Spain in state of total emergency

[BlasterBates]

The thing is if you wanted to break up the Euro now would not be the time to do it because you might spark off global credit crunch, simply because it would mean too many big debts being written off, this would mean there would still need to be a bail out. The next step would be Eurobonds, would cost Germany a premium on it's new issued debt, but at the moment they're at record lows, lower than it was when they had the DM.

If you are serious about the break up of the Euro best to wait untl things have stabilised.

Of course that's when it becomes clear that it wouldn't make much difference.

[sasguru]

Got it in one.

The Spanish banks crisis is almost identical to the US banking crisis in 2008 which had nothing to do with the Euro either.....or Dollar if one would like to be pedantic.

You really are a first class moron if you think this has nothing to do with the Euro. Not the sharpest analytical tool in the block are you?

[Mich the Tester]

If you are serious about the break up of the Euro best to wait untl things have stabilised.

Of course that's when it becomes clear that it wouldn't make much difference.

Indeed, that's why I say the Euro is a red herring. Regardless of your currency, whether it's Euros, Guilders or Groats, if you keep spending it faster than the economy can generate wealth, you're going to go bust. It would be nice if someone would explain that to the Dutch public who are now complaining about the EU demanding deficits ot 3% or less. FFS, it's still a deficit. Secondly, as I've said, we can't allow western European states to fail; I'm convinced that peace in Europe is largely thanks to moderate governments elected by well fed and generally satisfied populations. If some of those populations have less to eat and become discontented, the peace won't last long.

[Mich the Tester]

You really are a first class moron if you think this has nothing to do with the Euro. Not the sharpest analytical tool in the block are you?

Personally I think it does have a lot to do with the Euro, but more to do with governments spending more money than they have and the public treating elections as a trip to Harrods with someone else's credit card. Yes, the Euro includes economies that are not very compatible, but even outside of the Euro, you can't go on for ever spending more than you have.

[sasguru]

Indeed, that's why I say the Euro is a red herring.

You're missing the major fact that the artificially low interest rates the Euro countries enjoyed (which were right for Germany but not for anyone else) meant borrowing was cheap and so people could run up those debts in the first place.
If interest rates are 15% as opposed to 3% people and businesses think harder about borrowing money.

FFS why don't you guys do Economics 101, science 101 etc before spouting bollox on here?

[Diver]

You're missing the major fact that the artificially low interest rates the Euro countries enjoyed (which were right for Germany but not for anyone else) meant borrowing was cheap and so people could run up those debts in the first place.
If interest rates are 15% as opposed to 3% people and businesses think harder about borrowing money.

FFS why don't you guys do Economics 101, science 101 etc before spouting bollox on here?

It goes completely against the grain to agree with Sas, But I agree with Sas

[Mich the Tester]

You're missing the major fact that the artificially low interest rates the Euro countries enjoyed (which were right for Germany but not for anyone else)

Not missing it at all, as I said, the Euro includes economies that aren't compatible.

[BlasterBates]

Being outside the Euro didn't stop Hungary gorge itself on cheap debt.

Hungary: The Greece of Eastern Europe | The Great Debate UK

It also didn't stop Thailand, Malaysia and whole host of Asian countries gorging themselves on cheap dollar debt in the 1990's.

This problem would have happened anyway.

[Mich the Tester]

FFS why don't you guys do Economics 101, science 101 etc before spouting bollox on here?

It's not any of those books/courses that convinced me the Euro is not the central issue, but nevertheless not necessarily part of the solution; it's Taleb's Black Swan theory. The Euro looks to me like one of those projects that's 'too big to fail'; it might have been a nice idea at some time in the past, but these days we really need diversity in business approaches, political approaches and economic approaches, and one big block currency makes that difficult.

[Mich the Tester]

This problem would have happened anyway.

Indeed, I think the problem runs much deeper than the choice of currency. Too many people see democracy as giving them a birthright to spend other people's borrowed money.

BB's right as well; there's a big weakness at the heart of democracy IMO, and it's this; when you vote in a developed, powerful country you are one of a minority of people in the world who can influence decisions that affect nearly everyone in the world, and not just influence the course of the country in which you vote (that's 'globalisation' at work). Trouble is, there's no test of competence to bear this responsibility. The masses seem to be falling deeper into a pulp media driven semi-literacy, but they've got most of the votes. It's not the people who read the quality papers, the FT or the economist, or watch newsnight and piss around on TED.com or edge.org that worry me; it's the people whose brains are pulverised by a diet of Big Brother, the Kardashians and the tabloids, who then go out and cast their vote; the power of stupid people to damage themselves and others, with no benefit to themselves, should not be underestimated.

I don't know how to solve it in a way that's compatible with principles of democracy and human rights, but maybe we need some basic comprehension, literacy and numeracy test, that takes account of possible problems like dyslexia, to ascertain whether someone's really capable of comprehending the news before casting their vote.