If Germany and France were facing economic ruin while everyone else was booming...

hatrickpatrick

...who wants to bet that Eurozone monetary policy would involve devaluing the currency, allowing bad banks to fail, burning bondholders etc - regardless of how these policies would affect the booming countries?

beeftotheheels

hatrickpatrick wrote: »

...who wants to bet that Eurozone monetary policy would involve devaluing the currency, allowing bad banks to fail, burning bondholders etc - regardless of how these policies would affect the booming countries?

That's kind of how we ended up here? Euro interest rates were set by reference to the needs of the core economies (Germany was sluggish) rather than the needs of the peripheral economies like Ireland and the we failed to counteract the interest rates with fiscal policy.

bcmf

The Euro and its interest rates are all about France and Germany. Sure they maybe the biggest economies but one rule does not suit all

Was it not Nigel Lawson who said ,when quizzed about joining the euro currency, something along the lines of ' so many countries and economies cannot be put into one interest rate zone'

hatrickpatrick

Just seems to me that there is little to no democracy about it whatsoever. France and Germany make the rules to suit themselves and everyone else can either get in line or f*ck off. And I'm not just talking about economics (remember Sarkozy's remarks on Lisbon when we democratically rejected it?)

I approve of the eurozone and of the open borders concept of the European Union, but I think everyone will agree that what we did NOT sign up for was the slow descent into having absolutely everything decided for us by the French and Germans. Is there NO mechanism by which the rest of Europe could shoot down their policies? It seems that there is a lot of grumbling from people in Europe about the French-German dominance of it, but no practical action from the politicians on the ground to counteract it...

Is it fear? Resignation? What? In times gone by when anyone attempted to enforce such a system on the EU, there would literally be a war over it. In this day and age we (allegedly) have the democratic systems in place to make such wars unnecessary - yet not only is no one contemplating war, they aren't even using the democratic mechanisms they do have!!! What's going on? Has Europe gone soft? Have all the politicians and civil servants in Europe resigned themselves to living in the United States of Franamy?

keithclancy

hatrickpatrick wrote: »

Just seems to me that there is little to no democracy about it whatsoever. France and Germany make the rules to suit themselves and everyone else can either get in line or f*ck off. And I'm not just talking about economics (remember Sarkozy's remarks on Lisbon when we democratically rejected it?)

I approve of the eurozone and of the open borders concept of the European Union, but I think everyone will agree that what we did NOT sign up for was the slow descent into having absolutely everything decided for us by the French and Germans. Is there NO mechanism by which the rest of Europe could shoot down their policies? It seems that there is a lot of grumbling from people in Europe about the French-German dominance of it, but no practical action from the politicians on the ground to counteract it...

Is it fear? Resignation? What? In times gone by when anyone attempted to enforce such a system on the EU, there would literally be a war over it. In this day and age we (allegedly) have the democratic systems in place to make such wars unnecessary - yet not only is no one contemplating war, they aren't even using the democratic mechanisms they do have!!! What's going on? Has Europe gone soft? Have all the politicians and civil servants in Europe resigned themselves to living in the United States of Franamy?

Ireland doesn't have an 'Open Border', neither does the UK.

I still need to show my passport when travelling to Dublin becuase Ireland and the UK never signed up to the Schengen Treaty.

So for example, if your from India and get a Schengen Visa, you can travel everywhere in the EU, except Ireland and the UK without applying for another visa.

If it wasn't a democracy they would have told Ireland to get stuffed and accept it.

And before you say "Well its because its an Island", Malta is already a member.

While its free movement for EU Citizens, you cannot travel to Ireland without crossing a border control or without a valid document (Passport/National ID Card)

Tora Bora

Pssssssttttttttttttttt ...................... France is going down the tubes:D:D

Finnbar01

hatrickpatrick wrote: »

Just seems to me that there is little to no democracy about it whatsoever. France and Germany make the rules to suit themselves and everyone else can either get in line or f*ck off. And I'm not just talking about economics (remember Sarkozy's remarks on Lisbon when we democratically rejected it?)

I approve of the eurozone and of the open borders concept of the European Union, but I think everyone will agree that what we did NOT sign up for was the slow descent into having absolutely everything decided for us by the French and Germans. Is there NO mechanism by which the rest of Europe could shoot down their policies? It seems that there is a lot of grumbling from people in Europe about the French-German dominance of it, but no practical action from the politicians on the ground to counteract it...

Is it fear? Resignation? What? In times gone by when anyone attempted to enforce such a system on the EU, there would literally be a war over it. In this day and age we (allegedly) have the democratic systems in place to make such wars unnecessary - yet not only is no one contemplating war, they aren't even using the democratic mechanisms they do have!!! What's going on? Has Europe gone soft? Have all the politicians and civil servants in Europe resigned themselves to living in the United States of Franamy?

Yep, Fine Gael and Labour made an election promise of burning the bond holders and as soon as they get voted in, they do a U turn. The voice of the people completely ignored.

1huge1

I really wish we followed the same route as the United Kingdom, had confidence in our Irish pound and have more control of our economy.
The UK is along with France and Germany the major powers in Europe but the UK doesn't take the same approach as the other two in that it never enforces EU regulation on other countries and since it is such a major power within the EU it is rarely forced on domestic issues from the rest of the EU, this is what it could of been like for us if we had not entered the €.
In 1999 when all currencies that were joining the Euro were pegged to the new currency, the Irish punt was the only currency that was actually worth more than the €, quote me if im wrong here but it was something like .787564p would get you €1 while it was the opposite for the rest of the currencies.

Voltex

Thatcher had a point i think

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hatrickpatrick

http://www.ft.com/cms/s/0/65bd6068-7b2f-11e0-9b06-00144feabdc0.html#axzz1Lzx2eixB

Yet again the French screw us. European monetary policy is literally set solely for their benefit and Germany's, then they b*tch about it when other countries do things they don't like.

I thought the EU was meant to be a partnership of nations, not a Franco-German empire?!

1huge1

Voltex wrote: »

Thatcher had a point i think

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Nothing is coming up for me, just a white square

Liam Byrne

I wish we could lose the phrase "burning the bondholders".......no-one wants to "burn" anyone......we just want them to realise that "the value of investments goes down as well as up", and accept the consequences of their own bad choices.

The phrase was invented by those interested in keeping reasonable dissenting voices from being given a reasonable hearing.

beeftotheheels

Liam Byrne wrote: »

I wish we could lose the phrase "burning the bondholders".......no-one wants to "burn" anyone......we just want them to realise that "the value of investments goes down as well as up", and accept the consequences of their own bad choices.

But we changed the rules by guaranteeing their investment. Had we not given the guarantee then yes, the value of the bonds would have fallen drastically. But we did - our bad choice as it were.

You'll note that AIB is trying to repurchase unguaranteed sub at a discount,

http://www.irishtimes.com/newspaper/breaking/2011/0511/breaking16.html

and litigation by bondholders has already started in the High Court.

http://www.reuters.com/article/2011/04/20/ireland-banks-idUSLDE73J1Z820110420

swordofislam

There's 150 million people in France and Germany. There's 20 million in the PIGS NOT counting Italy - do the Math, also the Germans accepted big cuts in living standards we haven't we could fix our problems tomorrow if we weren't such a bunch of traitors.

1huge1

swordofislam wrote: »

There's 150 million people in France and Germany. There's 20 million in the PIGS NOT counting Italy - do the Math, also the Germans accepted big cuts in living standards we haven't we could fix our problems tomorrow if we weren't such a bunch of traitors.

Fine then lets leave out Italy as you say

Lets substitute the I as Ireland

P-10.6million
I-4.5million
G-11million
S-46million

This adds up to 72.1million

I suggest you review your maths, and as for the Germans accepting big cuts in their standard of living, what are you basing this on?

I live in Germany and can tell you the average german's standard of living has barely changed at all in the financial crisis and they are now powering ahead here.

mlumley

Tora Bora wrote: »

Pssssssttttttttttttttt ...................... France is going down the tubes:D:D

Where did you get this information from???????????

Liam Byrne

beeftotheheels wrote: »

But we changed the rules by guaranteeing their investment. Had we not given the guarantee then yes, the value of the bonds would have fallen drastically. But we did - our bad choice as it were.

Well, someone's bad choice....definitely exclude me from that "our".

The fact is that - FF's ridiculous all-encompassing guarantee aside - "burning" implies "not paying them a cent" and basically giving them the two-fingers.

Getting them to face the facts that their choice of investment was chronic is not the same thing.

Yes, the regulator & other Ahern "friends" didn't do their jobs, but that doesn't change the fact that the bondholders chose to go into business with dodgy characters and organisations like Anglo.

So my objection is the phrasing that's deliberately invented to make "getting them to face the facts" seem unreasonable, misrepresenting it as an apparent emotive vendetta, and the media and ourselves should not be taken in by it.

hatrickpatrick

When I talk about burning bondholders, I'm talking about the government getting out of all involvement with saving private companies. If a bank fails let it fail and take its investors with it. It was their choice to invest in it. IF you invest in a company which goes bust, TOUGH. You don't have the right to expect others to pay for it.

I'm basically sick of banks being treated as different from other private companies. A private company is a private company. Banks do not deserve special treatment above everyone else.

View

hatrickpatrick wrote: »

When I talk about burning bondholders, I'm talking about the government getting out of all involvement with saving private companies. If a bank fails let it fail and take its investors with it. It was their choice to invest in it. IF you invest in a company which goes bust, TOUGH. You don't have the right to expect others to pay for it.

Bondholders loan companies/governments money. Shareholders invest in companies - their investments have in most cases already been "burnt" as a result of investing in the banks.

hatrickpatrick

View wrote: »

Bondholders loan companies/governments money. Shareholders invest in companies - their investments have in most cases already been "burnt" as a result of investing in the banks.

So then why the hell are we bailing them out? If you invest in any other type of private company and it goes belly up, you're simply f*cked. Tough.

Why do we give special treatment just because a company happens to be a financial institution?

beeftotheheels

hatrickpatrick wrote: »

So then why the hell are we bailing them out? If you invest in any other type of private company and it goes belly up, you're simply f*cked. Tough.

Why do we give special treatment just because a company happens to be a financial institution?

Because had Lenihan done nothing in September 2008 we could have woken up in the morning with no money (not defending the guarantee, just answering your question) if AIB failed.

35% of domestic banking runs through AIB. If your account was with AIB your money could have been gone, even if your account was with BOI or someone else if your employer's account was with AIB they could no longer pay you.

The impact of letting Anglo fail would have been a few tears. The impact of letting AIB fail would have been carnage. A huge number of Irish people would not only have lost any savings they had, but would have lost the ability to be paid. Businesses could have lost the ability to pay bills, and pay employees.

A run on a retail bank is to be avoided at almost all cost, particularly if that bank accounts for a huge chunk of the domestic market (as AIB does).

This was one of the reasons, post Wall Sreet Crash, that US retail banks were precluded from getting involved in investment banking.

The failure of an investment bank affects other banks, the failure of a big retail bank affects people.

So Lenihan gave the guarantee.

Having given the guarantee we now cannot take it back.

This is why retail banks in general, and our banks in particular post guarantee, are different to other businesses.

mlumley

hatrickpatrick wrote: »

http://www.ft.com/cms/s/0/65bd6068-7b2f-11e0-9b06-00144feabdc0.html#axzz1Lzx2eixB


I thought the EU was meant to be a partnership of nations, not a Franco-German empire?!

So you belived the guff they were giving out, it was always about French/German domination of europe. And as for a democracy, why did we have to vote twice on two referendums. The EU will always be that way,

mlumley

beeftotheheels wrote: »

Because had Lenihan done nothing in September 2008 we could have woken up in the morning with no money (not defending the guarantee, just answering your question) if AIB failed.

35% of domestic banking runs through AIB. If your account was with AIB your money could have been gone, even if your account was with BOI or someone else if your employer's account was with AIB they could no longer pay you.

The impact of letting Anglo fail would have been a few tears. The impact of letting AIB fail would have been carnage. A huge number of Irish people would not only have lost any savings they had, but would have lost the ability to be paid. Businesses could have lost the ability to pay bills, and pay employees.

A run on a retail bank is to be avoided at almost all cost, particularly if that bank accounts for a huge chunk of the domestic market (as AIB does).

This was one of the reasons, post Wall Sreet Crash, that US retail banks were precluded from getting involved in investment banking.

The failure of an investment bank affects other banks, the failure of a big retail bank affects people.

So Lenihan gave the guarantee.

Having given the guarantee we now cannot take it back.

This is why retail banks in general, and our banks in particular post guarantee, are different to other businesses.

Wrong. Deposits up to a certain leval were guarenteed

Boskowski

1huge1 wrote: »

I live in Germany and can tell you the average german's standard of living has barely changed at all in the financial crisis and they are now powering ahead here.

Maybe you shouldn't be looking at the last two years but rather more at the last 10 or 20?

Germany has over the last 20 years decreased the cost of doing business and employing people. In some areas quite dramatically.
I don't necessarily agree with this but its a fact nonetheless.

During the same time Ireland has increased the same dramatically and also has gone nuts on public spending.

Only saying.