Reply to: Iceland committed to joining the Euro

[The Spartan]

mwahhahaha that's got to burn

[SimonMac]

How very dare you!

I've heard your ring goes for considerably less than €3 on the open market

[The Spartan]

hahaha yeah it's what I hated about holidaying there no proper sanitation

[EternalOptimist]

What I don't understand is the Greeks, they're trying to pass austerity measures so they can get more money and people are striking and objecting. Won't that mean that the country will go down the pan?

nothing in Greece goes down the pan. You even have to sh1t in a plastic bag and leave it next to the bog for the cleaner.

disgusting country

[DodgyAgent]

I'm not convinced by this thesis. German banks are relatively small and certainly not responsible for all the irresponsible lending that has taken place, or even a particularly significant chunk of it, and their manufacturing is competitive because unlike a lot of "lower cost" places they have managed to contain wage inflation. That has less to do with the € and more to do with the fact they simply haven't had the sort of credit bubble that many of the other eurozone countries had IMO. The end result is that Germany is one of the "lower cost" EU countries.

Precisely my point. Germany has removed cheap labour competitiveness by imposing the Euro on the other manufacturing countries of europe- most notably Italy and France. it has kept its own labour costs low mainly because it has enjoyed an exchange rate that would have been considerably less favourable had it stuck with the Mark. As for the German banks it doesnt matter how big or small they are they have lent money to consumers to buy German goods - just as other banks have. the reason the Germans do not have a credit bubble is because the Germans do not consume. What is hilarious is that they have stoked the credit bubble elsewhere and are now left paying for it anyway

[doodab]

Of course! They are not stupid are they. By imposing the Euro they have wiped out cost competition from "lower cost" EU countries and they have kept exchange rates disproportionately low, thus maintaining price competitiveness of their products.
Their banks have lent Eurozone consumers vast amounts of money to buy German products.

I'm not convinced by this thesis. German banks are relatively small and certainly not responsible for all the irresponsible lending that has taken place, or even a particularly significant chunk of it, and their manufacturing is competitive because unlike a lot of "lower cost" places they have managed to contain wage inflation. That has less to do with the € and more to do with the fact they simply haven't had the sort of credit bubble that many of the other eurozone countries had IMO. The end result is that Germany is one of the "lower cost" EU countries.

[DodgyAgent]

But if countries we've lent to default won't that make our financial position more precarious?

Probably

[The Spartan]

But if countries we've lent to default won't that make our financial position more precarious?

[DodgyAgent]

And UK is different how?

Because we are masters of our own destiny. If we want to let Russians into our country it is our decision. If we want to borrow like feckless idiots then it is our decision and we can suffer the consequences. No one is saying our bed is better but it is ours to mess up if we want to.

[DimPrawn]

Does that mean the Prawn Rings will now be €3 not £3?

How very dare you!

[SimonMac]

Does that mean the Prawn Rings will now be €3 not £3?

[AtW]

eventually Europe's many problems: demographic ageing, lack of competivity, high labour costs mean it is going to be low growth area for the next generation

And UK is different how?

[DodgyAgent]

It seems that the Germans have been the main beneficiaries of the Euro isn't their economy doing really well in comparison with the rest of the EU

Of course! They are not stupid are they. By imposing the Euro they have wiped out cost competition from "lower cost" EU countries and they have kept exchange rates disproportionately low, thus maintaining price competitiveness of their products.
Their banks have lent Eurozone consumers vast amounts of money to buy German products.

Now they have to pay for it by bailing the rest of Europe out of its financial crisis

[The Spartan]

It seems that the Germans have been the main beneficiaries of the Euro isn't their economy doing really well in comparison with the rest of the EU

[sasguru]

Iceland wanting to join the eurozone is hardly a ringing endorsement of it!

Quite. Even if the cracks are papered over, eventually Europe's many problems: demographic ageing, lack of competivity, high labour costs mean it is going to be low growth area for the next generation