Garbatellamike

You and me both and I think Ami makes 3!

amideislas

Well, you eventually run out of other people's money.

Garbatellamike

Well can't they just default on their debts too and then give you more?

amideislas

I suppose they can always print one of these. Might have a bit of trouble getting change.

bigglesworth

Actually that makes perfect sense for both Germany and Greece.

EMR

QE worked in the US, it worked in the UK there is no reason whay it will not have positive benefits in the Eurozone such as making Eurozone exports more attractive.
The problem is that the ECB is far too late in taking this step making the mountain it has to climb that much harder.
All now depends on the world economy if China and the US slow down then the driver Eurozone economies will not be able to support Greece.

amideislas

Eurozone growth prospects brighten slightly

It seems our saviour is Quantative Easing and Cheaper oil.

After all this time blundering around driving the Eurozone economy into further decline, I wonder where those miracles came from?

Garbatellamike

QE didn't work in Japan though and of course it is the last resort (i'e' a move of complete and utter desperation) and hence the ECB played the card when there were no other options left, you could argue at exactly the right time, with Syrzia coming along to try and destroy the Eurozone, I don't think the ECB's timing was an accident but rather just in time

EMR

Was the action by the US and the UK acts of complete and utter desperation or a proactive response to the global financial crisis.??
The lack of action by the ECB resulted in the Euro remaining overvalued for far too long but with the German paranoia about inflation who can be surprised.
The Eurozone is not under any genuine threat, I have heard this being said since it was created.
Some counties may well cut the apron strings if we do go into another deep recession not wanting to be hamstrung by an overvalued currency and German financial policies but we are a long way from that.

bigglesworth

In that old phrase I think we are living in interesting times. (Although I have never met a Chinese person who recognises it as a Chinese proverb)

InVinoVeritas

The only thing QE is guaranteed to achieve is to increase the debt. It can a windows of opportunity to kick start an economy and, if that works, this could then enable the debt to be paid down. In other words one more turn of the key and either it's a flat battery or the engine bursts into life and the battery hopefully gets recharged.

In the case of Europe it is easy to understand Germany's concern that not all member countries are in a position to kick start and several would just like to spend the money (as Greece has so ably demonstrated). Even if the risk of creating an indebted, insolvent nation is high, the danger of not getting re-elected is always worse for a politician, so I think Germany's concern here is very reasonable.

Finally, it wasn't very nice of Varoufakis to point out the other members of this particular club, now he has ruined the game for everyone.

Red Eric

I'll assume you haven't actually been reading my posts very closely given your summary assessment of what you think I've been saying - no point whatsoever in responding to that.

The above, however, does bear a little scrutiny for the tiniest grain of resemblance to my views. I do think that Tsipras and Varoufakis (and no doubt some of the others when we get to hear them) are excellent communicators with fresh ideas about how the debt should be managed and how the economy should be run. I prefer their approach to those who are content to see hundreds of thousands of people jobless and without access to any form of welfare and millions without access to healthcare (hands up the wonderful Eurogroup and the IMF).

This in no way implies forever "spending other peoples' money" but it does mean getting the economy back to a healthy state as a priority - one that needs to come above meeting impossible debt repayment schedules.

WHEN they have some active support from some of the other members of the Eurogroup (ie later this year when both Spain and Portugal to name just two, vote out their current governments in favour of something less unpalatably troika-flavoured) they will find other members of the group more willing to join their cause. The Italian and French ministers could definitely be persuaded to be more open given their current positions.

That will be when progress will start to be made. And IF there ever is a move towards full fiscal union, it might be traceable back to now.

amideislas

There is no such thing as a "temporary" policy. Especially in European politics, and especially under socialist rule.

When was the last VAT or income tax decrease in the Eurozone? It only increases. Europe's last competitive advantage - relatively low corporate taxes - are now under target, and it's likely it will only increase substantially though either political pressure, or as many are proposing, "tax harmonisation", which is just another word for "tax extortion", by eliminating any competition for tax revenue.

Syriza's aspirations to achieve economic stability are indeed the right sentiments. But idealism has never been sustainable.

EMR

There is no active and popular anti austerity movement in Portugal, in fact like Ireland Portugal is slowly emerging from the mess it got itself into.
The Portuguese are not known for their extreme views on just about anything except football.
The only party that is advocating radical change are the remnants of the old communist party.
As happened in the last election the incoming government will look very much like the one it replaced.
I would not look for any comparisons with Greece.

Spain I think is a much more interesting possibility because of the demands for regional autonomy and the historical and at times violent antipathy between the left and right.

InVinoVeritas

Trouble is fiscal union is Fools' Gold without political union.