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Forums - Politics - Any possible solutions to the European Debt Crisis?

Ascii on 01 January 2012

I dont read the hole thread.

In my Opinion (and i work with this kind of ideas in my freetime), it can only be solved if you kill the interset rates at all. Nothing is able to survive exponentioal growth. Not the Dollar, not the Euro, not even this World.

See:
http://en.wikipedia.org/wiki/Demurrage_%28currency%29
http://en.wikipedia.org/wiki/Freigeld

AND: http://userpage.fu-berlin.de/~roehrigw/Welcome.html#english



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Aprisaiden on 01 January 2012
routsounmanman said:
As a person who's seen this first-hand, the recent austerity and cap-spending measures are NOT the way to go. Whilst already in a recession, measures like these seriously tear the economy apart. Countries like Greece, Portugal, Ireland and now Italy (seriously they're now the greatest problem by far) simply cannot pay up longterm and will eventually drown in debt.

The European Central Bank should print some money and bail out. I don't get it why Germany resists to this so much; I'm sure a little inflation and especially a weaker Euro should be better for them.


Germany has seen the effects from printing* too much money in order to pay for WWI ( 10 'reichs'marks was worth ~8 'gold marks' in 1919, in 1923 1 billion 'reichs' marks was worth 8.65 'gold marks')

 

*before im corrected i am aware that germany printing excessive quantities of money is only one of the causes of german inflation. 



Alby_da_Wolf on 01 January 2012
kowenicki said:
radishhead said:
The Euro was a terrible idea from the beginning


much worse than that... it was a con and a lie for political gain.

I both agree and disagree. The Euro as it is is horrible, but it could have been a lot better, it's a good idea horribly realised. About avoiding out of control expenditure by irresponsible governments, the rules should have been more elastic, with broader parameters, to allow more freedom of manoeuvring, but enforced more strictly. OTOH, the actual situation, strict rules, but enforced in a lax way until it was too late, just encouraged accounting tricks, while they blocked too many investments, even important ones, and in the end just did harm.

And let's not go into denial, when things didn't go so bad yet, Germany itself tolerated "creative finance" by some governments in order to get them into the eurozone.



Stwike him, Centuwion. Stwike him vewy wuffly! (Pontius Pilate, "Life of Brian")
A fart without stink is like a sky without stars.
TGS, Third Grade Shooter: brand new genre invented by Kevin Butler exclusively for Natal WiiToo Kinect. PEW! PEW-PEW-PEW!   


man-bear-pig on 01 January 2012

They should rent off all greek people to china as sex slaves IMHO



My prediction threads:

Wii U will sell under 40m units (made on 14th September 2012)

PS Vita will sell under 20m units (made on 30th September 2012)

Wii U will sell under 7m in 2013 - I was right

Halo 4 first 9 weeks sales prediction

PS4 to be down YOY in 2015

ArnoldRimmer on 01 January 2012
routsounmanman said:

Also, the devalued Euro helps exports, that's why Germany joined the currency in the first place.

Not quite true. In the end, Germany took the Euro because they had to. Back at the time, former french president Francoise Mitterand demanded Germany dumping their strong german D-Mark for a european currency as a necessary requirement for him agreeing to a reunited Germany, as for example one of Mitterand's former interpreters, Brigitte Sauzy, stated in her memoirs. In the end they may have profited from the Euro (I really cannot judge), but they didn't really have much of a decision and most germans where clearly against the Euro, as the D-Mark had a good reputation while many german analysts kept publically warning about the Euro.



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Alby_da_Wolf on 01 January 2012
kowenicki said:
Alby_da_Wolf said:
kowenicki said:
radishhead said:
The Euro was a terrible idea from the beginning


much worse than that... it was a con and a lie for political gain.

I both agree and disagree. The Euro as it is is horrible, but it could have been a lot better, it's a good idea horribly realised. About avoiding out of control expenditure by irresponsible governments, the rules should have been more elastic, with broader parameters, to allow more freedom of manoeuvring, but enforced more strictly. OTOH, the actual situation, strict rules, but enforced in a lax way until it was too late, just encouraged accounting tricks, while they blocked too many investments, even important ones, and in the end just did harm.

And let's not go into denial, when things didn't go so bad yet, Germany itself tolerated "creative finance" by some governments in order to get them into the eurozone.


Thats the con and lie I am referring to.  Add bribery to the list too... whole nations whose economies were nowehere near robust enough or "clean" enough were allowed in with the promise of greater prosperity.  Greece and Portugal for example... corrupt and weak economies all to broaden the audience for German exports and build the Euro brand.

Yes, now that you specified what you were referring to, I agree, but I'd add that it was also for economic reasons, Germany was so eager to nullify the competitive advantage weak currencies gave to some countries, that it ignored or underestimated every other possible drawback.



Stwike him, Centuwion. Stwike him vewy wuffly! (Pontius Pilate, "Life of Brian")
A fart without stink is like a sky without stars.
TGS, Third Grade Shooter: brand new genre invented by Kevin Butler exclusively for Natal WiiToo Kinect. PEW! PEW-PEW-PEW!   


Paul on 01 January 2012

They could swap greek bonds for unsold PS Vitas.



Kasz216 on 01 January 2012
Lord Ciansworth said:
Kasz216 said:
Lord Ciansworth said:
Kasz216 said:

It's all a matter of forcing irresponsible countries to cap spending at +10% of revenue or so, while actually enforcing it and having regulators check out all the "budget tricks" countries use to hide how much they're really spending.

While spending caps will be introduced in a new EU treaty next year, the seemingly perpetual recession such severe austerity would cause makes it no less likely that troubled states will be able to acquire credit from the markets at sustainable interest rates.

The European Central Bank being granted the power to operate as a 'lender of last resort' is the best solution on the table. Unfortunately Germany seems to be taking a strong stand against such a move, making it a political improbability.

The ECB already is a lender of last resort.

If you mean being a "Lender of Last Resort" to countries... that's a horrible idea.

All that would ensure is that there would be no incentive to actually cap your deficit spending, since the ECB will be there to bail you out anyway... and then either the countries who are responsible would either eventually get fed up and quit the union, have to impliment austeirty themselves to cover the deficit spending countries or outright Europe collapses.

The ECB as a lender of last resort doesn't solve the euro crisis, it strenghens it and just kicks the can down the road abit.

Outside which, proper caps would prevent them from aquiring such credit.  Since money gained from bonds should not count towards Revenue.

As for "Perpetual recession".  It wouldn't be perpetual, though it would occur until their markets shrink back to their "real" fair market value.

It's the best option out there.

The other two lead to massive collapses that take longer to recover from.

I'm sorry but most of that is nonsense. First off, nobody would suggest making the ECB a lender of last resort for states without imposing fiscal constraints on state's deficits, that's a given. Simply assuming, however, you can implent severe austerity, encourage recession and still expect countries to be able to lend from markets that have no faith in them, largely because a lend erof last resort doesn't exist is, frankly, nuts. Your idea stands up when dealing with states wiith relatively small GDPs to some degree as they their European partners can provide them with credit, however if Italy or Spain needs a bailout, the EU doesn't have the firepower to provide those countries with credit, it would overpower both the ESM and the EFSF combined. In short, they need access to the markets to keep going, but the ability to access the market is growing more and more tentative. With a lender of last resort in place, markets would no longer fear these states defaulting to the same extent and wouild be happier to lend at more sustainable levels.

And yes, simply imposing austerity, has and will lead to long term recession. Simply returning to ""real" fair market value", whatever that is supposed to be, will not improve consumer confidence and drive consumerism, the tool needed to exit recession.


Except, you know.  That's exactly what's being proposed above.

The "Strict Austerity measures" being taken are being taken now is simply to get Italy and Greece within what their fiscal deficits SHOULD be under the agreement they previously agreed to, but skirted through "creative accounting techniques."

Also, considering the ECB gets it's money from the richer nations, and it's authority, how exactly do you expect them to come up with more money then the combined euro partners?

And yeah, austerity will lead to a long term recession... hence why is aid they were headed to at least 5 years of pain.  Which by the way is completely unavoidable at this point.  It's just a matter of whether it's restricted to the periphery or if it impacts europe as a who

le.



Kasz216 on 01 January 2012
Jumpin said:
Marks said:
Elect Libertarian presidents?

Seriously the only solution is to cut spending and suffer through austerity until some of the debt is paid off and budgets are balanced.

Libertarianism and Conservatism influence is what caused debt problems in the first place. This isn't exactly the first time this has happened either.

The problem with Libertarians is that they somehow feel that not investing in something is somehow a good thing . Yet this is what leads to economic colapse in important industries.

So a you believe that a policy that says you shouldn't run government deficits, somehow leads to government debt....

Um...

Also, Libretarians Conservatives generally want there to be less government so there will be MORE investment.

 



Kasz216 on 01 January 2012
HappySqurriel said:
Lostplanet22 said:
The financial markets are watching now the USA again because Obama requested to raise the debt ceiling for another 1,2 trillion $ because if nothing happens it is possible that they need to have an debate about raising the debt celing in november in the middle of the elections and well that worries the market.


The markets should be worried about the US not getting its deficit under control. Here's an anology of the raising the debt ceiling debate:

http://www.youtube.com/watch?feature=player_embedded&v=Li0no7O9zmE

 



I like this one better personally.  Not as informative though.

http://www.youtube.com/watch?v=EoS52fVtVQM