Natixis: Ireland is a northern Eurozone economy

later12

Very interesting paper published by the French investment bank Natixis just now, which divides the Eurozone economies into two distinct camps - north and south.

http://cib.natixis.com/flushdoc.aspx?id=58924

The "Northern euro zone" countries are characterised by large-scale industry, trade surpluses, profitable companies, lack of public finance problems, etc.
The "Southern euro zone" countries have become deindustrialised, have
external deficits, not very profitable companies, first used private
indebtedness and then public indebtedness to boost growth, have a
competitiveness problem, and now a growth problem.
Germany, the Netherlands, Austria and Finland are clearly part of the North;
Spain, Greece, Portugal of the South.

It's refreshing to see that Ireland was classified as a Northern European economy - although just about so.

On the other hand, France, which has been running a trade deficit and which has seen sluggish growth, sluggish competition and poor profitability is classified as a Southern Eurozone economy.

The paper does not quite turn the tables on what we perceive as the periphery, and what we perceive as the core of Europe, nevertheless it is a refreshing re-take on how the various member states deviate from the Eurozone ideals.

It also underlines, in my opinion, the challenge that faces policymakers in terms of setting out on defining a broad single economic and monetary policy for the entire Eurozone bloc. Have a look at some of these rather stark figures, for an example.

beeftotheheels

Time to start printing the "Ireland is not France" teeshirts?

later12

Well... I don't know about the t-shirts, but with the exposure of certain French banks - particularly Société Générale - to Greek debt, and the imminent downgrades, I think it is important for the French leadership to remember that they are not immune from the fallout.

beeftotheheels

later10 wrote: »

Well... I don't know about the t-shirts, but with the exposure of certain French banks - particularly Société Générale - to Greek debt, and the imminent downgrades, I think it is important for the French leadership to remember that they are not immune from the fallout.

We can only hope that Sarkozy must now be aware why it is that the ECB insisted we not burn senior holders, and must also realize that the Irish people have a legitimate gripe with being charged a penal interest rate on the element of debt being used to repay those senior bond holders, seeing as how we are bearing that burden to benefit other members of the global financial community.

lmimmfn

beeftotheheels wrote: »

We can only hope that Sarkozy must now be aware why it is that the ECB insisted we not burn senior holders, and must also realize that the Irish people have a legitimate gripe with being charged a penal interest rate on the element of debt being used to repay those senior bond holders, seeing as how we are bearing that burden to benefit other members of the global financial community.

no offense, but im getting fed up with all the media attention this "reduction in interest rate" is given, they're crippling our country and expecting stupid interest rates( even worse than the deadly ninja assassin that is the IMF ) on a loan that we're using to pay back the original lenders. The whole point of this 'bailout'( sorry investors making money ) is:
A lends x billion to B
B cant pay and accrues interest, so A lends x billion again to B so B can pay back A's initial loan and B accrues interest on x and has to pay the whole lot back.

Borrowing from Peter and reborrowing from Peter to pay the initial loan back, wheres the sense in that?

Everyone harps on about this cut in interest rate that we are due, if we turned to the ECB tomorrow and said we were going to default because there is no way we could pay they wouldnt be long taking notice, slashing the interest rate and doing whatever they could to help us rather than punishing us and making us a complete laughing stock.

Tipp Man

Surely we fall from the Northern Europe Pedestal when they look at our budget deficit and try to compare it to their statement of "lack of public finance problems"

Although it is good to see that a large part of the economy is functioning

thebman

lmimmfn wrote: »

Everyone harps on about this cut in interest rate that we are due, if we turned to the ECB tomorrow and said we were going to default because there is no way we could pay they wouldnt be long taking notice, slashing the interest rate and doing whatever they could to help us rather than punishing us and making us a complete laughing stock.

I think if we tried to default they would most likely say something along the lines of, we can't stop you but here are the reasons why that is a really dumb idea for you and everyone else in the Eurozone which you are a part of.