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Post by mcnoch on Oct 5, 2012 9:20:56 GMT -5
I think there is no need to break up the Euro anymore. Spain will be under control soon, look to Ireland and Island which had very similar problems. Italy is on a very good way too.
Greek will continue to be a problem, because the rest of Europe misunderstood for a very long time completely that Greek is more or less a failed state that has to be rebuild from scratch. So maybe, yes, Greek has to be taken out of the Euro as a financial-sovereign nation and but under conservatorship, defaulting more or less all bonds. But we have now the instruments in place to do this. They were not in place before because it was seen - with right - as an unpopular topic which would ignite a lot of emotions, as it did now.
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Post by Swampy on Oct 5, 2012 9:23:06 GMT -5
If Spain and Italy and Ireland get their acts together, Greece will not be a problem, but Spain and the other two are NOT getting their acts together.
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Post by mcnoch on Oct 5, 2012 9:32:37 GMT -5
On what do you base your interpretation that they are not getting their acts together? Spain, Italy, Ireland and Portugal have implemented a great number of important changes in their legal and economic systems. It was not the complete wish list of some analysts, but most economical experts here in Europe are satisfied.
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Post by Swampy on Oct 5, 2012 9:41:37 GMT -5
I hope I'm wrong, but I base my analysis on the constant news reports of them continually asking for handouts. As for their reforms, I hope they'll get rid of their famous labor-market rigidities.
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Post by mcnoch on Oct 5, 2012 13:33:21 GMT -5
The constant news reports show only one thing, that Spain has not yet asked for ESM support. There is a big debate over that point as Spain doesn't need the money and protection but some Spanish banks. At the moment it would be that the ESM would give Spain the money to lend it to the banks, but the Spanish government doesn’t want this as this means the EU starts to get involved into their budget process. So they want the ESM to lend the money directly to the banks and let the new EU bank supervision organization take charge of the troubled banks.
Ireland gets money on the market via bonds for normal tariffs between 1,8 % and 0,7 % for three months with a demand for the bond that was three-times higher than the offer. Italy still gets money from the bond-market, with a similar rate of 2,75 % for six months. That is higher as before but still manageable.
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