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Soros calls for Germany to 'lead or leave euro'

edited September 2012 in Not Sports Related
http://www.bbc.co.uk/news/19537693

I thought this was interesting but some of it was way out of context. What caught my eye was:

However, a return to the Deutschmark would make German-made goods more expensive overseas and within the eurozone which could hurt German exporters.

A real solution to that would be to downgrade the Deutschmark like the Swiss downgraded the Swiss-Franc and then trading and exporting would be a success. Unfortunatly, most of Europe provide more goods than what we do so the Germans would need to do that so the likes of Mercedes can keep selling their cars successfully.

My Uncle is half German and he went out there recently on a week's holiday, what amazed me was that he found out that the German banks were paying out no interest whatsoever. The reason being is that Germany is taking control of bailing out Greece, Italy and Portugal. I did not know whether to laugh or cry. The fact the German goverment wants to stablise the Euro and wants to save the Euro when the German people are constantly fed up of bailing out other Countries and want a return to the Deutschmark.

What made me laugh was a lot of Germans said to my Uncle that Great Britain made the right decision not to join the Euro. Thank goodness for that otherwise we would have been in worst state than what we are in now.

Comments

  • I know shit all about how banks are run, but I predict that within 20 years, the euro will be gone and everyone will return to their own currency........................................
  • 20 years...that long?
  • edited September 2012
    20 years? Currency will have been abolished by then. Robots will be doing the housework and we will all be driving flying cars that run on water. Nah. The Euro is too big to fail.
  • 20 years? Currency will have been abolished by then. Robots will be doing the housework and we will all be driving flying cars that run on water. Nah. The Euro is too big to fail.

    Hold on - weren't they predicting that in the 1950s and 60s?! ;-)
  • Soros doesn't believe that Germany has a choice. He's simply telling them to get real. They can't leave the euro and will not do so; to attempt to do so would be to make the aftermath of the Lehman failure look like a Teddy Bears's picnic.

    However, Germany's failure to publically support the ECB's recent initiative to invest in Government Bond markets in the periphery, ie the Bundesbank sniping from the bushes, is entirely counterproductive. Europe is a real mess, but the recession now in prospect might have been avoided if the blockheads in Berlin had behaved with a bit more intelligence and subtlety. That's Soros's message.
  • I predicted three hundred years ago paper cash wouldn't work. Look where we ended up. Germany's main boom time after the crash is because it's bailing out countries by buying bonds, which means they can buy German goods. Take the bail outs away, and Germans will see unemployment rise. Unfortunately it's hard to see where unemployment doesn't rise before infrastructure spending happens on a planned large scale. Supply side economics is bullshit as much as anything, when you only follow the same path no matter what the results.
  • Am i allowed to mention the war ?
  • edited September 2012
    Germany got its European empire on the cheap, with a lot of help from the Whore of Europe, France. Worthless paper money is much more affordable than tanks, aeroplanes, bombs and an extensive secret police force. The German Empire will remain intact for a while yet, as its constituent parts, Italy, Spain, Greece, Portugal in particular have nowhere else to go if they wish to retain any semblance of a comfortable and affluent, semi work free lifestyle for their populations
  • ColinTat said:

    I predicted three hundred years ago paper cash wouldn't work. Look where we ended up. Germany's main boom time after the crash is because it's bailing out countries by buying bonds, which means they can buy German goods. Take the bail outs away, and Germans will see unemployment rise. Unfortunately it's hard to see where unemployment doesn't rise before infrastructure spending happens on a planned large scale. Supply side economics is bullshit as much as anything, when you only follow the same path no matter what the results.

    The focus on supply side economics is entirely misguided. Even if it "works", it's a long process and likely to further damage aggregate demand in the short-term.

    You're right that what southern Europe needs is a boost to demand and this can only come from Governments; infrastructure spend is an obvious strategy because it can be argued that it benefits future generations.

    Mario Draghi crossed one Rubicon last week and now Europe needs to cross the next one. We need less austerity not more and that means bigger deficits in the near term. That applies to the UK too of course, though George Osborne is still trapped in the wrong paradigm and we probably need to see the back of him before we get a more appropriate policy emphasis here.
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  • Germany got its European empire on the cheap, with a lot of help from the Whore of Europe, France. Worthless paper money is much more affordable than tanks, aeroplanes, bombs and an extensive secret police force. The German Empire will remain intact for a while yet, as its constituent parts, Italy, Spain, Greece, Portugal in particular have nowhere else to go if they wish to retain any semblance of a comfortable and affluent, semi work free lifestyle for their populations

    They thought it was cheap with nice stable export markets like brand new trains to Greece and cars all over Europe but now they have to pay the price ... there are only two possible outcomes fragmentation or political / economic union...

    German bankers are afraid of writing a blank cheque via common eurobonds for deficit countries so all they can ask for is rules on banks and national deficits...it will be expensive but a lot,lot cheaper than splitting up.

    As MF states deflating is obviously wrong even if it suits some in Germany... the only way out is growth and inflation...to reduce the ratio of debt to GDP... and the sooner they print some money, the sooner youth unemployment will stop growing...

    Sooner or later they are all going to realise that structural reforms, raising retirement ages and selling off state assets is the only way forward - irony is that when you aggregate the whole of Europe it ain't a basket case BUT the problem is will richer countries agree to permanent subsidies to poorer regions? I think I heard that in the US the poorer states effectively get a 5% subsidy from richer parts
  • edited September 2012
    I just think this whole European ecomony is turning into a disaster. It's all very well focusing on saving the Euro but Countries like Greece (who should never have joined the Euro in the first place) are trapped inside an Economic prison and we are hearing stories of how the Greeks are struggling to cope with this mess. What they need to do is get back to their own currency, run their own ecomonies and devalue then eventually everything will be back to normal.

    When you try to save one Country, Europe gets lumbered financially and of course the Euro credit rating would decrease. It's obvious the real German people don't like it when their own goverments try to bail out other Countries because it is certainly not doing them any good. Banks don't pay out any interest and I bet there is loads of other related issues that is affected by this.

    The Euro should have originally been setup where you get Countries who are in the same league as each other like France, Austra, Germany and even us not Italy, Portugal, Spain and Greece. I would not want us to join the Euro because I want our own goverments to run our own ecomony and not the team from Brussels and I bet most other European's feel the same way about their own.
  • Totally agree that membership should not have extended to so many countries but we are here now... or more importantly Germany, France and Finland are here at a crossroads and cannot afford to let counties default and set up their own currencies since their banks have lent so much money to poor country government and banks... the only way out is to collectivise the risk and reduce interest rates for all ... especially small businesses that can create jobs...

    And I agree that disaster is possible - hopefully this is focussing people on solutions especially closing down the prison of youth unemployment
  • Spain,Ireland and Portugal are looking very carefully to see if/ when Greece drops out of the Euro, because it will then set a precedent and a mechanism for them to drop out and solve their own probs too.

    If you are looking to buy a house in Spain, i would suggest you hold on !
  • Spain,Ireland and Portugal are looking very carefully to see if/ when Greece drops out of the Euro, because it will then set a precedent and a mechanism for them to drop out and solve their own probs too.

    If you are looking to buy a house in Spain, i would suggest you hold on !

    I really do hope this happens but unfortunatly the EU will not want any Counrty at all to leave the Euro because their dream is to build a United States of Europe and maintain the European financial market.
  • Disco

    This thing you call "the EU". I'm just wondering... Is it actually a group of human beings? I suppose so because you say they have a dream. So where do they come from? France, Germany, Netherlands, where? Its just that, when British Eurosceptics say 'they' want to take away all our (British) powers, then presumably "they" want to take it away from the French, Germans, Dutch, etc, too. So who are 'they'?
  • So tell me, didn't Blair or Brown (or both) want us to join the euro at some point?
  • So predictable Kent, you never let me down ; )
  • So predictable Kent, you never let me down ; )

    Can't pass up an opportunity like that :)
  • Might be a good time to join now!!!!!!!!
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  • edited September 2012

    So tell me, didn't Blair or Brown (or both) want us to join the euro at some point?

    'When the time was right', I seem to recall. Hindsight is a wonderful thing, but aren't we lucky the time was never right? Good old Tony and Gordon keeping us out of trouble.

    Having said that, one of my friends who is an international businessman and describes his political views as 'just to the right of Genghis Khan' thought a few years back that Labour had made a mistake and we should have been in the Euro, so I'm not sure it's as simple as a Tory vs Labour argument. His reason was that, as an exporter to Europe his biggest unknown and something that could wipe out his profits at a stroke, was the various exchange rates for the differing currencies. Obviously having the same currency removes that risk and also takes away the costs involved in exchanging money.
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