Hmmm... I have some savings in the Eurozone and in the Swedish Kronazone. Thanks to internet banking, moving it all to Krona would take me about 10 mouse clicks. Like a rat fleeing the sinking ship... I will keep my eye on developments.

Wish I had done it last year when the Euro was at an all time high against anything and everything.

According to a Greek mate of mine, the German government offered to write off the debt if Greece handed over either the Parthenon or Crete or both. This has been reported as fact, over there.

Another thing he told me that I never knew, there's shit-loads of oil in the Aegean, that the Greeks have been ordered by the CIA not to touch, 'cause they don't want to upset Turkey.

Oh, and another thing, the Germans still owe the Greeks shit-loads from WW2, when their gold reserves got nicked.

How much of this is true, I dunno.

I mean he told me all that down the pub, to be fair.

He's a clever bloke though. Got a PhD and shit.

There were certainly German newspapers saying that Greece should flog some of its islands to raise cash, I'm not sure it was government policy.

The Nazis did steal gold from the Bank of Greece in 1941. However, the German govt paid 115 million deutschmarks in compensation in 1960 (whehter this was actually the value of tehe gold, I've no idea). The German government also likes to point out that since 1960, the German govt. has provided Greece with 33 billion euros in aid.

Greece does pump a little oil from the Aegean, but not much. It's true that there are suggestions about there being more oil off the dodecanese islands (right next to Turkey), but it wouldn't take the CIA to tell them that drilling there before there was a treaty in place dividing the continental shelf and providing some economic security for the oil companies asked to develop the field was a bad idea.

Oh, just fucking excellent..

Actually, when you think about what the lower euro is doing for German manufacturing, you have to wonder if Merkel isn't doing this deliberately.

Nah, Merkel is freaked by the NRW elections and the general state of the German electorate, who are being whipped into a frenzy by the likes of Bild.

But wtf is the logic here...there was a crisis and a bailout, so Germans should vote back in the Party of gerhard schroeder, who did more than anyone to undermine the Maastricht rules that might have prevented this shit?

This is populist politics, what does logic have to do with it?

The Euro was a stupid idea and the Tories were right all along. I can't believe I just said that, but it seems true. Somebody convince me otherwise.

Although I can see the pros from a personal point of view. I can get money out of the wall or pay for stuff anywhere in the Eurozone for free. No overseas surcharge. No shitty exchange rate. 50 euros out of my Dutch bank account from an ATM in Amsterdam is the same as 50 euros from an ATM in Helsinki. Similarily, you can move vast sums of money within bank accounts in the Eurozone for free. I can see how that can stimulate cross border business.

And the Euro has essentially saved Ireland from turning into Iceland. For now.

But you can't force a single currency on countries with different economic policies and tax systems, that much is very clear. And while cross border business is stimulated by a single currency, it's still way too difficult to do business in different countries. You still have to deal with the tax bureaucracy of each country. I tried keeping my Dutch translation one man company when I moved to Sweden, but it was a paperwork nightmare. And I have no idea how to set up a Swedish one. And Dutch customers don't want to do business with a Swedish company anyway, as the VAT is 6% higher than in Holland.

There was nothing wrong with the Euro. The problem was letting countries join who weren't suitable to join; and with not finding a mechanism for properly enforcing the Maastricht rules.

You might argue that forcing countries to stick to Maastricht rules ahead of what their electorate choose could begin to restrict democratic powers; but the market already does that anyway so I don't think the argument holds.

All kicking off a bit in Athens, the Beeb News24 report made a point of simultaneously playing up the role of the Greek communist party and then sneering at them for being 'dinosaur like' and not coming to terms with 1989. Yeah, because everything's all about that, still, isn't it?

The problem with the Euro is threefold and is one of economic entities with strong political sub-entities. Lets compare against the USA.

Where one region is having a torrid time economically, whilst others are having a boom, the Federal government can subsidise using its political authority, people can move from depressed areas to boom areas. The EU doesn't have the budget - nor authority or legitimacy to get it - to do the former, and strong linguistic and culutral barriers are far more important than the legal fact of the single labour market.

The idea of a single european currency was a classic example - perhaps the most classic - of the stunning elite-driven process that has been euro integration. This idea that eventually, we'd all get on board and start loving the Ryder Cup more than the World Cup was as asinine and bent as the idea we'd love insecure flexible labour markets.

Trouble is, if you mix in economic depression with a sense of a sell out by the elites combined with a ready-made scapegoat in migrant workers, well, you've got all the toxic ingredients for fascist stew.

Aye, and that stew could possible be more toxic in the wealthier countries, the ones seen as "net donors" to the "sponger states". Not so much propaganda for the Tories, as UKIP and forces beyond

Interesting little stat :

First let's look at the shape of the Greek bailout. Greece has to cut its budget deficit from 13.6% of GDP to 3% by 2014. Of this more than half the tightening will come from spending cuts, and about 4 percentage points from higher taxes.

Is the IMF planning for any of it to come from proper enforcement of existing tax laws, or is that included in the 4%?

The EU doesn't have the budget - nor authority or legitimacy to get it - to do the former, and strong linguistic and culutral barriers are far more important than the legal fact of the single labour market.

The single market, freedom of movement and Schengen. These are all fantastic things that I could not have lived without.

I also think a single currency is, in principle, a great idea, but there's loads of things that still have to be done that were neglected and never given any serious attention. The focus on EU integration so far as been way too much on finance and economy, and not enough on people. Sorting out voting rights for EU migrants is one example. There's a single market and freedom of movement, but no fredom of democracy. I'm an EU citizen living in the EU, yet due to the laws of various member states, I can't vote in a general election of any kind. Nobody wants to address this.

When I moved from the Netherlands to Sweden, the Dutch government sent me a 200 page tax return form for emigrants. I can only imagine what non-Dutch speakers would make of it, because I speak fluent Dutch and even I don't understand it. I have no idea how to fill it in, so next week I have to bring it to an accountant who will do it for 125 euros. This because there is no integration between Dutch and Swedish tax authorities. There is no EU social security number system for harmonising tax returns.

If I own a small company in one EU country, I can't quickly reregister in another coutry. No, I have to first close it down in one country, and then start it up in another country, where all the bureaucracy uses a different system, with a different language. The new company will have new VAT and bank account numbers, much to the confusion of any customers I might have.

So freedom of movement and single market, great. But we're not there yet. There's loads of things they still need to fix and harmonise, because the EU, as an idea, has essentially stood still since Maastricht. They should have kept moving on incrementally as they were doing in the 1980s and early 1990s. Then the natural time would have come for implementing the euro in a market that would have been much more homogeneous than it currently is.

Paul Krugman explains why a default doesn't make anything easier for Greece. A deafult would relieve them of short-term payments, but even then, they're still paying out 8-10% of GDP more than they can afford on their. And if they default, no one will lend to them. So even if you tell the IMF to fuck off, an adjustment on the scale of the current program is inevitable.

BC - I'm pretty sure it's included in the 4%.

The Greek ratio of spending cuts to tax increases is about 1.5: 1. Compare this to the UK, where Labour is proposing 2:1 and the Tories 4:1.

The Greek plan requires a healthy dose of optimism to work - by relying on taxes to do the work to the extent they are, their revenue projections hinge on economic growth returning reasonably soon. If it doesn't, they will undershoot their targets significantly.

Bahiryan wrote:
But you can't force a single currency on countries with different economic policies and tax systems, that much is very clear.

O Hai.

NHH wrote:
The problem with the Euro is threefold and is one of economic entities with strong political sub-entities. Lets compare against the USA.

Where one region is having a torrid time economically, whilst others are having a boom, the Federal government can subsidise using its political authority, people can move from depressed areas to boom areas. The EU doesn't have the budget - nor authority or legitimacy to get it - to do the former, and strong linguistic and culutral barriers are far more important than the legal fact of the single labour market.

The idea of a single european currency was a classic example - perhaps the most classic - of the stunning elite-driven process that has been euro integration. This idea that eventually, we'd all get on board and start loving the Ryder Cup more than the World Cup was as asinine and bent as the idea we'd love insecure flexible labour markets.

Trouble is, if you mix in economic depression with a sense of a sell out by the elites combined with a ready-made scapegoat in migrant workers, well, you've got all the toxic ingredients for fascist stew.

The main problem I always have seen with the Euro is the underlying assumption of labor's ability to migrate. In Europe this is deeply disrupted by language barriers and nationalist tensions. Bahiryan answers brilliantly from the perspective of the firm, which I was less familiar with (I have encountered banking license idiosyncracies, but that is best left elsewhere)

The centralised policy in Europe was always going to be unbalanced through the interesting voting balances and power structures in play.

Gramsci, Martin Wolf in the FT has a different view on the implied growth numbers:

In important respects, the programme is far less unrealistic than its intra-European predecessor. Gone is the fantasy that there would be a mild economic contraction this year, followed by a return to steady growth. The new programme apparently envisages a cumulative decline in GDP of about 8 per cent, though such forecasts are, of course, highly uncertain. Similarly, the old plan was founded on the assumption that Greece could slash its budget deficit to less than 3 per cent of GDP by the end of 2012. The new plan sets 2014 as the target year.

That said, Wolf is far from optimistic in general.