[Closed] The Guardian and Labour. Out of Love with the Euro

Or a rate based on what your bank things it can get away with depending on market conditions (one of which would be base rates, but definitely not the only one)..?

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Is he praying?
I think he is.

can he not perv just with his eyes, without moving his head, like the rest of us?

If you have a mortgage in Europe, you generally pay fixed interest based on the rates that the banks are able to borrow at for term money which bear no resemblance to ECB rates.

TandemJeremy - Member
choron - thst may well be true but is nothing to do with the point. So lets say you have a mortgage in euros - do you pay a rate based on the ECB rate or a rate based upon what buying italian debt costs?

Thats the problem again. Up until recently the former. But now the latter. But you know that dont you?

so mcboo - the evidence that the euro is a failed experiment please

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wundred

Stoner - I said euro interest rates are low - mcboo said they are not so I pointed out the actual numbers of the ECB rates. You know - the rates the ECB charge if i want to borrow some euros

choron - thst may well be true but is nothing to do with the point. So lets say you have a mortgage in euros - do you pay a rate based on the ECB rate or a rate based upon what buying italian debt costs?

If I'd been thick enough to post either of these that would have been enough for me to button my lip. To deliver both on the same page of one thread would be enough to make me hide in my bedroom.

as for the guardian id say it was anti- tory rather than pro labour/lib dem/ green

im certain that under john major and ken clarke we'd have joined the euro,thank goodness for gordo(and his assistant at the time ed balls)-and his impossible tests - anyone know what his thoughts on it are?

TJ is right as long as there is a currency called the euro it hasnt failed, even if the eurozone is an economic wasteland

& even if they were out of the euro would the 2008 financial crisis have exposed the failings of the greek. irish,italian, portuguese etc economies? - yes
and as everyone points out they wouldve been able to devalue their way out of the crash
BUT, without fixing the underlying problems,

now greece and italy are being forced to reform broken tax systems, corrupt local government and crazy pensions (in theory)

hopefully the euro will come out of all this stronger and maybe even good enough to pass gordos tests

TJ is right as long as there is a currency called the euro it hasnt failed, even if the eurozone is an economic wasteland

+1

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[i]All bonds are created equal. For a while[/i]

Oh look, a graph...

Is that what it is? Anyone got any pie charts to help illustrate the point further?

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Lifer - Member

TJ is right as long as there is a currency called the euro it hasnt failed, even if the eurozone is an economic wasteland

+1

That could be the very definition of zealotry. Never mind the economic misery, as long as there is something stamped EUR, its a huge success.

It is starting to resemble Soviet Apparatchiks quoting tractor production figures, isn't it?

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I am still waiting for anyone to actually show that the euro has failed in any significant manner.

Seeing as I can still buy them, all the eurozone is still trading in them, there is no black market developing, there is no pressure on its value, there is no run on the banks. All seems to be running along quite happily to me.

Yes Greece and Italy have economic issues and the euro means they cannot devalue out of it. However that is not the same thing as the euro failing.

Ah ha.... from the horses mouth. It has failed as a 'single currency' although remains a 'working currency'.

Does that about sum it up?

it has not failed as a single currency - no one is trading using dollars in Greece or Italy. Euros are stil the only currency used in the eurozone

it has not failed by any rational understanding of the word "failed"

im not saying its necessarily a good thing that the euro carries on

although it would be devastating for the poorer countries if they were kicked out of the euro, the run on their banks would make matters far worse than they are now
unless there is a way of lettimg the euro go and prevent this (any suggestions)

and it was the financial crash that caused the devastation here not the euro

but i guess haterz gunna hate regardless!

TandemJeremy - Member

it has not failed by [s]any rational[/s] [b]my[/b] understanding of the word "failed"

FTFY

Not a view I agree with but it could be argued that the inflexibility of it across borders and the implementation (bringing Greece on board when they didn't actually meet the criteria) have caused it to fail in its objectives of being a useable, effective single currency.

YMMV.

why clubber? its exactly what it is - a "useable, effective single currency."

by any rational understanding of the word failed it has not done so.

I realise you struggle to see anything other than your own viewpoint as rational, TJ but give it a go. As I said, it's not a view I agree with but I can see how the case can be rationally made.

I'm not going to the effort of making a case for something I don't agree with.

clubber - its about the meaning of the word "failed"

It means it has alrady ceased to work - not "failing" or "under stress" but failed is what people keep claiming.

As the ~Euro is still in existence it has not failed. It remains the single currency for 17 countries

Interestingly, some IBs are now selling FX options in nominal Deutchmarks and Drachma. Still not outright failure, but we're getting very close indeed. Even the bond markets don't give an accurate impression of market sentiment: the ECB is making purchases on secondary markets to surpress yields for the PIIGS while the ISDA judgement on the Greek 'non-default' has rendered CDS possibly worthless.

Prove beyond any doubt that it hasn't failed. Also define "failed" in indisputable metrics that everyone (leave out the "rational" insults) would agree on. It's not a black/white issue therefore it can be argued either way. Some arguments are more convincing than others.

clubber - check the definition of the word "failed"

its easy to prove it has not - I can still go into a bank and buy euros, the currency is not under pressure, its still the only currency in 17 countries

something either exists or it does not. while the euro exists it cannot be said to have failed

Failed - Having undergone failure

Failure -
1. The condition or fact of not achieving the desired end or ends: the failure of an experiment.
2. One that fails: a failure at one's career.
3. The condition or fact of being insufficient or falling short: a crop failure.
4. A cessation of proper functioning or performance: a power failure.
5. Nonperformance of what is requested or expected; omission: failure to report a change of address.
6. The act or fact of failing to pass a course, test, or assignment.
7. A decline in strength or effectiveness.
8. The act or fact of becoming bankrupt or insolvent.

By my reckoning, you could argue 1, 3, 4, 5, 7 (and maybe 8 🙂 )

something either exists or it does not. while the euro exists it cannot be said to have failed

Exists does not equal has not failed.

So, I'll leave it there. Thanks for listening, you've been irrational. 🙂

TJ thinks the whole point of the Euro was just to exist. Doesnt matter whether it succeeded in it's stated aims of promoting Stability, Growth and Employment.

I do, I give up. He's a psycopath.

Let's try a little analogy here:

1) You drive your car to a garage.
2) You drive it home again.

Between item 1 and 2, some bloke tells you your car has failed. When the police stop you, can you get off by telling the policeman that no your car hasn't failed because it still exists and you can still drive it and TJ says so?

clubber - having [b]undergone[/b] failure

Past tense.

Mcboo - I have asked you to provide some evidence of this failure and you have not done so

aracer - if you can still drive the car it has not failed. A car that has failed cannot be driven

Its an eoither / or situation - either something has failed or it has not failed and as the euro can still be traded in it has not failed

I'd be amazed if the euro would be allowed to fail, from a political point of view. And of course the euroseptics here are focusing on the financial troubles of the union, when what they really want to see gone is the political union.

I only hope It all continues, so it can carry on annoying the hell out of you lot.

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fail 🙂

Right, I've read most of the last four pages and I want to say this loud and proud:

I'm with TJ.

Those of you prattling on about bond yields etc have lost touch with the experience of the general public. Commercial bank mortgage and savings rates are driven by Central bank lending rates* so the ECB rate is of much more significance to people and businesses in the here and now than the bond market.

The car analogy is a rubbish one. My car failed it's last MOT at the first attempt because my wing mirror was secured with gaffer tape. It was still a perfectly good fully functioning car.

*Hence my current mortgage interest rate of base rate + 0.75% = 1.25% 😀

El-bent - Member
I'd be amazed if the euro would be allowed to fail, from a political point of view. And of course the euroseptics here are focusing on the financial troubles of the union, when what they really want to see gone is the political union.

I only hope It all continues, so it can carry on annoying the hell out of you lot.

+1

Interesting, well this is ultimately what happens when a generation of children are raised playing monopoly.

Give it twenty years and we'll all be living in a post apocalypse first person obese strategy play along, dressed as wizard ninjas.

Oh the humanity.

mcboo:

TJ thinks the whole point of the Euro was just to exist. Doesnt matter whether it succeeded in it's stated aims of promoting Stability, Growth and Employment.

the current situation is multi-causal, you can't lay the blame for the mess we're only at the Euro's door.

And your logic is flawed. We don't have the Euro (FYI 😉 ) but we were/are one of the slowest European countries to see any sort of recovery. Therefore by your logic our 'not joining the Euro experiment' has failed. 😐

I blame the parents, it could be a dogs face next time.

aracer - if you can still drive the car it has not failed. A car that has failed cannot be driven

As I think I said in a thread the last time T€J & mcboo went head to head, it would be much safer for all around if they defined their approach to "fail"

for TJ, the euro is still a viable intra-national alternative for barter, so in the common or garden interpretation of a currency has "not failed".

On the other hand mcboo, who appreciates the wider relevance of currency, it's creation, trade and international functions (if you like: a technical understanding of currency) then it has failed, in that it has proven unable to calm the volatility in a diverse set of economies - it cannot perform the macro economic function of a currency for each user nation. That it continues to exist and be accepted for barter, means it has not failed in just that component of its function, but it has in many others.

BTW the principle cause of the state we're ( and by we I mean the UK, Europe, etc)in is best summed up by Minsky's Financial Instability Hypothesis, just in case you're wondering. It basically goes like this:

Stability makes people reckless. Borrowers (including governments) borrow to excess; lenders lend to excess. And then the resulting defaults cause a financial crisis.

Here endeth the lesson.

(For now...)