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Italy’s teetering banks will be Europe’s next crisis

economist.com

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Re: Italy’s teetering banks will be Europe’s next crisis

#131

Post by pjmlp »

mtanski wrote: post #116
pjmlp wrote: post #33

Earlier quoted context omitted.

As a foreign living in Germany I do appreciate the mentality that things "should be done the correct way", but many here don't understand you cannot just change a country's culture by forcing them to strictly follow EU rules. As it has already been proven by the lumping economies in the southern Europe, people will suffer and everyone will just make use of black market for jobs and goods to survive at any cost or jus…

> As a foreign living in Germany I do appreciate the mentality that things "should be done the correct way", but many here don't understand you cannot just change a country's culture by forcing them to strictly follow EU rules. You mean like Germany's biggest car maker solved the disel exhaust correctly? I don't your generalization stands up. What I can agree with is that the Germans are sticklers for sticklers sense…

> Germany's instance to be a stickler for sticklers sake is not helping anybody

Which is why I mentioned "but many here don't understand you cannot just change a country's culture by forcing them to strictly follow EU rules.".

The VW case is seen by many as an exception and usually every corruption case tends to be dealt exemplary, whereas in my home country (PT) corruption, specially the small one (owning favors) is still seen as profitable, because no big fish really gets prosecuted and it is the only way some things are actually done.

We know for such that such cases will drag in court and be archived after a few years of public discussion on the media.

Good luck trying to live in the southern or eastern Europe trying to do without small favors. It is possible and many people strive for it, but it isn't easy.

Re: Italy’s teetering banks will be Europe’s next crisis

#132

Post by adrianratnapala »

Gmo wrote: post #111
simonh wrote: post #50

Earlier quoted context omitted.

You manage a German bank. You follow strict capitalisation rules, are careful about the loans you make and operate your business according to the highest principles. You clients start doing more and more of their business with an Italian bank that has poor capital reserves and a shoddy loan book and is losing money, but offers better terms to customers. The bank looks like it's going to fail, so the Italian governmen…

Except the German banks are not as clean as they would like you to believe, particularly the regional ones.

I read simonh's comment explaining why German banks were not particularly clean. That is, within the eurozone (or any equivalently open financial realm) if one country is willing to subsidise bad loans, then banks from all round will need to pile in on the scam.

Re: Italy’s teetering banks will be Europe’s next crisis

#133

Post by madshiva »

guelo wrote: post #24

It’s easy for Merkel to insist that Italy has to strictly follow EU rules since she doesn’t have to win an Italian election. The Euro just seems like a complete failure. Giant economies are limping along with 20% unemployment, unable to recover 8 years after the recession. In contrast the US has managed an OK recovery, now closing in on full employment. The problem is that each EU national leader is accountable only…

This is totally wrong. The current unemployment of EU is at 9%. That's the same unemployment rate of 2002-2004 before the "Great Recession" of 2007-2008. Then YES, the EU is recovering, but slowly and not all the country recover well.

We all suffered from the recession, even in Switzerland where we have the less unemployment rate. This was not because of the EU, but because all bank was infected with subprime then this had slow done all the economies, US and EU.

Re: Italy’s teetering banks will be Europe’s next crisis

#134

Post by blahi »

dredmorbius wrote: post #122
blahi wrote: post #25

Earlier quoted context omitted.

The world's population in the 1900 was 1,5B people. By 1970, it was twice that. By the year 2000, it was twice that again! And by 2050 it will be 9B. Where does the money for all those people would come from if not from borrowing (money from the future)?

Where do cricket points come from? Money comes from the same place. It's not substance. It's not energy. (Though yes, it's exchangeable for both. And time. And space.) It's information. About obligations and demand rights. It can be created as fractional reserve. Or simply issued into existence (thogh market ops make pricing more transparent). While we're at it, I'm not entirely certain of that 9 billion figure eithe…

>(Though yes, it's exchangeable for both. And time. And space.)

Yeah, that's kind of a big differentiation though. Isn't it?

Re: Italy’s teetering banks will be Europe’s next crisis

#136

Post by ZenoArrow »

tonyedgecombe wrote: post #129
ZenoArrow wrote: post #120

Earlier quoted context omitted.

The BBC has a bias for whomever is in power. You can see it most clearly in their political coverage. For example, compare this... https://www.youtube.com/watch?v=JpkpUaJF8Og With this... https://www.youtube.com/watch?v=jVe5foPumHE

I'm not sure what your seeing, the Tories weren't plotting against their leader whereas Labour were and still are, no journalist can ignore that.

At the time of those videos, the Labour leadership coup wasn't in full effect, the questions instead were focused on hammering on the 'unelectable' narrative the BBC and other mainstream media outlets have been aiming at Corbyn since he got in the leadership race.

Contrast this with the softball questions that Cameron was getting. Worth remembering there's plenty of controversial decisions that the Conservatives made in the recent past that they could've discussed, that 'no journalist can ignore', I can go into details if you like.

Additionally, I could point out plenty of other examples of media spin from the BBC against Corbyn. Would be willing to share more.

Re: Italy’s teetering banks will be Europe’s next crisis

#137

Post by mamon »

return0 wrote: post #102
legulere wrote: post #90

Earlier quoted context omitted.

I still haven't seen a good reasoning why the Euro is to blame for the economic problems in southern Europe. It certainly is a issue that those countries can't devalue their currency anymore, but devaluing is not a miracle cure.

Blaming the euro masks the real reason that southern economies went south: The reasons are actually outside the EU. The un-competitiveness of the south was subsidized by the EU for decades, and has turned greece , spain and portugal to dependent nations with little innovation. People don't buy the idea that making their labor cheaper will bring prosperity. Instead, they opt to leave their countries in search of bette…

>> The un-competitiveness of the south was subsidized by the EU for decades

And one way of subsidizing them was through Euro currency. Bonds of Italy, Greece, Spain, etc. had lower interest rates in Euro that they would have if they were in their own currencies. Many financial institutions had just blindly been buying them as "EU bonds", without paying much attention which country they came from.

Re: Italy’s teetering banks will be Europe’s next crisis

#138

Post by madshiva »

ktRolster wrote: post #47
fibo wrote: post #45

the big problem in Italy are taxes, I pay 38%, but for more than 55k you pay 41%, how politicians pretend Italy can survive? In Switzerland you pay 16%.

How can Switzerland survive on 16%? That is my question.

This is because it's only an average not a real fact. Some people pay more, some people pay less. When you can't have more than 25K in a year, you don't pay income. If you have million you don't pay because you are smarter and can escape the tax... or at least fix it with a flat tax of 15%. Medium class pay the most but this is hidden, hidden in all the small tax.

Re: Italy’s teetering banks will be Europe’s next crisis

#140

Post by Fenntrek »

madshiva wrote: post #133
guelo wrote: post #24

It’s easy for Merkel to insist that Italy has to strictly follow EU rules since she doesn’t have to win an Italian election. The Euro just seems like a complete failure. Giant economies are limping along with 20% unemployment, unable to recover 8 years after the recession. In contrast the US has managed an OK recovery, now closing in on full employment. The problem is that each EU national leader is accountable only…

This is totally wrong. The current unemployment of EU is at 9%. That's the same unemployment rate of 2002-2004 before the "Great Recession" of 2007-2008. Then YES, the EU is recovering, but slowly and not all the country recover well. We all suffered from the recession, even in Switzerland where we have the less unemployment rate. This was not because of the EU, but because all bank was infected with subprime then th…

I think you misunderstand.

Yes, the EU as a whole looks good...

It's when you peel away the EU flag and look at individual countries you see that some economies are in the gutter pretty much due to countries having vastly different needs.

Whats in say Germany's interests isn't in Italy/Greece's interest economically, economies are having crisis points constantly and continuous band aids instead of enacting policy that will fix it with a solid foundation.

I personally don't know whats needed to fix this, even Europe-wide economic policy is a hard sell because of the vastly different needs of individual countries within the union.

Something needs to happen, there's a generation of young people being left behind with unemployment/underemployment and their future is becoming more and more murky.

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