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The Future of Europe: An Interview with George Soros

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Re: The Future of Europe: An Interview with George Soros

#51

Post by pessimizer »

gutnor wrote: post #39
pcrh wrote: post #21

Earlier quoted context omitted.

The article is principally about the Euro as a currency, not the EU as a political entity. The EU currently covers more than 12 separate currency zones, to which there are a further 21 European currencies. So, a total of approx 34 currencies (depending on how some are counted). The undeniable success of the EU is based on its ability to have never-ending negotiations between it's constituent parts. With regards to co…

> they have found to their undoubted regret that poor fiscal policies leads to a lot of pain, even if you have a "rich uncle" such as Germany Talk about blaming the victim ... The shitty fiscal policies in Greece or similar problem in Spain, Italy has caused major distress in the population, especially the youth who have had no time to know about and much less profit for their various countries peculiarities. The han…

>The shitty fiscal policies in Greece or similar problem in Spain, Italy

And those were? Greece is the hardest working country in Europe, and Italy was running surpluses before the financial crash.

Re: The Future of Europe: An Interview with George Soros

#52

Post by pessimizer »

Soros: "The incestuous relationship between national authorities and bank managements [is what's wrong with European banking.] France in particular is famous for its inspecteurs de finance, who end up running its major banks. Germany has its Landesbanken and Spain its caixas, which have unhealthy connections with provincial politicians. These relationships were a major source of weakness in the European banking system and played an important part in the banking crisis that is still weighing on the eurozone. The proposed banking union should have eliminated them, but they were largely preserved, mainly at German insistence."

Re: The Future of Europe: An Interview with George Soros

#53

Post by gutnor »

pessimizer wrote: post #51
gutnor wrote: post #39

Earlier quoted context omitted.

> they have found to their undoubted regret that poor fiscal policies leads to a lot of pain, even if you have a "rich uncle" such as Germany Talk about blaming the victim ... The shitty fiscal policies in Greece or similar problem in Spain, Italy has caused major distress in the population, especially the youth who have had no time to know about and much less profit for their various countries peculiarities. The han…

>The shitty fiscal policies in Greece or similar problem in Spain, Italy And those were? Greece is the hardest working country in Europe, and Italy was running surpluses before the financial crash.

Just replying to the parent in his own terminology.

That's another thing I didn't like in the handling of the crisis. Making everybody in a country look like criminals to justify their harsh treatment of the country as a whole. So Greeks were lazy taxes dodgers, Spaniards had plenty of hidden money, all Cypriot money was from the Russian crime lords, ...

Re: The Future of Europe: An Interview with George Soros

#54

Post by zurn »

Atropos wrote: post #22
gbog wrote: post #8

It is funny to see the construction of Europe, which is arguably the first time in human history that different groups of people willingly tend towards a common political entity without external threat and blood spilled all over, criticised from inside and outside by the likes of Soros, who will never understand that finance is a tool and not an end. I hope Merkel and other Eurocrats will firmly continue to not liste…

I really don't get the amount of hate and derision the European Union is always getting from US commentators. Culturally and geographically, for example Finland and Greece do not have much in common - yet Finland is willing to help them out, despite the "NO BAILOUT" clause explicitly implemented in the construction of the eurozone. Meanwhile the USA has neighboring countries like Mexico or Cuba with huge problems lik…

Actually Finland has done a lot to trip Greece over (demanding collateral in exchange for loan guarantees, just making their liquidity situation worse).

The whole thing was just about the debtor bloc trying to save their own ass while imposing harsh austerity on Greece.

Re: The Future of Europe: An Interview with George Soros

#55

Post by wisty »

gbog wrote: post #8

It is funny to see the construction of Europe, which is arguably the first time in human history that different groups of people willingly tend towards a common political entity without external threat and blood spilled all over, criticised from inside and outside by the likes of Soros, who will never understand that finance is a tool and not an end. I hope Merkel and other Eurocrats will firmly continue to not liste…

It's the gold standard debate all over. The Euro prevents the Greeks from printing their way out of a crisis. They can regulate their banks, but not control their currency.

I think Soros would rather be speculating on fiat currencies, rather than less flexible ones. So you are probably right that he has an agenda. It doesn't mean he's wrong, though. There would be other predators who would rather try short bonds written by gold (or Euro) standard countries ... just because they'd rather have the Euro doesn't mean they are wrong simply because they would be pushing an agenda.

The gold standard debate is just so annoying though. There's rarely any data, just lots of arguments, and bickering at cross purposes. (X is good because it's more stable ... no wait it's good because it's less stable ... no it's good / bad because it punishes evil investors / lazy non-investors ... wait, what do you mean the banks effectively print money, shouldn't it be illegal to lend out money they don't have in a safe?).

Re: The Future of Europe: An Interview with George Soros

#56

Post by waps »

dageshi wrote: post #47
Atropos wrote: post #40

Earlier quoted context omitted.

That may be the official US/UK media narrative, but it is nonsense to anyone who looks at the underlying data. Do you realize that a restructuring of Greece debt has already happened with Greece private creditors incurring around 53.5% face value losses? And guess what - the Eurozone is fine. Furthermore Greece GDP and banking is tiny compared to the Eurozone. Does sharing the same currency mean that mean that the US…

It was the precedent that mattered not the size of the Greek economy, in the same way that the size of Lehman brothers in the US didn't matter individually but the precedent that the US government would no longer write blank cheques to bailout failing institutions did. With Greece the precedent was set that what "NO BAILOUT" actually meant was "NO BAILOUT" if the problem is small enough to not impact anyone else.

I think the big elephant in the room argument is right. They legislated their debt out of existence, and ... the market didn't care.

So the US can do the same, with the same result. Declare all US debt/treasuries to only have 50% of the nominal value. Immediate result : large drop, followed by recovery. Longer-term result : nothing.

So the Cyprus and Greece crises made this a valid policy option. It doesn't look like it will be necessary any time soon, but it has gone from inconceivable to "will happen at some point in the future".

The market doesn't actually want you to pay back your debt. They care, but not enough for real consequences for the debtor. Why ? Simple : there's no other place to put money if you have very low interest rates everywhere.

Re: The Future of Europe: An Interview with George Soros

#57

Post by krrrh »

Atropos wrote: post #22
gbog wrote: post #8

It is funny to see the construction of Europe, which is arguably the first time in human history that different groups of people willingly tend towards a common political entity without external threat and blood spilled all over, criticised from inside and outside by the likes of Soros, who will never understand that finance is a tool and not an end. I hope Merkel and other Eurocrats will firmly continue to not liste…

I really don't get the amount of hate and derision the European Union is always getting from US commentators. Culturally and geographically, for example Finland and Greece do not have much in common - yet Finland is willing to help them out, despite the "NO BAILOUT" clause explicitly implemented in the construction of the eurozone. Meanwhile the USA has neighboring countries like Mexico or Cuba with huge problems lik…

There are so many automatic stabilizers built into the US economy which move wealth from some states to others when economic disruption occurs (stuff like unemployment insurance, military spending, federal minimum wage laws, social security, Medicare, DOE transfers, etc) that you rarely see explicit bailouts of failed states in the USA because they're mostly unnecessary. The EU simply has nowhere near the fiscal integration of the US, so member states can really go off in their own direction despite all the supposed safeguards such as Maastricht.

I get that you're pointing out that culturally Finland has less in common with Greece than Oregon has with Louisiana, but that was not always the case. The US just has had the benefit of a couple of hundred years of deep integration since the Louisiana purchase. Cuba is not part of any political association with the US, so naturally it can't be compared.

Also... The US did bail out the Mexican government and save it from default in the 1990s, quite quickly and decisively. The fact that most people don't even remember that, and yet so much ink has been spilled and so many teeth gnashed over whether, or how, or whether to break up the union instead says a lot about the fragility of the EU (to be expected of course, it's still such a young institution). The integration and benefit to the states in the US has been enormously successful. Many would like to see the EU get there but it is still more correctly analogous to NAFTA which even though it was only a few years old and much less ambitious, played a big part in justifying the Mexican bailouts.

http://en.m.wikipedia.org/wiki/1994_economic_crisis_in_Mexic...

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