http://www.guardian.co.uk/world/2013/mar/28/slovenia-next-candidate-eurozone-bailout

This article says Slovenia. Then there's Malta and then Luxembourg.

Thank God Britain isn't in the Eurozone.

Population of 2 million and 6 billion pounds of bad debt ? That is bad !

The eu is a failure and the euro needs to be scraped ! It is doing more harm then good ,

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^{Given the numbers, Slovenia could be bailed out by a hedge fund or rich individual, who would make a killing as the yield on its bonds plummeted.}

^{Given the numbers, Slovenia could be bailed out by a hedge fund or rich individual, who would make a killing as the yield on its bonds plummeted.}

LRB,

you know that and i know that. but do you think a journàsslist or a reader of the British financial rainbow press, e.g. Guardian or any anglo paper that starts with "Daily" knows what you are talking about?

Italy, though they will call it something else like Spain did.

The little countries, which make up about half the Eurozone, are largely irrelevant.

What matters is if one of the big economies goes down. Italy is wobbly, so is Spain. And France is none too confident.

BUMP

From today's Daily Telegraph :

http://www.telegraph.co.uk/finance/financialcrisis/10039329/German-euro-founder-calls-for-catastrophic-currency-to-be-broken-up.html

Oskar Lafontaine, the German finance minister who launched the euro, has called for a break-up of the single currency to let southern Europe recover, warning that the current course is "leading to disaster".

He calls it a 'catastrophic currency'. It is for Germany, as Germany pays the major share of the bailouts, directly or indirectly.

He calls it a 'catastrophic currency'. It is for Germany, as Germany pays the major share of the bailouts, directly or indirectly.

Sorry, but to my mind Germany is the only nation to really benefit from the Euro.

They are not living high on the hog, but then no one is these days. By being in the Euro the Germans have had a lower-value currency than they would have had if they had kept the Deutsch Mark. Thus their exports have continued at a high level, with excellent quality married to a currency that most of their markets share. Without German participation the Euro would look like the Weimar Republic's Mark - where the only high-selling items were wheel-barrows (to carry the damn stuff around). Germany has effectively devalued her currency against other world currencies, without suffering the costs of high-priced imports, as many imports have come from within the Eurozone.

Damn sneaky, these kartoffel-topfs.

I don't really see what currencies have to do with anything. At the end of the day, money is just an exchange particle between buyers and sellers. The problems don't relate to the currency, but to the inability to service debt.

SC

I don't really see what currencies have to do with anything. At the end of the day, money is just an exchange particle between buyers and sellers. The problems don't relate to the currency, but to the inability to service debt.

SC

An inability to produce saleable goods at a decent price you might say.

In the UK now a job at Tesco is considered to have the most security.

"Where is my plane ticket?" ask the majority of voters.....

I don't really see what currencies have to do with anything. At the end of the day, money is just an exchange particle between buyers and sellers. The problems don't relate to the currency, but to the inability to service debt.

SC

Currencies are very much involved. If you have a joint currency for several countries, those who incur high debts which they can't service are dragging down those who work hard and keep solvent. If they have separate currencies, those who suffer are the country which incurs the debt (fair), and those who were greedy enough to lend that country money (serve them right).

I don't really see what currencies have to do with anything. At the end of the day, money is just an exchange particle between buyers and sellers. The problems don't relate to the currency, but to the inability to service debt.

SC

Currencies are very much involved. If you have a joint currency for several countries, those who incur high debts which they can't service are dragging down those who work hard and keep solvent. If they have separate currencies, those who suffer are the country which incurs the debt (fair), and those who were greedy enough to lend that country money (serve them right).

Whether you default on your debt be debasing your currency, or simply be refusing to pay, the result is the same for the lender.

Banks on Verge of Collapse in Denmark Win Time in FSA Review

http://www.bloomberg.com/news/2013-05-13/banks-on-verge-of-collapse-in-denmark-win-time-as-fsa-steps-back.html

I don't really see what currencies have to do with anything. At the end of the day, money is just an exchange particle between buyers and sellers. The problems don't relate to the currency, but to the inability to service debt.

SC

Currencies are very much involved. If you have a joint currency for several countries, those who incur high debts which they can't service are dragging down those who work hard and keep solvent. If they have separate currencies, those who suffer are the country which incurs the debt (fair), and those who were greedy enough to lend that country money (serve them right).

Whether you default on your debt be debasing your currency, or simply be refusing to pay, the result is the same for the lender.

If you have your own currency and borrow from an outside lender in your currency, then if you devalue your currency during the servicing of that loan, then the lender will lose a certain amount of value, compared to his own currency, but will still recover the whole loan, plus agreed interest, in your own currency. This may be a loss to the lender or not, depending on how he has hedged the loan, but he will still recover a great deal of the loan.

If, on the other hand, you form a part of a shared currency and borrow from an outside lender based upon the value of this joint currency, then you will probably be lent the money at generous interest rates, due to the percieved stability of that currency. If you do not then repay the loan on the agreed terms the lender loses the entire value of the outstanding debt. Other lenders will then reassess the value of that currency and add a greater risk multiplier to their interest calculations, thus penalising all users of that joint currency. This has been applied selectively in the case of the EUro, as Germany is seen as a good risk, along with her Northern neighbours, while the Southern holders of the Euro are punished with high rates.

Incidentally, Germany's export figures show that she is concentrating more on markets outside the EU now, probably because she has already got all the cash available from within the Eurozone and other EU members. Conquest by market forces - more effective, and far more subtle, than the Wehrmacht.

Banks on Verge of Collapse in Denmark Win Time in FSA Review

http://www.bloomberg.com/news/2013-05-13/banks-on-verge-of-collapse-in-denmark-win-time-as-fsa-steps-back.html

Denmark is not actually in the EZ. Like the UK, it has special opt-out status.

That said, whatever goes wrong with Danish banks is obviously not going to do the EZ much good.

I don't really see what currencies have to do with anything. At the end of the day, money is just an exchange particle between buyers and sellers. The problems don't relate to the currency, but to the inability to service debt.

SC

Currencies are very much involved. If you have a joint currency for several countries, those who incur high debts which they can't service are dragging down those who work hard and keep solvent. If they have separate currencies, those who suffer are the country which incurs the debt (fair), and those who were greedy enough to lend that country money (serve them right).

Whether you default on your debt be debasing your currency, or simply be refusing to pay, the result is the same for the lender.

If you have your own currency and borrow from an outside lender in your currency, then if you devalue your currency during the servicing of that loan, then the lender will lose a certain amount of value, compared to his own currency, but will still recover the whole loan, plus agreed interest, in your own currency. This may be a loss to the lender or not, depending on how he has hedged the loan, but he will still recover a great deal of the loan.

If, on the other hand, you form a part of a shared currency and borrow from an outside lender based upon the value of this joint currency, then you will probably be lent the money at generous interest rates, due to the percieved stability of that currency. If you do not then repay the loan on the agreed terms the lender loses the entire value of the outstanding debt. Other lenders will then reassess the value of that currency and add a greater risk multiplier to their interest calculations, thus penalising all users of that joint currency. This has been applied selectively in the case of the EUro, as Germany is seen as a good risk, along with her Northern neighbours, while the Southern holders of the Euro are punished with high rates.

Incidentally, Germany's export figures show that she is concentrating more on markets outside the EU now, probably because she has already got all the cash available from within the Eurozone and other EU members. Conquest by market forces - more effective, and far more subtle, than the Wehrmacht.

I've always used a shared currency. Whenever I've gone to the banks and suggested using my own, they have phoned for the men in white coats. I don't see why governments should be allowed more leniency than I am allowed.

SC

I've always used a shared currency. Whenever I've gone to the banks and suggested using my own, they have phoned for the men in white coats. I don't see why governments should be allowed more leniency than I am allowed.

SC

I used to share a currency with another nation. It was very confusing in England to have a pocketful of Bank of Scotland and Royal Bank of Scotland pound notes, especially when many shopkeepers would either refuse to accept them or offer only 19 shillings on the pound. At least in England the notes were backed by a State institution, not a dodgy public company.

On the other hand, in Hong Kong, one only had the choice between two publicly owned banks. Although I knew a pub in Kowloon that gave you a free pint if you bought another pint with SC notes, rather than HSBC paper. Well worth the extra travel after rugby training.

I've always used a shared currency. Whenever I've gone to the banks and suggested using my own, they have phoned for the men in white coats. I don't see why governments should be allowed more leniency than I am allowed.

SC

I used to share a currency with another nation. It was very confusing in England to have a pocketful of Bank of Scotland and Royal Bank of Scotland pound notes, especially when many shopkeepers would either refuse to accept them or offer only 19 shillings on the pound. At least in England the notes were backed by a State institution, not a dodgy public company.

On the other hand, in Hong Kong, one only had the choice between two publicly owned banks. Although I knew a pub in Kowloon that gave you a free pint if you bought another pint with SC notes, rather than HSBC paper. Well worth the extra travel after rugby training.

I think you'll find that, like Hong Kong notes, Scottish notes are backed by currency reserves. In the HK case, US dollars, and in the Scottish case, deposits with the Bank of England.

SC

But a Scotsman sold off all England's gold at bargain prices. England has no reserves left now to support the Scottish banknotes.

Why did everyone go off the gold standard? It was a way of demonstrating that each banknote had a genuine reserve behind it, like the American notes, which were headed 'Silver Certificate'. The disastrous financial position in 2008 and lasting until now is basically because banks no longer had to hold tangible assets to match the issuance of 'money' as previously.

This led to the 'notional' holdings that were backed only by more 'notional' reserves, which were backed by other institutions holdings of 'notional' reserves, in turn supported by the nation's 'notional' reserves, based upon the tax returns of these same bankers and their paper dealings. Not like the days of Harold 'SuperMac' McMillan, when everyone had cash in their pockets and no worries.

On the other hand, in Hong Kong, one only had the choice between two publicly owned banks. Although I knew a pub in Kowloon that gave you a free pint if you bought another pint with SC notes, rather than HSBC paper. Well worth the extra travel after rugby training.

Your pub-owner was on a fairly good gimmick; Chartered Bank notes were few and far between. There even used to be notes on the Mercantile Bank. But they were all worth the same.

Hong Kong of course has no gold reserves (and never has had).... and has one of the soundest currencies on the planet.

On the other hand, in Hong Kong, one only had the choice between two publicly owned banks. Although I knew a pub in Kowloon that gave you a free pint if you bought another pint with SC notes, rather than HSBC paper. Well worth the extra travel after rugby training.

Your pub-owner was on a fairly good gimmick; Chartered Bank notes were few and far between. There even used to be notes on the Mercantile Bank. But they were all worth the same.

Hong Kong of course has no gold reserves (and never has had).... and has one of the soundest currencies on the planet.

Not really that sound. It's tied to the US dollar, and the notes are 100% backed by US dollar reserves..

On the other hand, in Hong Kong, one only had the choice between two publicly owned banks. Although I knew a pub in Kowloon that gave you a free pint if you bought another pint with SC notes, rather than HSBC paper. Well worth the extra travel after rugby training.

Your pub-owner was on a fairly good gimmick; Chartered Bank notes were few and far between. There even used to be notes on the Mercantile Bank. But they were all worth the same.

Hong Kong of course has no gold reserves (and never has had).... and has one of the soundest currencies on the planet.

Not really that sound. It's tied to the US dollar, and the notes are 100% backed by US dollar reserves..

I wonder whether they still are? Hong Kong also has no debts.

On the other hand, in Hong Kong, one only had the choice between two publicly owned banks. Although I knew a pub in Kowloon that gave you a free pint if you bought another pint with SC notes, rather than HSBC paper. Well worth the extra travel after rugby training.

Your pub-owner was on a fairly good gimmick; Chartered Bank notes were few and far between. There even used to be notes on the Mercantile Bank. But they were all worth the same.

Hong Kong of course has no gold reserves (and never has had).... and has one of the soundest currencies on the planet.

Not really that sound. It's tied to the US dollar, and the notes are 100% backed by US dollar reserves..

I wonder whether they still are? Hong Kong also has no debts.

According to wikipedia that is still the case.

Hong Kong has large government reserves, of which the monetary authority reserves are a part, and also the HK$ 30 billion profits from the speculation during the 1997 currency crisis (again: source wikipedia, so you may wish to add seasoning)

SC.

When I was working in Hong Kong we had the crisis caused by the HK Gov't freezing all spending in order to have funds to build the new airport. That dried up all other construction works and thus we had to get rid of all expensive ex-pat staff - other companies, such as Paul-Y were bidding for jobs at less than our costs. This was also the time of Maggie T's agreement to hand back the entire colony to China, thus panic in the Chinese community as well.

At that time you could not have called the HK$ 'strong', and it slid against the US$. But it didn't collapse, as it was not perceived to be in mortal danger. People had confidence in the currency, without any solid proof being needed.

Nowadays, after the financial collapse in the late 2000's, people do not have the same faith in any major currency and therefore some physical proof of stability, such as gold, would be useful. The way the US and UK, plus the Euro, have been printing bits of linen, paper and plastic by the billions in order to pay their debts, without any physical wealth to support such action, has devalued the whole idea of currency. I feel this is dishonest and if our financial leaders are so dishonest, what hope is there for future financial stability? I believe that speculation on a country's currency, and thus it's whole social stability, will become a standard feature of the future - and the big currencies are the better target.

And back to bail-outs :

France has been ignoring its problems, now the chickens are coming home to roost

http://www.telegraph.co.uk/finance/comment/rogerbootle/10067698/France-has-been-ignoring-its-problems-now-the-chickens-are-coming-home-to-roost.html

This is a 'comment' article, thus one person's opinion.

Here's some interesting figures :

Since the euro was formed in 1999, German unit labour costs have risen by only 10pc. At the peak, Greek, Irish and Spanish costs were up by 62pc, 53pc and 43pc respectively. But these countries have since managed to reduce their unit costs so that the equivalent figures are now 41pc, 30pc and 28pc. Meanwhile, French costs have continued to rise. They are now up by about 30pc since 1999, putting France in the same position as Spain and Ireland.

What’s more, France’s share of world exports stands at about a half of what it was when the euro was formed. And export prospects don’t look good, not least because France is heavily dependent upon the weak peripheral economies, which take about 20pc of her exports, compared with only 13pc of Germany’s. Admittedly, the employment picture is not as bad as in Spain or Greece. But it is still pretty terrible. The unemployment rate is 11pc, compared with 5.4pc in Germany. Over the past two years, the UK has created more than 400,000 jobs, while France has created fewer than 90,000.

These sort of figures are also quoted in the Economist and other reputable magazines and newspapers fairly often these days, but must be taken into account when looking at the positions Britain should take. Currently 40% of our exports are directed to rhe EU countries, down from >50% five years ago. This is good, but we must reduce our dependence on Europe further, as this is becoming a saturated market and may soon become a failed market.

We cannot rely on Europe to recover, when it is still deeply mired in economic depression. We should concentrate more on outside markets, such as the US, China, commonwealth countries, South America, Russia and so on. These are either stable or expanding markets and would welcome UK trade increase.