Britain Out Of Europe?

[pongo]

bonkers

 

If you're confused by the concept that the eurozone will lend €150bn to the International Monetary Fund, so that the IMF can help bailout the eurozone, Paul Donovan of UBS has a handy explanation:

 

He told the Jeff Randall Live show this evening that:

 

It's like a warm-wash laundry cycle.

 

Reassuring, no?

 

The reason Europe needs to fire billions of eurozone across the Atlantic on a piece of elastic is that European law frowns on explicit bailouts. Lending the money to the IMF so that the IMF can lend it back, though, appears to be a handy loophole.

 

As Donovan put it, "it's not breaking the law", more like "cleverly" bending it.

[Lxxx]

bonkers

 

If you're confused by the concept that the eurozone will lend €150bn to the International Monetary Fund, so that the IMF can help bailout the eurozone, Paul Donovan of UBS has a handy explanation:

 

He told the Jeff Randall Live show this evening that:

 

It's like a warm-wash laundry cycle.

 

Reassuring, no?

 

The reason Europe needs to fire billions of eurozone across the Atlantic on a piece of elastic is that European law frowns on explicit bailouts. Lending the money to the IMF so that the IMF can lend it back, though, appears to be a handy loophole.

 

As Donovan put it, "it's not breaking the law", more like "cleverly" bending it.

 

It's quantitive easing by another name, same as when the Fed announced 'Operation Twist' which was quantitive easing without explicitly telling the markets they were printing more money. Smoke and mirrors but the result is the same, more debt on top of more debt, until the whole thing blows up.

[G_Kelly]

Quite a graph.

 

Maybe the reason the EU are still pally with us

[Lxxx]

Quite a graph.

 

Maybe the reason the EU are still pally with us

 

Once the focus us taken off the likes of Italy, Greece, Portugal etc... and people realise where the UK lies in relation to it's debt, then maybe some people will wake up to the sad, perilous state of affairs the UK is in.

[The Old Git]

The UK has some element of control over its own currency though, unlike in the "one size fits all" Euro countries.

[Lxxx]

The UK has some element of control over its own currency though, unlike in the "one size fits all" Euro countries.

 

With a debt to GDP ratio of nearly 1000% it's going to need more than a little control over one's own currency to get through the mess, especially as most of that debt is financial debt, and we're in the middle of a financial crisis.

[GD4ELI]

The Euro will fall apart by Xmas. 23rd Dec is my expected day ....

 

http://www.guardian.co.uk/business/2011/dec/20/debt-crisis-europe-news

 

You could be out by a few decades

[Cambon]

 

He should be careful what he wishes for. It would be the final nail in the UK coffin, as it would take decades to build up such markets - probably 20 to 30 years at the levels required, and in the meantime unemployment would hit the 6 million mark at the very least. There's no massive market for administrators, media studies merchants and estate agents out those ways. Those people have no intention of making the same mistakes and following the path most of the west has been going down for the last 30 years.

The EU accounts for 60% of uk exports. The rest of the world accounts for the other 40%. These markets have already been cultivated and now need expanding as rapidly as possible. By this time next year, the eurozone will either have fallen apart, or they will probably have kicked Greece out and devalued by about 20-30% (i.e. back to where the Euro started against the Pound, maybe lower). The uk can no longer afford to devalue and Europe will no longer be able to afford the 60% of our exports. So those 60/40 figures need to be turned around. Not donating to the IMF fund is the right thing to do. The sooner the Euro dies and we get past this, the better for all.

[P.K.]

Not donating to the IMF makes no difference really. You loan the IMF money, they loan it to someone else, you get the interest paid. The difference between giving it to the IMF rather than loaning it yourself is that the non-nationalist (hem hem) IMF can attach swingeing economic reforms as conditions for the loan i.e. it's not to the economic advantage of the donor economies. But with the Euro in a way it is.

 

Also I don't see the Euro dying while it's propped up by the three biggest economies in Europe to wit France, Germany and Italy. Mind you I do miss Berlusconi's gaffes though. The EU is a sadder place without him.

[Cambon]

I agree on Berlusconi, he was great entertainment.

 

But, Italy's economy is still in decline, as is France's now. Only Germany is not in decline, but without a massive gesture from them, and that would be very unpopular with the German people, the Euro is pretty much doomed.

[Lxxx]

The euro in it's present guise is doomed.... but don't underestimate the will of unelected, unrepresentative, empire-building bureaucrats who simply must have this EU project be a success if it's the last thing they do. I only hope the will of the people succeeds.

[P.K.]

Everyone's economy is pretty much in decline except for the likes of India, China and so forth. The downside of globalisation. This piece http://www.guardian....rozone-collapse by 'Danny' Blanchflower agrees with you and warns of an imminent Euro collapse unless the right action is taken to wit:

 

".In apocalyptic language, the OECD warned this week of the consequences of what it called a major negative event emerging from the euro area, by which it means a chaotic breakup of the euro. It recognised the possibility that the results could range from "relatively benign to highly devastating outcomes", which "would most likely send the OECD area as a whole into recession, with marked declines in activity in the United States and Japan … In view of the great uncertainty policy-makers now confront, they must be prepared to face the worst." The euro's collapse could come quickly."

 

The article is worth a read.

 

I view the IMF as a "carrot and stick" approach which, in theory at any rate, should result in stronger economies. But it may be too little too late.

[The Old Git]

Not donating to the IMF makes no difference really. You loan the IMF money, they loan it to someone else, you get the interest paid.

 

Does the UK have these billions lying around spare, ready to lend? I wouldn't be too sure getting my capital back, let alone interest, lending money to some of these Euro countries.

[Cambon]

Exactly! The uk would have to borrow the money to lend to IMF. If they don't get it back that is another £1000 per household lost. If they were going to do that I would suggest giving each household £1000 to spend on a European holiday in a southern Euroupean country.

[P.K.]

Does the UK have these billions lying around spare, ready to lend?

 

Apparently not!

 

I wonder if the IMF insures itself against toxic loans in an internationlal financial centre - like the City of London! It wouldn't surprise me if they did after all a higher rate of return reflects a higher risk and Greece looks v dodgy.