Why Do You Even Drink?

[chiang mai]

Ireland says it doesn't need a bail-out but the markets say it does, the EU tends to agree and fears contagion. So, how will all this unfold, my guess is that Ireland takes the bail-out, RBS takes a big hit on its loan portfolio to the Irish housing market, the British taxpayer takes an even bigger hit as a result of the combined effect of RBS and the EU bail-out costs and the Pound falls, anyone?

[H2oDunc]

I for one am hoping that the house of this big con is slowly falling apart. Ireland is the next casualty followed by Portugal and Spain. lets hope it sees the end of this gravy train of corruption once and for all. I will never for the life of me understand how successive British governments have lied and conned the people, handed over 80% of power to an unelected EU and all without actually giving the people one say on the matter. The second biggest con trick in the world after global warming.

[mitsubishi]

Hey Dunc!

I hear you on that, I think they basically are in the pocket of big corporations who pull their strings and dance to their tune.

They have no loyalty to nation or people, only themselves in power and that's it. The pyramid is teetering...

[chiang mai]

I for one am hoping that the house of this big con is slowly falling apart. Ireland is the next casualty followed by Portugal and Spain. lets hope it sees the end of this gravy train of corruption once and for all. I will never for the life of me understand how successive British governments have lied and conned the people, handed over 80% of power to an unelected EU and all without actually giving the people one say on the matter. The second biggest con trick in the world after global warming.

Hmm, I agree with the sentiment but I'm not sure how good all of that would really be in practise given the UK's trade links with Europe and the European debt held by UK banks, if the EU collapses there's a direct negative impact on the UK economy as a result and right now is not the time for the UK to suffer that kind of shock - having said that, the longer term picture that presents is quite appealing.

[H2oDunc]

Why would the collapse of this undemocratic monster make trade difficult or more expensive. We would be saving around 48 million pounds a day by not being a member which would offset any tariff increases.

Just exactly do we actually get from being a member ?

I can't think of any major benefit we get that would be not worth losing ?

How can they carry on regardless when for the 16th year running the auditors have again refused to sign off the accounts due to the blatant fraud and corruption.

?

Whilst the country is in the state it is thanks to 13 years of Brown at the helm the first thing that should have been considered was withdrawal but was never even considered.

The other thing that gets my back up is the pantomime we go through after each demand for extra cash or the introduction of new laws.

First we have the outrage from the PM and he is on the TV and everywhere telling us how he isn't going to stand for it.

He then hops over to Brussels where he kisses butt with Merkel, Sarkosy and the other and surrenders even more power or cash to them.

He then comes back and tells us that the EU wanted more but he got them to settle for less and we can thank our lucky stars we have him in power etc etc etc.

After the Lisbon treaty was signed the EU have all the power they need now. This talk of having a referendum if they ask for more is horseshit. Like the new law they want to introduce which will stop any more transfer of power. The wording as usual makes the whole thing a joke. Like the last time the people were promised a vote. It only takes an MEP to say that it isn't really that important and hey what do you know no vote.

You only have to look at the times that people were given a vote. Every one has voted no but they just ignore the wishes of the people and its business as usual.

Fingers crossed that Ireland, Portugal and Spain will bring an end to this for good.

[mitsubishi]

Here here.

The EU(SSR)s day is done.

They set out to try become the 'USA' economy of Euroland and look how it's turned out!

I'll drink to the day it falls.

Switzerland and Norway have been doing fine stood alone from the monstrosity of Brussels. Enough is enough.

[chiang mai]

This is really not a discussion about whether the UK's membership of the EU, or the EU itself, is a good or a bad thing, I think we've already agreed that many UK citizens would prefer that the UK is not a member of the EU. But since the claim was made about the cost of membership it might be useful to take a look at the attached link to set the record straight since the true cost is nowhere near that stated thus far:

http://www.jcm.org.uk/blog/2009/05/ukips-britain-paying-the-eu-40-million-a-day-claim-vs-the-real-costs-of-uk-eu-membership/

Now, back on topic!

It could be nice to think that the Euro might simply disappear overnight and each country would revert to their original currency and there would be no impact. Unfortunately life tends to be a bit more complicated than that. Take the case of Ireland for example, RBS is currently on the hook to Ireland for many billions, whilst Ireland remains a member of the EU the responsibility for any resulting losses by Ireland are borne by the collective EU and a range of support/bail out funds that exist within it, if the EU is no more then the UK, RBS, bears the total cost alone. I cannot begin to imagine how many other similar cases exist at different levels as a result of deals already done and financially the UK is very close to the heart of matters. So be careful what you wish for!

The real point of the original question was to try and anticipate what may happen as a result of the EU domino's falling and the impact on the UK and Sterling, I would find related thoughts potentially interesting.

[cloudhopper]

My prediction:

Near-term: The first of the PIIGS to default and revert to their own sovereign currency will gain the most and will be followed in rapid succession by the others. The Germans will not be sad to see them go. The banks exposed to their debt will be toast. The ECB and then the Fed will get involved but will ultimately be unable to stop a global deflationary collapse or a currency crisis. Any prospect for a single global currency will evaporate as the lessons of the Euro disaster comes home. Governments will worsen things via increasing capital and trade controls and military-industrial tensions will escalate as commodities are hoarded. Complex systems will be the most vulnerable and increasing failures in finance and supply chains of food and energy will be experienced globally along with the resulting social unrest.

Long term (after we're all dead): The most self-sufficient (individuals, communities and states) will have the greatest survival rates in the next Darwinian epoch that will not feature cheap liquid fuels in abundance.

[chiang mai]

Put another way, the UK and Sterling have far more to loose through Ireland's collapse and the failure of the Euro than Ireland does!

[Chunky1]

the bigger question is who is going to bailout portugal, spain, italy, uk, usa and probably japan.

[chiang mai]

Never let it be said that Thai Visa members are focussed!

[chiang mai]

Case in point, UK banks have £140 billion exposure to Ireland:

http://www.telegraph.co.uk/news/worldnews/europe/ireland/8141618/British-banks-have-140-billion-exposure-to-Irelands-economic-crisis.html

[mommysboy]

Case in point, UK banks have £140 billion exposure to Ireland:

http://www.telegraph...mic-crisis.html

One can be over focused too ( CM) - all industrialised nations are both interwoven and 'in-ter-cart'. From day to day, week to week the media may wish to focus on this country versus that one, but they mostly are in the same position, there is no passing the parcel, it will always come back round.

[neil324]

What's the chance of Ireland paying back the bailout, Greece back on the edge already, Portugal not far off, what happens when Spain hits the wall, they going to bail out them, LOL

At some point someone will be taking a haircut, that will include UK banks,all they are doing is kicking the can down the road and hoping,UK housing ready to topple again, which means more haircuts for UK banks. Morale hazard has been removed, there is no risk, you fuc_k up no problem johnny tax payer will bail you out. Well at some point it's going to pop.

I suspect in a few years the Euro will continue with many of the PIIGS going it alone.

[chiang mai]

Case in point, UK banks have £140 billion exposure to Ireland:

http://www.telegraph...mic-crisis.html

One can be over focused too ( CM) - all industrialised nations are both interwoven and 'in-ter-cart'. From day to day, week to week the media may wish to focus on this country versus that one, but they mostly are in the same position, there is no passing the parcel, it will always come back round.

Yes I appreciate those things and that really is the point, because the banks are all entwined, wishing for failure of the EU, parts of it or its currency is a very dangerous wish.

[cloudhopper]

What's the chance of Ireland paying back the bailout,

Here's one answer - http://globaleconomicanalysis.blogspot.com/2010/11/hoorayecb-saves-eurozone-2nd-timeallied.html

[chiang mai]

The issue of being "too big to fail" is at the heart of all of this and it looks like the ECB at least is about to say, being to big is a subjective term, maybe too big for you but not for us - it has to happen sooner or later so let's get on with it I say:

http://www.telegraph.co.uk/finance/financetopics/financialcrisis/8144558/European-Central-Bank-tightens-screw-on-Ireland-Portugal-and-Spain.html

I suspect this is all a bit like the patient's worry before the operation, just have the op and then you can start to recover and feel better, there again, I suppose the patient could die mid op!

[neil324]

King's credibility crumbles

http://blogs.wsj.com/source/2010/11/16/kings-credibility-crumbles/

Not Ireland, not sure if this would be negative for Sterling anyway but next year there will be massive pressure on the BOE.

[mitsubishi]

Case in point, UK banks have £140 billion exposure to Ireland:

http://www.telegraph...mic-crisis.html

One can be over focused too ( CM) - all industrialised nations are both interwoven and 'in-ter-cart'. From day to day, week to week the media may wish to focus on this country versus that one, but they mostly are in the same position, there is no passing the parcel, it will always come back round.

Yes I appreciate those things and that really is the point, because the banks are all entwined, wishing for failure of the EU, parts of it or its currency is a very dangerous wish.

Yes but it's a necessary one!

The banks have been walking this path ever since they ditched the gold standard.

If you want to make an omlette...

[chiang mai]

Before you destroy one thing you need to have thought through what will replace it, then you can think about how that process of replacement is going to work. All I hear thus far is that the EU and the Euro are bad so get rid of them and make breakfast, I'm not sure all of that is very smart at all!