Bollitics - Ireland, the Euro and the future of the EU

[LondonLax]

You live in the Euro zone don't you Gringo? What are you doing with your savings?

Mostly investing them in fillies at newmarket.

My asset holdings are in property (market still looking at a 20% correction of 5 years stagflation ) and my only equity investments are in ozzie mining shares which could fall 30-50% when the commodity bubble pops, and so are looking for a new home.

So come on LL - I've shown you mine, fair's fair - what's your picks - where are your savings going?

Well the money I have is just sitting in a bank account earning less interest than the rate of inflation so I'm looking for suggestions but everything seems like it could be risky whilst the Greece issue is not sorted.

I'm interested if people in the Eurozone are worried that their currency will take a hit.

[CarewsEyebrowDesigner]

Ze Germans are angry!!

[Chindie]

I was reading an interesting comment piece in the Grauniad the other day, not got time to link at the moment unfortunately, from a pro-EU fellow who was saying that even he had begun to believe the EU as it is now is in it's death throws. He suspected it would return with some lessons learnt but in a far less sizeable iteration - most likely a 'Northern European Union'.

I must admit that even as someone who is roundly pro-EU, from my perspective the union now is looking it might be starting to lurch to it's grave if things go very wrong further, but I do think that the idea is far from it's deathbed and would return in some capacity soon enough. It could be good for it in all honesty, once the dust had settled.

[chrisp65]

I was reading an interesting comment piece in the Grauniad the other day, not got time to link at the moment unfortunately, from a pro-EU fellow who was saying that even he had begun to believe the EU as it is now is in it's death throws. He suspected it would return with some lessons learnt but in a far less sizeable iteration - most likely a 'Northern European Union'.

I must admit that even as someone who is roundly pro-EU, from my perspective the union now is looking it might be starting to lurch to it's grave if things go very wrong further, but I do think that the idea is far from it's deathbed and would return in some capacity soon enough. It could be good for it in all honesty, once the dust had settled.

some form of 'greater deutschmark' perhaps?

I've seen this idea mooted in a few places lately, and it had a good airing on a recent Newsnight. The downside to it could be that the Germans are currently benefitting from a relatively poor euro which makes their exports competitive. A return to a more valuable currency would see German exports priced out of many markets - not least the 'other' half of europe.

It's early days for the euro, long term it will work. but then long long term I think we are heading towards a United Stated of Europe anyway. Which will make the euro far easier to manage.

[Chindie]

I still don't think a USE would ever happen. Too many interests would be squashed and squeezed to let it happen, and too many differing thoughts pulling in too many differing directions for it ever to win out. The current version is effectively just built up of compromises, middle grounds and 'making it up as we go along' for precisely that reason.

The Germans wouldn't like it to begin with (indeed you have to suspect that part of the reason Germany has been quite so keen to be harsh with the likes of Ireland for example is partly down to the fact they know this kind of thing can make their bubble pop and they wan't to ensure people pay for risking that), but if the EU collapsed entirely they would perhaps quite keen to get back into a union with the likes of us, and France, etc (pretty much just excluding Southern and Eastern Europe), to have strong economies to sell to and buy from. Certainly we'd like it - we already trade more with the Eurozone than anywhere else - if it goes pop we'll feel the collapse.

[Gringo]

You live in the Euro zone don't you Gringo? What are you doing with your savings?

Mostly investing them in fillies at newmarket.

My asset holdings are in property (market still looking at a 20% correction of 5 years stagflation ) and my only equity investments are in ozzie mining shares which could fall 30-50% when the commodity bubble pops, and so are looking for a new home.

So come on LL - I've shown you mine, fair's fair - what's your picks - where are your savings going?

Well the money I have is just sitting in a bank account earning less interest than the rate of inflation so I'm looking for suggestions but everything seems like it could be risky whilst the Greece issue is not sorted.

I'm interested if people in the Eurozone are worried that their currency will take a hit.

Buy greek bonds - some of the hedge funds have been piling the stuff over the last couple of months in anticipation of the next bail out - could double your money if you time it right.

[Gringo]

I must admit that even as someone who is roundly pro-EU, from my perspective the union now is looking it might be starting to lurch to it's grave if things go very wrong further, but I do think that the idea is far from it's deathbed and would return in some capacity soon enough. I

The main lesson one can learn from the current EURO issues is that currency can not be unified if economies are not unified. Economies can not be unified without political unification. Which would seem to contradict this.

I still don't think a USE would ever happen. Too many interests would be squashed and squeezed to let it happen, and too many differing thoughts pulling in too many differing directions for it ever to win out. The current version is effectively just built up of compromises, middle grounds and 'making it up as we go along' for precisely that reason.

You either have unified political structures or different currencies - the middle ground, the compromises cannot work.

[Chindie]

I don't necessarily think a future union would go down a single currency route. I suspect many might like it to, but I also suspect that supposing the Euro did fail too many fingers would be burnt to quickly go into it again.

I currently think that any future version of the union would be smaller (taking fewer risks on 'emerging markets' than the EU of the late 90s decided to) and would perhaps return a little more to it's routes. I forget the exact term used for it, but it would be along the lines of 'seperate, but alike'. I think that middle ground can work, but only if the aim is a middle ground, and not a middle ground founded on a desire from some for a USE, some for a simply economic union, others for nothing at all, and so on.

[Gringo]

So it's a trading pact. Like it used to be?

[Chindie]

Pretty much.

I suspect it would end up looking a little like EFTA/the EEA does now, though more refined (you only need to hear Michelson speak on here to see the downside to that arrangement), and perhaps with slightly wider reach.

The worry of course would be, and I suspect you're trying to get at this point, that they'd just do what they already have again. You would hope that the lessons of last time would mean they both refrain from that and also learn that something approaching a constitution outlining what the union both can and cannot do were instituted from the word go.

[peterms]

Buy greek bonds - some of the hedge funds have been piling the stuff over the last couple of months in anticipation of the next bail out - could double your money if you time it right.

Now there's a proposal that sorts out the risk-takers from the rest.

[Gringo]

If you hedge it with the right CDSs you should be able to guarantee a proft either way - and if the ecb 'force' a rollover of debt you could end up winning on both bets.

[peterms]

It's early days for the euro, long term it will work. but then long long term I think we are heading towards a United Stated of Europe anyway. Which will make the euro far easier to manage.

Hard to see how a single currency can work without greater political union, so I suppose a USE would make the euro easier to manage.

However, the tide of opinion seems to be the other way. Apart from hostility to the european project from those with a strongly nationalistic viewpoint, there's been a trend towards regionalism in several places - pulling the other way from submerging identities in an enlarged superstate.

Much of the enthusiasm for the european project has been based on economic self-interest - the way the Irish economy was transformed, handouts from the cap to French farmers and Cameron's in-laws, inducements to states newly joining - but a lot of it seems to have been based on cooking the books to disguise the extent of difference between the economies concerned.

Without the handouts at the same level, and with a lot of anger at perceived mismanagement, and with a continuing interest in regional rather than national or supranational agendas, won't there be less not more support for a pan-european solution?

[peterms]

If you hedge it with the right CDSs you should be able to guarantee a proft either way - and if the ecb 'force' a rollover of debt you could end up winning on both bets.

Well, you said your investments are looking for a new home. Tell us how you get on. :winkold:

[snowychap]

Think it will deserve a graph to show us how it goes, too. :winkold:

[peterms]

Think it will deserve a graph to show us how it goes, too. :winkold:

And sound effects. Champagne corks flying, or muffled sobbing?

[JulieB]

I think one question that should be raised concerning Greece and Cyprus and to a lesser degree other Southern Meditarranean economies is:-

Who the hell at the EU was responsible for carrying out due diligence on their economies to let them into the Eurozone in the first place??!!

[Awol]

Who the hell at the EU was responsible for carrying out due diligence on their economies to let them into the Eurozone in the first place??!!

There was nothing wrong with the due diligence Julie, the EU simply ignored it for ideological reasons.

[CVByrne]

Who the hell at the EU was responsible for carrying out due diligence on their economies to let them into the Eurozone in the first place??!!

There was nothing wrong with the due diligence Julie, the EU simply ignored it for ideological reasons.

Not True, Greece paid Goldman Sachs to hide their level of borrowing. They needed to do this to meet the guidelines of the eurozone.

It's amazing to think these terribly badly run countries got into the Euro. At least Irelands problem is to do with gangsters in the banks and lax regulation. A common problem worldwide, not to do with widespread corruption at all levels of government like Greece.

I'm glad that we've taken it on the chin and are getting on with the solution to our problems, not out rioting in the streets like thugs. I'd be disgusted if scenes like that in Greece were taking place in Ireland. I'm kinda proud of my country and our response to our problems so far.

[Awol]

Not True, Greece paid Goldman Sachs to hide their level of borrowing. They needed to do this to meet the guidelines of the eurozone.

You don't really believe that no one was aware of this, do you?