Is the European Central Bank taking the piss?

[BRMC_rover]

Interesting article here showing how the foundations were hammered in a similar manner to that of which we have seen with Royal Mail and other setups. Sold off for a pittance within a corrupt ring of private entities, inevitably making an already, proven failed recovery plan of Austerity into a much steeper hill in which to roll the boulder up.

http://www.eureferendum.com/blogview.aspx?blogno=85671

[Filo]

Well the Eurozone have agreed to fund the bridging loan from the EFSM fund, exposing Britain to £1b of emergency funding to pay off the European Central Bank debt that Greece owe. So despite not being a member of the Euro we are being forced to pay to the ECB (German) bank, I find that totally unacceptable and the sooner we have a referendum on Europe the better!

[BillyStubbsTears]

Excellent and very readable summary of how the ECB is disgracefully and deliberately crashing the Greek banking system to pressure them into "behaving". Totally against all principles of what a central bank is supposed to do. And it's being done for political reasons.
http://escoriallaan.blogspot.be/2015/07/in-2011-at-height-of-sovereign-debt.html?m=1

And the author is scarcely a bleeding-heart pinko. He is one if the most respected academics of free-market economics.

In 50 years time, historians will be brutal in their assessment of what Europeans are doing to other Europeans here. And we in UK stand in the sidelines mithering about whether we temporarily lend 0.03% of our GDP to the pot.

[Filo]

Excellent and very readable summary of how the ECB is disgracefully and deliberately crashing the Greek banking system to pressure them into "behaving". Totally against all principles of what a central bank is supposed to do. And it's being done for political reasons.
http://escoriallaan.blogspot.be/2015/07/in-2011-at-height-of-sovereign-debt.html?m=1

And the author is scarcely a bleeding-heart pinko. He is one if the most respected academics of free-market economics.

In 50 years time, historians will be brutal in their assessment of what Europeans are doing to other Europeans here. And we in UK stand in the sidelines mithering about whether we temporarily lend 0.03% of our GDP to the pot.

They have a Central Bank to service the Euro, much like we have the Bank of England to service the Pound, I wonder if the EU would be so obliging towards us if we were in the same position as Greece?

[BillyStubbsTears]

Aye. And what has the EU ever done for us?

Apart from the £800m of EU funds that went into re-building South Yorkshire from 2000-08.

[Filo]

Aye. And what has the EU ever done for us?

Apart from the £800m of EU funds that went into re-building South Yorkshire from 2000-08.

Theres a difference, they were EU grants, that were probably available to every other member Country of the EU, the UK make a significant contribution to the EU. In this case we are talking about a currency that we are not part of, but we are still expected to contribute towards it's continuing life support. Remember Black Wednesday? It cost the UK around £30b of reserves to prop up the £, interest rates soured briefly to 14%, where were our great friends in Europe then with the billions to help us out?

[BillyStubbsTears]

Filo

No. They were Objective One funding. They were money that the EU SPECIFICALLY allocated to South Yorkshire, because by the late 90s, we were one of the poorest regions in Europe. Poorer than parts of Portugal and Southern Italy.

A driving purpose of the EU has been to take from the richer areas and give a helping hand to the poorer ones. We have benefitted greatly from that. The consequences are all around you in the roads, bus stations, airport, offices all across South Yorkshire. The place (and our future as a result) are unrecognisable from what they wer like after 20 years of being left to rot. And it was EU money that made that possible.

Worth remembering when we bitch about pitching in now.

[BillyStubbsTears]

Filo

Regarding Black Wednesday, that money was lost because of a mistaken political policy. We could afford to lose that money. It didn't bankrupt us.

In fact, crashing out of the ERM was the single best thing that happened to our economy in decades. It led directly to a dramatic increase in growth that went on for a decade and a half. It would have been preferable if Lamont hadn't pissed away billions gambling that he could beat the market and keep us pegged to the DeutschMark, but that's a side issue. We could afford to lose that money without us being crippled.

Greece is different. Greece IS crippled. It has no money left. If it doesn't get emergency funds, it's economy will collapse. They will not be able to afford to buy medicines or oil.

There's a world of difference between the two cases.

(By the way, in 1976, when the Treasury thought [1] that we actually HAD run out of money and that we were in the edge of economic collapse, we were loaned money by the IMF. Here's the list of countries that lent money to the IMF to give to us:
Iran
Kuwait
Nigeria
Oman
Saudi Arabia
Venezuela
West Germany
Belgium
Sweden
Norway
Austria
Holland
Switzerland
Trinidad and Tobago

So yeah, when it looked like WE were in a situation like Greece, half the then EU pitched in to help.)

[1] As it happens, we didn't need the loan. The Treasury civil servants got their numbers wrong. But one of the pre-requisites of is getting the loan was that Callaghan's Labour Govt had to introduce swingeing austerity and the start of neo-liberal economics. Dennis Healy, the Chancellor then, swears that this was a coup d'état by senior civil servants who deliberately cooked the books to make a problem look like an existential crisis when it wasn't. Whatever the truth, that loan destroyed Labour's credibility and paved the way for Maggie.

[BobG]

I've never heard that story before Billy - about Denis Healy and the alleged cooking of the books. Fascinating.

Filo: there are several other, vastly different angles people should consider before reacching a conclusion about this question of whether or not to contribute a few coppers to the Greek bailout. My personal touchstone is that something like 90% of every major war the world has seen in the last 400 years has started somewhere in Europe. I mentioned before that only the Korean war and the Vietnam war started outside  - and even then one of them had a European nation actively involved in sponsoring, and starting it.   You could argue the US Civil war counts too but that wasn't a war 'between' nations. It was a very important war for all sorts of reasons, but it was an internal thing so I'm not counting it as a war in the context of this discussion.

Think about wars in Europe Filo. The 16.5 million military and  the further 7 million civilians who died in WW1 plus the 16 million who died from influenza in 1919 all died because Europeans couldn't agree between themselves. The 60 million military and civilians who died in WW2 died because Europeans couldn't agree between themselves. The uncounted millions who died, starved or froze to death in the Napoleonic wars died because Europeans couldn't agree among themselves. The Franco-Prussian war. The War of Austrian Succession. The Crimean war. The Anglo Dutch wars. The War of the Spanish Succesion. The Seven Years war. The Carlist wars. The Austro-Prussian war. How many more millions Filo?

I can't understand why any right thinking person would not put preventing any repetition of that miles and miles and miles higher than a squabble about a petty three one hundredths of one percent of our income in one sngle year. 

Pay the bloody money and pipe down. We really do need Europe to stay together. Look at the Kremliin. Do you want a fractcured Europe facing that madman once he becomes bored by the Ukraine? That man is positively dangerous. I can't tell you how I know, but he really is both scary and dangerous. We've discussed the re-emergence of an assertive and strong Germany beginning to once more dominate central Europe. Do you want to let Europe fragment so that the restraint imposed by the people and institutions of Europe withers away?

I tell you, keeping Europe together, collectively restraining each other, collectively talking to each other, is more important than ANYTHING else. Lose that and you can use your imagination about what will then happen.

And by the way,, all those numbers I've quoted are just for the dead. On top of all those dead people  you can add, for example, 250,000 Englishmen who had to have a limb amputated during WW1. How many Frenchmen? How many Germans? How many Indians? How many Russians? How many Americans? How many? How many?? How many....???

Forget history at your peril Filo.

BobG

Later: lol! I've just re-read Billy's absolutely fascinating stat below. It's reminded me that the beginning of the end of the Roman empire in the west came from a crossing of the Rhine too. When the Goths, the Alans, the Franks and the Vandals got pushed west by the growing might of the nomadic tribes from the steppes they ended up crossing the Rhine. They ended up sacking Rome itself. That Rhine. It's allus been a reight bugger.

[BillyStubbsTears]

Wars in Europe.

Between 400AD and 1945, an army crossed the Rhine aggressively on average once every 37 years.

Think about it. Think about it deeply before you start complaining about the EU.

EDIT: Between 111BC and 1945.

By the way, these are true figures. We're in a post-Mick zone here. Source available if anyone cares.

[BobG]

Hands up all those who've been to the Menin Gate at 8pm. Any night will do.

Hands up again anyone who thought what they witnessed was pointless, boring or unemotional.

Hands up again anyone who thinks reminding ourselves about the impact of war is pointless.

And if anyone has not been to the Menin Gate at 8pm, any night, why don't you stop by on the way to wherever you're going. It's not hard to find. Its in Ypres. Belgium. Belgium isn't very big. It's got lots of floodlit motorways.

BobG

[Tihsllub]

I'm with Filo and Wheatleylad on this one. They've got a damn cheek wanting us to throw away a lot of money on a lost cause.

Its time people realised that the shackling of nations together in an unsustainable currency is far more likely to lower the standard of living for everyone in Europe and sow the seeds of discontent leading to war.

Sticking with the EU to avoid war is the road to ruin and war.

[BillyStubbsTears]

You know when you get that annoying thought at the back of your mind and you just CAN'T put your finger on what it is?

[BillyStubbsTears]

Got it!

https://m.youtube.com/watch?v=lIpev8JXJHQ

[wheatleylad]

I cannot believe the politically motivated comments being made here. No amount of socialist ranting can change the facts. The Greeks lived above their means and were irresponsible. The EU amongst others lent them huge amounts of money and they did not change their ways. It is hardly Germanys fault is it. They cant win whatever they do. The Greeks had a choice, either agree to sort their economy out or leave the Euro. You cannot blame the Germans for wanting some assurance of ever seeing any of their money back.

As for the subject of democracy, that is not the fault of Germany either. The Greek leader had a clear mandate to leave the Euro and chose to ignore it.

A bit of common sense please and less armchair politics. Live in the real world.

[wilts rover]

Oh dear Wheatleylad, only been on here a couple of weeks and you are already falling into the old 'madmickism' of doing exactly the same as that you are critising other people for.

[RedJ]

Is there any way the mods can just ban his IP address?

[i_ateallthepies]

RedJ, I can't deny feeling the same as you, but after many on here appealed to everyone simply to resist responding to him, guess what, he was so feeble he f**ked off within days.  If we all resolve to do the same again and stick to it we could be rid of the idiot for ever.

[River Don]

Would it not be better if Greece just pulled out of the Euro right now, devalued and went back to the Drachma? If the UK and our allies the U.S, Australia, Canada and the rest offered her support the Greek economy could be growing before long.

As it is Greece will be back in the same desperate situation before very much longer, won't it?

[BobG]

Mick: you're on ignore again mate. Best place to put idiots.

BobG

[BillyStubbsTears]

RD

Possibly. There's no question that (in their own interests) they should have done that in 2010 instead of taking the first bailout.

But if they hadn't taken the first bailout, they'd have brought down the entire Eurozone. It really was THAT serious. Greece defaulting would have led directly to Italy, Spain, Portugal, Ireland defaulting with catastrophe visited upon the European(and global) banks and economies.

It really doesn't bear thinking about.

But Greece didn't do that. They took one for the world. They took the bailout which gave the EZ a chance to sort out the banks' toxic debts.

That has reinforced Europe's foundations. But it has utterly f***ed Greece's economy, through the Austerity imposed on a Greece as a condition of the bailout. Why the f*** the Greek Govt didn't play a stronger hand in 2010 is anyone's guess. They should have said "yes we will take a bailout. To save Europe. But we are not applying your Austerity medicine. Try to impose that and we will default and bring your whole edifice down."

The tragedy is that, once Greece elected politicians who were prepared to have that strength, the EZ had put up firewalls and protected its banking system.

So, over the last month, when Greece upped the ante and hinted at leaving the Euro, what happened? The ECB called their bluff and crashed Greece's banks. Then Wolfgang Schaueble turned round and said, "Yeah? You want to push us into giving you a better deal? Well you can f*** off and leave the Euro. With no banking system and no means of paying for Aspirins for the next 6 months. Be my f***ing guest."

And Greece shite it and signed up to the humiliating deal on offer instead.

Greece has been played at every stage. They were mollycoddled into not defaulting when they had the power to. Then faced with Armageddon when they actually did threaten to.

Politics eh? f***ing tough stuff. And Wolfgang Schaueble is this generation's evil master of the art. He's won this battle. But f*** me, has he lost the long term war. By exposing the brutal, undemocratic issues at the core of the Euro, he has planted land mines under it. It's just a question of when they go off and bring the lot down.

[River Don]

As you say BST land mines.

This Greek deal is not sustainable. They have done their best but everyone knows what they have signed up,for will not work. Either the EU gives way and is forced to behave like a single nation or Greece finds itself right back where it is now.

[RedJ]

As you say BST land mines.

This Greek deal is not sustainable. They have done their best but everyone knows what they have signed up,for will not work. Either the EU gives way and is forced to behave like a single nation or Greece finds itself right back where it is now.

And I wonder which country would see itself as stepping up to the plate to take the lead role...

[River Don]

Ze Germans.

Edit: not that I am very much against ze Germans these days. Volkswagen, Kraftwerk, Adidas what's not to like?

[Filo]

I'm with Filo and Wheatleylad on this one. They've got a damn cheek wanting us to throw away a lot of money on a lost cause.

Its time people realised that the shackling of nations together in an unsustainable currency is far more likely to lower the standard of living for everyone in Europe and sow the seeds of discontent leading to war.

Sticking with the EU to avoid war is the road to ruin and war.

You mis quote me, I'm not against Greece getting a helping hand, I just think it's members within the Euro that should be helping, not members of the EU that are outside of the Euro

[BillyStubbsTears]

Another heavyweight landing a blow on Germany's chin.

http://www.brookings.edu/blogs/ben-bernanke/posts/2015/07/17-greece-and-europe

Bernanke is of course the ex head of the Federal Reserve Bank in the USA who led them brilliantly through the recovery from the Crash. Because he spent decades studying the 1930s. Back in 2009, we had right wing idiots like Niall Ferguson and Peter Schiff screaming that a Bernanke was going to crash the dollar and turn the States into a hyper-inflationary nightmare like Zimbabwe. He was right, they were wrong, every step.

Now, this blog goes to the core of the Euro problem. He points out that Germany has an astonishingly strong export drive (yep RD, VW-Audi, Addidas, Siemens, BMW, etc, etc). But that has only been possible through help from the Euro. Because they have weaker economies tied into the Euro, the value of the Euro compared to the dollar, yen, pound, yuan etc is lower than the value of the DM would be. So their exports are cheaper. So they can sell more.

Germany has built its entire economy on exporting. They are brilliant at it. They don't consume as much at home and they see this as morally proper. They are denying their desires to build a strong future. And they scorn anyone who doesn't do the same.

Trouble is, it's a zero sum game. If I export more than I import, you must import more than you export. To be a morally admirable exporter, you NEED the feckless importer. Not everyone can be a Germany. It is logically impossible.

So it's not a morality game.

Now look at the economics. If Germany had its own currency, this would naturally peter out. Selling lots of exports drives up the value of your currency. Making your exports less attractive. Meaning you sell fewer exports. But this isn't happening to Germany. Because the Euro is being kept low by the catastrophe of the periphery countries' economies.

Look at it that way and the morality turns on it's head. Germany NEEDS other countries in the EZ to be basket cases if it's export mania is to continue. NOW who is the morally repugnant one?

The really sad thing is that the answer is bloody easy. As Bernanke points out, what the EZ desperately needs is for Germans to start spending and consuming. For EZ inflation to lift a bit. For the basket case countries to have a dynamic market to expiry THEIR products to, not only wine and sunny beaches but petrochemicals [1] and high level engineering products [2].

It's up to Germany. Does it continue it's infantile obsession with economics as morality, where it convinces itself that being thrifty and self-denying is good, or does it grow up and start taking on its responsibilities?

[1] One of the more depressingly bigoted comments that you see thrown about in this debate is that Greece has nothing to export but kebabs and olives. In fact Greece's largest export sector is oil and petrochemicals. It imports oil from the Middle East, processes and stores it and exports it to the rest of Europe. BIG export market. If Europe were growing.

 [2] Like Italy for example, which had a vibrant and dynamic engineering sector, but which has been crushed by Germany having the same currency and therefore a huge advantage in the export markets.

[BRMC_rover]

RD


That has reinforced Europe's foundations. But it has utterly f***ed Greece's economy, through the Austerity imposed on a Greece as a condition of the bailout. Why the f*** the Greek Govt didn't play a stronger hand in 2010 is anyone's guess. They should have said "yes we will take a bailout. To save Europe. But we are not applying your Austerity medicine. Try to impose that and we will default and bring your whole edifice down."

BST. The Greek finance minister at the time was an unelected, pro European with ties to the right wing economics game. He was the one that passed the terms.

I can't be arsed to correct MadMicks new alias as he knows he's just adding a bit of bait with his uninformed and ignorant, tabloid headline, opinion.

Once Podemas win the next election in Spain, I think we'l see the fall of the EU. A louder voice to communicate all of its flaws.

[BobG]

And that, BRMC, would be a tragedy of epic proportions. And sadly, it looks as if ou've got a good chance of being right too. Nationalism will then really begin to drive policies. Who fancies Germany then? How long would the special Franco-German relationship last...?

Oh. Mick. Don't bother replying to this. You're incapable of offering anything worth reading. Did you happen to learn how to use capital letters while you were on your sabbatical?

BobG

[BRMC_rover]

BST, I read a similar article explaining how the Euro has transformed Germany's export market to be so rewarding for them. It explains why Germany will go to any lengths to keep things as they are. That means drawing up terms for the Greeks that have not even tried to be sugar coated, as the rest of the world watches the hostage situation in which they have had to concede.

[wheatleylad]

Oh dear Wheatleylad, only been on here a couple of weeks and you are already falling into the old 'madmickism' of doing exactly the same as that you are critising other people for.

I don't why you seem to be convinced that I am the other person. I am not. Is it so hard to believe that there may be more than one person who disagrees with some people on here? I have not personally attacked or abused anybody on here. I challenge their opinions , not attack the person. perhaps you could try and do the same?