Recession: Job losses will accelerate, predicts CBI

[Lucifer Box]

Then we've got to borrow more and keep spending!

Raise taxes and introduce more laws. It's only fair.

[sasguru]

doesn't that depend how highly geared companies and people in the region are to credit ?

in Germany/Austria credit is more regulated/controlled than in the UK meaning that people are more likely to be savers than credit card spenders in these countries, meaning that when the bank increases interest rates it doesn't have the immediate on / off effect on spending that it has in the uk, interests rates in the Euro zone are not the thumb screws that they are in the UK

not to mention, higher rates will attract more foreign investment looking to take advantage of those rates

the UK is in a tricky position, lower rates too much and the foreign money will pull out and look for better returns elsewhere

here endeth today's economics lesson

Milan.

True as far it goes ...But

High interest rates may not affect a relatively non-indebted German consumer but certainly affect companies' capital movements and borrowings of every size and description. This is especially true of the German economy which are dominated by its Mittelstand

[AlfredJPruffock]

Raise taxes and introduce more laws. It's only fair.

Well we need to find money from somewhere for this new Trident system ...

PS will this numbing news be used as part of the Brits presentation to these nanny Eu folks as to how to run their economy ?

PPS Apparently the UK spends a whopping 2.1 billion pounds on Cocaine annually , now if that was made legal and taxed say at 50 per cent ... Bingo ... a billion quid for NL !!!

You read it here first remember ...

[Joe Black]

Bugger me, Milan got something right!

The Box Heads are not a nation of borrowers, most rent rather than mortgage and many would not know how to use a credit card if given one.
When I arrived here in 98 IKEA in Munich didnt accept them and lots of shops still dont.

I think its changing a bit though, certainly on the first point places like Belgium seem to be following the UK with lots of young couples rushing to buy properties they can renovate. Theres even a Belgium version of 'Location, Location, Location' now on television.

As for the credit-card thing, yep quite a few places still don't seem to accept them and not too many people seem to have one.

[wendigo100]

As for the credit-card thing, yep quite a few places still don't seem to accept them and not too many people seem to have one.

When I worked in Germany ten years ago, I seem to recall that they used debit facilities a lot more than they did here in the UK at the time. I was with the (cheapo cheapo) VolksBank.

[Joe Black]

Debit cards

Yep, same here, most people use Bancontact which is a sort of Benelux only debit card/electronic purse.

Amongst the group from my evening class (20-36 age range) I think I'm probably the only one who actually even has a credit-card and I get the feeling that sometimes when I use it in places like supermarkets people find it a bit strange, as in "hasn't he got any money"...

What I have seen here quite often, and what would be found equally strange in the UK, is people having wads of large denomination notes with them. And when I say large I mean pulling out a €500 to pay for something in the supermarket which costs €50 and the cashier not batting an eyelid, let alone checking if its real.

All part of Belgiums 'zwart' economy I guess...

[AlfredJPruffock]

Yep, same here, most people use Bancontact which is a sort of Benelux only debit card/electronic purse.

Amongst the group from my evening class (20-36 age range) I think I'm probably the only one who actually even has a credit-card and I get the feeling that sometimes when I use it in places like supermarkets people find it a bit strange, as in "hasn't he got any money"...

What I have seen here quite often, and what would be found equally strange in the UK, is people having wads of large denomination notes with them. And when I say large I mean pulling out a €500 to pay for something in the supermarket which costs €50 and the cashier not batting an eyelid, let alone checking if its real.

All part of Belgiums 'zwart' economy I guess...

Yes its noteworhty the great pride and ingenunity which Belgians take in anythings a wee bit Zwart or Noir for that matter here,bless them.

And its such a cash orienteated society because there is no culture of credit.

Most folks save about half of their earnings here and happily blow the rest, few have mortagages, rent is cheap and fewer have any form of credit.


PS Wendigo I too was in the Fatherland ten years ago in Frankfurt, whereabouts where you ?

PPS JB I do not have nor watch a televsion as I prefer the radio, so I was unaware of the Belgian location program ...

[DodgyAgent]

I hate to piss on your parade Milan

doesn't that depend how highly geared companies and people in the region are to credit ?

in Germany/Austria credit is more regulated/controlled than in the UK meaning that people are more likely to be savers than credit card spenders in these countries, meaning that when the bank increases interest rates it doesn't have the immediate on / off effect on spending that it has in the uk, interests rates in the Euro zone are not the thumb screws that they are in the UK

not to mention, higher rates will attract more foreign investment looking to take advantage of those rates

the UK is in a tricky position, lower rates too much and the foreign money will pull out and look for better returns elsewhere

here endeth today's economics lesson

Milan.

Milan, I am not picking on you, you are still my best friend... BUT
Part of the problem that Germany is facing is that it is failing to stimulate investment into creating new businesses. Borrowing is as you say more regulated creating a further restriction on the setting up of businesses. Borrowing stimulates growth; growing property prices stimulate spending which in turn creates jobs. That is how the UK has managed so well. The problems come when borrowing gets out of control, but the market corrects this through interest rates. Germanys problems are that there is nothing to stimulate its economy even though the cost of borrowing is so low. So a saving mentality is not a good thing. Remember people can only obtain yields from their saving if someone else is borrowing their money.. Janet and John economics.

Interest rates are not thumbscrews they are the best way to stimulate and control an economy. It is governments that apply thumbscrews

The answer to Germanys problems are actually quite easy. Germany does not even have to endure the hardships that the UK did under Thatcher, because they would be starting from a much stronger economic base.
Germany needs lower interest rates (the Euro is preventing them from doing) to stimulate a spending and borrowing boom. It then needs to remove its employment laws and lower (gradually) welfare payments. It can even begin some large government infrastructure projects.

So as people spend and borrow, entrepreneurs will start investing in building businesses, encouraged by the spending boom. Jobs will be created reducing costs of welfare and BOBS YOUR UNCLE

[Joe Black]

"Yes its noteworhty the great pride and ingenunity which Belgians take in anythings a wee bit Zwart or Noir for that matter here,bless them."

I'm suprised how open they seem to be about it though...

When I got my car repaired (through a well known chain) the first thing I was asked was did I want to pay VAT, my new accountant offers a choice of invoices, and even a solicitor I saw recently, when asked how should I pay, suggested just sticking a few €100's in an envelope and putting it through the letterbox.

[AlfredJPruffock]

"Yes its noteworhty the great pride and ingenunity which Belgians take in anythings a wee bit Zwart or Noir for that matter here,bless them."

I'm suprised how open they seem to be about it though...

When I got my car repaired (through a well known chain) the first thing I was asked was did I want to pay VAT, my new accountant offers a choice of invoices, and even a solicitor I saw recently, when asked how should I pay, suggested just sticking a few €100's in an envelope and putting it through the letterbox.

Just think of it as a healthy disrespect for the State and everythig official.

That way can all enjoy delightful Belgian Beers on the terraces of St Gerry followed by a slap up meal, every evening. .

Down with the State.