European Union / U.S.A. Debt Crisis

[key2thecup]

Could this collapse the EU experiment? The richer countries like Germany are pissed off and sick of having to pay for failed countries like greece.

If Greece falls so will Spain, Portugal and Ireland all will need bailouts.

EU leaders in race to avert Greek debt default, euro crisis

EU leaders gather in Brussels today keenly aware that they are in a race against time to stop Greece defaulting on debt and preventing the euro from collapse over the next week.

Over a dinner tonight, the EU will begin negotiations on a second bailout for Greece, expected to be at least €120bn (£107bn) with €60bn from taxpayers, in a dash to make a deadline of a 11 July meeting of EU finance ministers.

David Cameron has drawn a red line and refused to become involved in a “Greece II” rescue package in a battle with the German Chancellor who insists that a British contribution will be necessary.

“We were not involved in the first Greek bailout, we are not members of the eurozone and we are not going to become members of the Euro zone as long as I'm standing here,” he said yesterday.

“I don't believe the European financial mechanism should be used for Greece and we have made very clear within Europe we don't think that's appropriate and I don't believe that should happen.”

Angela Merkel will clash with the Prime Minister over her call for the €11.85bn remaining in the European Financial Stabilisation Mechanism (EFSM), after Portuguese and Irish bailouts, to be used for Greece.

German officials yesterday briefed that the EFSM was legally required to be used in any official EU second Greek bailout in contrast to the first rescue which was funded by more informal direct bi-lateral loans from euro zone governments to Greece.

“The German legal situation is clear. The EFSM should contribute,” said a German diplomat, according to the Guardian.

Mr Cameron is helpless to block use of the EFSM, and the use of €1.7bn in British loans, because the decision is taken by a vote, leaving Britain without a veto.

“The decision is taken by qualified majority vote,” said the German diplomat. “Everyone is tied to a QMV decision.”

This would give Britain a compulsory exposure of €1.7bn to a second bailout, taking the government’s total eurozone exposure to over £12bn.

http://www.telegraph.co.uk/finance/financialcrisis/8593963/EU-leaders-in-race-to-avert-Greek-debt-default-euro-crisis.html

[kyledude]

The debt-based economy has been a colossal failure. Fix it now.

[canuckster19]

All this because Greeks refuse to pay taxes, there's so much under the table labour there it's pathetic.

A tax watchdog in Greece found that 14000 upper class Greeks failed to register and pay taxes on their new swimming pools, simply by using google earth and comparing it with the address list of those who registered.

How many used legitimate labour on their new pools you ask? Around 350.

So glad Sweden isn't in the Eurozone, I doubt however that it will matter, my taxes will still end up paying greek problems because they refused to pay theirs.

[Orca_Boy]

The debt-based economy has been a colossal failure. Fix it now.

[OgS.MVP]

Lending more money to Greece is like pouring gasoline into a tank with a huge hole in it.

[Hamhuis Hip Check]

anyone still wanting a north american union?

[Offensive Threat]

My Mother was born in Germany. We have relatives there who are really pissed about the whole thing in a big way. Germanys economy has been doing so well the last few years and now Greeces inability to take care of its own problems is threatening that. If Spain and Ireland both collapse too then I can see Germany pulling out of the union. They have the 4th largest economy in the world and dont need this **** dragging them down.

Greece is a messed up country. unemployment is now over 16%. The Gov is a bureaucratic nightmare mess. The EU had already bailed them out to the tune of over 60 billion euros and about to loan them 110 billion more and when the Greek Gov stated new austerity measures and taxes would have to be implemented the Greek people rioted in protest. Its like people on a sinking ship refusing to put on life preservers because they are uncomfortable.

Ive been to Greece. Athens, The Greek islands, the whole deal. That was 21 years ago. We were backpacking around Europe and North Africa. When we exited the train station onto the streets of Athens in the early evening I was sure there was a building on fire nearby. There was so much soot and smoke in the air. It turns out that was just how Athens was.Our pictures from the top of the acropolis look down on a city blanketed in smog. But the street vendors had the best Gyros Ive ever eaten. Currently Greece has 97% of the standard of living of France. It was more 3rd world than 1st world when I was there so that rapid increase in standard of living came at the expense of a rapid increase in debt over the last 20 years. Its finally caught up with them.

[OgS.MVP]

My Mother was born in Germany. We have relatives there who are really pissed about the whole thing in a big way. Germanys economy has been doing so well the last few years and now Greeces inability to take care of its own problems is threatening that. If Spain and Ireland both collapse too then I can see Germany pulling out of the union. They have the 4th largest economy in the world and dont need this **** dragging them down.

Greece is a messed up country. unemployment is now over 16%. The Gov is a bureaucratic nightmare mess. The EU had already bailed them out to the tune of over 60 billion euros and about to loan them 110 billion more and when the Greek Gov stated new austerity measures and taxes would have to be implemented the Greek people rioted in protest. Its like people on a sinking ship refusing to put on life preservers because they are uncomfortable.

Ive been to Greece. Athens, The Greek islands, the whole deal. That was 21 years ago. We were backpacking around Europe and North Africa. When we exited the train station onto the streets of Athens in the early evening I was sure there was a building on fire nearby. There was so much soot and smoke in the air. It turns out that was just how Athens was.Our pictures from the top of the acropolis look down on a city blanketed in smog. But the street vendors had the best Gyros Ive ever eaten. Currently Greece has 97% of the standard of living of France. It was more 3rd world than 1st world when I was there so that rapid increase in standard of living came at the expense of a rapid increase in debt over the last 20 years. Its finally caught up with them.

[WHL rocks]

I don't see Germany exiting the EU. The EU is built on Germany and to a lesser extent on France. Germay exits, EU collapses.

Greece is looking to China for help. China has taken over a mega port in Greece and are in the process of expanding it. China is also interested in buying other state owned businesses from Greece. Onoter option is for China to buy greek debt which they may not want to do. Other options are that China buy Euro Debt. Currently 25% of China's FR's are in the Euro. They are looking to diversify so they may buy more Euro instead of US $.

All this makes the IMF look bad. China has approx $3 trillion in reserves and the west is begging for bail outs.

[FeStealth]

I don't see Germany exiting the EU. The EU is built on Germany and to a lesser extent on France. Germay exits, EU collapses.

Greece is looking to China for help. China has taken over a mega port in Greece and are in the process of expanding it. China is also interested in buying other state owned businesses from Greece. Onoter option is for China to buy greek debt which they may not want to do. Other options are that China buy Euro Debt. Currently 25% of China's FR's are in the Euro. They are looking to diversify so they may buy more Euro instead of US $.

All this makes the IMF look bad. China has approx $3 trillion in reserves and the west is begging for bail outs.

[key2thecup]

http://www.youtube.com/watch?v=oBSf35a13HQ

[WHL rocks]

Yeah, China will have to diversify away from the USD, but unfortunately, trying to prop up the EURO might not be the best solution either. The EU is nearly collapsing over Greece, a minor country with probably one of the smallest GDP in Europe... the "real" problem will come with even a G8 state like Italy starts defaulting... but hopefully the EU will collapse before then. Choosing which currency you prefer is like choosing whether you want to drink vomit/urine or eat manure..... not really a choice you want to be making.

The only way China (and any other country, person, business, etc) to preserve wealth is by investing in tangible assets, hence the rush for China to buy up resource companies, diversification into bullions, etc. China should be stocking up on gold.

A good speech from some British MP for the EU last year. A minor prophetic vision of what can happen in Europe.

[theminister]

Double.

[theminister]

Agreed. Without debt we wouldn't have this standard of living to put at risk. We should look to the economies of Myanmar, North Korea and Eritrea for guidance on the successes of a cash-only system.

While I'm joking, yes the system needs to be fixed. I just want access to a mortgage if I can afford it. And I want to invest in good ideas that I believe in. For the record, I think government spending is the real enemy here.

[toro]

Unless there is a change in the political structure of Europe, whereby the northern countries subsidize the southern countries, or there are dramatic changes in the southern countries in terms of productivity, which is highly unlikely, it is a matter of "when," not "if" Greece and the rest default. The math simply does not work.

[key2thecup]

Unless there is a change in the political structure of Europe, whereby the northern countries subsidize the southern countries, or there are dramatic changes in the southern countries in terms of productivity, which is highly unlikely, it is a matter of "when," not "if" Greece and the rest default. The math simply does not work.

[Offensive Threat]

One of the requirements the EU is putting on Greece for continuation of the bailout is for them to sell off some Greek Gov owned corporations especially in power and oil. China is always interested in desperate sales but the main interest seems to be coming from Russia. Ex Russian mob guys who now own a number of large oil companies in Russia can easily grasp how to finance and run a oil rig or utility in a corrupt system.

[Buggernut]

I don't see Germany exiting the EU. The EU is built on Germany and to a lesser extent on France. Germay exits, EU collapses.

[Buggernut]

All this because Greeks refuse to pay taxes, there's so much under the table labour there it's pathetic.

A tax watchdog in Greece found that 14000 upper class Greeks failed to register and pay taxes on their new swimming pools, simply by using google earth and comparing it with the address list of those who registered.

How many used legitimate labour on their new pools you ask? Around 350.

So glad Sweden isn't in the Eurozone, I doubt however that it will matter, my taxes will still end up paying greek problems because they refused to pay theirs.

[Offensive Threat]

Would that be Germany's problem then?