Euro area is back on the brink of recession
31–40 of 92 posts
Re: Euro area is back on the brink of recession
#32That I think is the saving grace of Brexit. Investor confidence in Italian public debt will evaporate sooner or later, and I don’t see Germany allowing and paying for a bailout of Italy, given how they reacted to the bailout of Greece. The UK will likely look like a safe heaven for capitals when that happens.
How does Brexit make the UK attractive in the event of a near-term Eurozone crisis? The grim economic outlook if the UK's major trade partners are all in deep recession isn't improved by it having lost a lot of that trade earlier in the year for other reasons, and its economy isn't going to reinvent itself overnight.
Because if (or when) Italy is about to introduce capital controls to prevent its banking system from collapsing, investors will not make a decision based on the industrial outlook of the UK, but based on the stability of its legal and banking system, and its independance from Italy's financial woes.
Re: Euro area is back on the brink of recession
#33The Economist has historically been a big supporter of the EU and globalization. Something has shifted in their perspective. They were also pretty downbeat about the EU's prospects while discussing the Aachen Treaty between France and Germany that was signed yesterday. https://www.economist.com/leaders/2019/01/17/france-and-germ...
Yeah, I had to double check to make sure I was actually reading the Economist. Felt weird to be getting a perspective like that from them. Why the shift?
They don't seem to make the link that maybe Brexit is not such a bad idea after all, which seems a logical conclusion to me.
Re: Euro area is back on the brink of recession
#34Earlier quoted context omitted.
How does Brexit make the UK attractive in the event of a near-term Eurozone crisis? The grim economic outlook if the UK's major trade partners are all in deep recession isn't improved by it having lost a lot of that trade earlier in the year for other reasons, and its economy isn't going to reinvent itself overnight.
Because if (or when) Italy is about to introduce capital controls to prevent its banking system from collapsing, investors will not make a decision based on the industrial outlook of the UK, but based on the stability of its legal and banking system, and its independance from Italy's financial woes.
But the stability of the UK's legal and banking system receives precisely zero benefit from Brexit (quite the opposite) and the UK gains further "independence from Italy's financial woes" from Brexit only inasmuch as it would lose some of the trade it might be expected to lose in the event of a Eurozone recession a little earlier.
(I could just about see how the UK would benefit from being less exposed to Italian financial woes if you anticipated an EU policy response of requiring Member States to contribute to bailouts and/or buy up Italian debt, but that's the bit you ruled out, and I'd see as being unlikely to be applied to non-Eurozone states)
Re: Euro area is back on the brink of recession
#35A headline in search of an article. Very little context provided, would have probably been served even better with just a graph of the euro zone growth from 1999 quarter by quarter versus other economies like Japan, US, China for context. Journalism feels lazier and lazier as it constantly searches for more clicks and ad impressions.
I think there is no chart because, if you go find one, it shows EU growth in the last ten years has been going up and down in a pretty similar fashion to Switzerland, Japan, South Korea, and other non-EU advanced economies. This would indicate that being in the EU hasn't really helped them all that much, but it also hasn't hurt that much (in aggregate). So, not much of a story, which feeds right back to your point.
Well, the EU was not made to improve the economies of its members. Its main goal is to intertwine them enough to make another big war way too painful.
Re: Euro area is back on the brink of recession
#36Earlier quoted context omitted.
Meanwhile, every other country in the World is smooth sailing.
Certainly not, lots of issues in many other countries. It’s just that the density/concentration of problems is higher in EU (IMHO).
The EU doesn't have a looming student loan crisis, or a health crisis due to opioid epidemics. In terms of human suffering caused by these two issues alone I have a hard time believing the EU is worse off.
Re: Euro area is back on the brink of recession
#37Earlier quoted context omitted.
Yeah, I had to double check to make sure I was actually reading the Economist. Felt weird to be getting a perspective like that from them. Why the shift?
They don't seem to make the link that maybe Brexit is not such a bad idea after all, which seems a logical conclusion to me.
I suspect that is the signal from the Rothchild empire - someone will have to pick up the Italian debt and the EU is arguably obsolete in its present form and wouldn't reform when it could prior to the UK referendum. (Rothchild own half the economist and it is largely their mouthpiece).
Going forward and post UK exit from the EU (and probably other nation states too) there will be a reformation around some new organization...
Re: Euro area is back on the brink of recession
#38The Economist has historically been a big supporter of the EU and globalization. Something has shifted in their perspective. They were also pretty downbeat about the EU's prospects while discussing the Aachen Treaty between France and Germany that was signed yesterday. https://www.economist.com/leaders/2019/01/17/france-and-germ...
The Economist may seem like an unusually monolithic publication because they don’t give bylines to individual story authors, but there’s actually quite a bit of variance in opinions in their reporting. They’re certainly not the EU commission’s press office.
Re: Euro area is back on the brink of recession
#39A headline in search of an article. Very little context provided, would have probably been served even better with just a graph of the euro zone growth from 1999 quarter by quarter versus other economies like Japan, US, China for context. Journalism feels lazier and lazier as it constantly searches for more clicks and ad impressions.
I think there is no chart because, if you go find one, it shows EU growth in the last ten years has been going up and down in a pretty similar fashion to Switzerland, Japan, South Korea, and other non-EU advanced economies. This would indicate that being in the EU hasn't really helped them all that much, but it also hasn't hurt that much (in aggregate). So, not much of a story, which feeds right back to your point.
It's gonna be pretty hard to disentangle Switzerland, given how many treaties they have are part of with the EU. Though, the EU isn't primarily about econonomics IMHO; I'd predict that EFTA would have come to pass without the EU as well.
Re: Euro area is back on the brink of recession
#40Since 2007 - broadly the great recession time frame forward - Lithuania has had by far the best GDP per capita growth among Euro members at nearly 40% (nominal, USD terms). Estonia is second, at around 19-20%. Latvia is third at about 11%. Slovakia is up 10%. A distant fifth is Germany at around 7%. Ireland is up a couple percent. Everyone else in the Eurozone is either near flat or negative on growth over the last ~…
Well, looking at https://en.wikipedia.org/wiki/Economy_of_the_Netherlands , it shows Dutch GDP per capita (in EUR, nominal) up by >14% since 2007. You used GDP in USD, but to me that seems somewhat misleading: just because the EUR dropped relative to USD, doesn't mean that the economy suddenly shrank. > I'm not sure how the Euro survives if those sink lower in a recession and see another lost decade. This seems like…
Because an obvious alternative to the Euro exists and was used in the past.