Fitch has downgraded Spanish debt and Germany is panicking. Will the Euro survive much longer?
http://www.guardian.co.uk/commentisfree … uro-crisis
The short answer is yes. The Euro is on the verge of collapsing. It's arguable which would be worse: an immediate, painful collapse or a delayed, excruciatingly painful collapse when the dollar goes the same way.
Let's hope the Euro fails - and soon. Rumour has it that 64% of Germans want to see a return to the D-mark, and I believe its the same in Greece.
If the collapse of the Euro means another nail in the coffin of globalisation, so much the better.
I think that the Eurocrats will do all in their power to ensure that does not happen - this would be the foundations of world capitalism beginning to crumble so I think the great power-houses will be sticking their finger firmly in the dam
I read the article, and others like it.. I do think that if countries are going to share the same monetary system, there must be rules on what they can do with it.. since it only takes a country or two to splurge and wreak havoc on the system.
That's been a recognised weakness of the Euro from day one, that you can't easily have monetary union without political union (which Europe does not have, or has only partially).
What is the effect on this on the USD?
Is it possible to have politically one Europe? I mean their own countries interests, I gathered from my Econ 101 class a long time ago that politics should go with economy? political economy should go hand in hand --
The USD is suffering a bit, but a lot of it is internal banking problems.
Your right, politics and economy are pretty reliant on each other to function properly. I suppose some countries in Europe would be for a centralized government that runs them all as a group (I guess it's similar to USA's President overlooking the states). But, I'm pretty sure that many European countries wouldn't want that either. I guess only time will tell.
ok, thanks origin
transport system is so good in Europe that boundaries and travelling is not a prob, nations have different culture and belief system though.
They have also Eurovisa which allows you to move from one country to another...
Does this mean it is really difficult to have one people one nations all over the world, Isnt the gloabalization thing is because of that concept?
The USD will gain value. They are talking bout parity..............1 EUR=1USD. To have a politically one Europe wont happen.
Despite everything, I think the countrys will remain on the EUR for years to come. It will be very hard to undo.
Hi Ben, when I went to Europe the value of euro to dollar is 1.3 to 1 USD, -- five years ago-- euro is 1.3
thanks for the insight
You might get the mainland original european 6 combining but not the new states and of course not the Uk! we are basically xenophobic!
xenophobia -- scared of foreigners? But I went to Wales already, Cardiff and travelled to london and Paris via the English tunnel,
it is expensive though in London,
yep youve got it! although i was thinking more of the definition of an unreasonable hatred of foreigners-except that there is no such thing as british- i live in a really multi cultural city and we are all brits- ok some of us might wear saris and speak english with a bit of an accent but the new generations coming through are obstinately english- think it is something to do with living on an island- which gets us neatly around to the original question - we didnt want the euro when it was good so with our profligate over spending it is a good job we didnt join it or our government would have spent all the EEC money as well
oh ok, I understand now, the English pound is always strong in the market anyway, if the joined the Euro then some years back, their money will be lesser in worth
The trouble with a single currency is that one size does not fit all, and now countries like Greece do not have mechanisms like devaluing their currency to kick start economic growth available to them.
I don't think that the British are particularly xenophobic, but I don't think that they want to ruled from Brussels either. Can you imagine people in the US wanting to be politically integrated with the countries of Latin America and sharing a common currency that is not the US dollar? Britain is an independent, sovereign nation and most Brits want it to stay that way.
The Euro hit a new 4 year low today after Spain on Friday, ECB warning on more losses and BP losing 15% of it's value hitting EU shares. Add to this China and Korea misses industrial production numbers overnight.
As far as devaluing currencies go check out my hubs on Estonia that turned itself around with tough austerity measures - it can be done.
The problem with BP is that if they go down or keep on hitting big problems, a lot of British pension funds etc hold a big raft of BP investment and they are also one of the biggest players on the FTSE. It will really not be good for the British economy if BP goes down the pan or is fatally holed below the waterline and start foundering misrably.
Lets hope so.
What I find intersting is the Billions the IMF seems to have ready to loan out to everyone. Where does that money come from... oh wait... they just print it.
When they just print money, then flood the markets with currency all attached to debt how can you expect a recovery? A recovery based on what?
I think Mikenv has summed it up neatly. As a Brit I could never understand the attraction of cobbling together diverse European countries whose very diversity is their charm,
25 leading economists have now predicted that the Euro will not last any longer than 5 years. Also Hungary is now indicating that it is expereincing a fiscal crisis similar to that of Greece.
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