic

Get the Poles to pitch in then. Exchange it for immediate approval of whatever treaty they want with regards to the EU. Or allow the Russians to do to Western Europe what the Chinese have done to the US. If you don't want to pay, find another route. Letting the others rot is just as bad of a policy as paying for it yourself out of pocket.

Final Fantasy, Foreign Policy, and Bollywood. Helluva combo, that...

But paying whom exactly? It would be just another bank bailout. That's a prime motivator for trying to prevent state bankruptcies, all the state debt held by banks. But that means that is where the money would end up - at the debtor banks. Even thouh they knew the risks when they took up the debt. It would be just like the bailouts after 2008 all over again - the banks knew the risk, get bailed out by public money, and then continue their greedy was as if nothing had happened.

It would just the same. The money would go the banks and the upper class, rather than to the people anyway. So I say, declare a sovereign debt cut, let some banks overburdened by PIIGS debts go bust, and spend the money instead on direcly aiding the people to get through the crisis.

Unbent, Unbowed, Unbroken. Unrelated ME1 Fanfic

Do you even realise how serious the consequences of banks going bust are? Ordinary people have invested or deposited their money in those banks, and they're the ones who will lose it. The only way to help out the innocent ordinary people is to stop the banks going bankrupt.

My name is Addy. Please call me that instead of my username.

There's a beautiful word for the - (and this is obviously my opinion, as I'm not posting in the name of some untold masses -) correct answer to the question: "how do we bail out the banks without rewarding the criminals?"

Nationalisation. Yes, nationalisation. Let our governments and the ECB buy those goddamn banks. If it's too "uncapitalistic", then let's sell them later, but only when our states can get a profit from it.

With a huge international currency, we're gonna need centralised monetary - and in general financial - policy. Until 2008, the case was that everything was directed to always favour the largest countries. We should get our economies more connected and more in sync to reach stability. And that means a "bigger" EU. I'm fine with that, as long as it's open and democratic.

edited 26th Nov '11 9:19:33 AM by BestOf

Quod gratis asseritur, gratis negatur.

^^ And by propping up the "too big to fail" banks loaded up with toxic state debt you only feed this cycle to continue.

None of the bailouts should ever have happened to begin with and now because of them you have a debt crisis that is rapidly consuming the Euro and threatening to dissolve it entirely.

Don't pull the Keynesian "well we have to!" crap, it's been how many years this has been raging increasingly out of control the more you try to stem it? Over 2 now? The time has passed for intervention, if the Eurozone wants to save itself it's time to just cut their losses and let the countries fail. If the Euro as a currency is a good idea it will weather the failures, if it is not it will be dissolved.

edited 26th Nov '11 9:22:29 AM by MajorTom

"Allah may guide their bullets, but Jesus helps those who aim down the sights."

I agree about the banks. That should already have been done in 2008, instead of the bailouts.

And that's why I said use the money to help the people through the crisis. Seems more efficient to me that way than to prop up the banks at every cost. If we do that, we only reward them to go on taking ever higher risks, knowing he public will bail them out after all. Then you can bet the same will happen again in four years, and then again in eight years and so on and so on!

Unbent, Unbowed, Unbroken. Unrelated ME1 Fanfic

Yup. This is strictly a financial mess. Temporary nationalization (then rolling them back out via a new IPO) is the answer.

If "austerity" is truly necessary it should come with labor reform giving workers/lower classes more economic power at the same time.

edited 26th Nov '11 9:59:14 AM by Karmakin

Democracy is the process in which we determine the government that we deserve

The core problem is the balance of payments issue. And yes, Germany was to blame for part of the crisis, specifically by holding Euro bond rates artificially low so that the peripheral countries could afford to borrow so profligately. Their economies experienced a huge boom which now has to be rolled back, which requires core inflation. It's really that simple. Otherwise it will be a catastrophic collapse that will contaminate Germany.

"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"

It seems to me that Germany doesn't direct the ECB all by itself. Any actions the ECB took were also supported by the South European states. Really I fail to see how from your argument it concludes that Germany has to pay.

edited 26th Nov '11 10:23:18 AM by Octo

Unbent, Unbowed, Unbroken. Unrelated ME1 Fanfic

Germany will pay, one way or the other. The easy way is to allow inflation to increase and the ECB to act as lender of last resort, so that the balance of payments can adjust naturally back to a stable level. The hard way is to cut off the periphery and drive the European economy into recession, which will inevitably involve Germany too.

There isn't a "win" situation for Germany anymore, if they define winning as not getting involved in helping solve the crisis.

"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"

The latter can be weathered. But inflation? Hurting everybody? No way. That's how many South European countries solved their fiscal probelms before the Euro, but that period is over. We will not be dragged down with them.

Unbent, Unbowed, Unbroken. Unrelated ME1 Fanfic

What in the world is so bad about inflation that has everyone freaking out about it? Inflation is not the evil that you think it is.

"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"