Discussion in 'Economics' started by wilburbear, Dec 4, 2010.
It has to be tough to sell bailing out dead beat countries like Greece, Spain, etc to your voters. Even if it makes sense for Germany to hold the EU together, it may not be politically feasible.
I believe Germany would have never helped with any bailouts of these countries, but the issue that keeps them doing it is that German banks hold a lot of the debt of these countries. So taxpayers get stuck with the bill for more bailouts while the banks avoid the big losses from restructuring the debt, at least for now. Just like the US, they are trying to solve a debt problem with more debt, thus just kicking the can down the road. They should have already gone with the restructuring option.
German banks are irrelevant. Most of German economy is based on exports... and Germany is the country that has benefited the most from the single currency by expanding its export base.
I'm sure German voters are getting pissed of when they have to prop up people in Greece or Ireland who keep spending money they have and maney they owe as if there is no tomorrow...
But on the balance of things Germany is probably better off...
It's a currency union. Some members are going to do well, others not so much.
If Merkel is stupid enough to think all of them were going to export to outside the eurozone with the same success as Germany, she doesn't know crap about economics. If a country inside the eurozone is running a trade deficit and can't devalue their way out and the union has no mechanism for automatic fiscal transfers to lagging members, then the laggards are going to have a credit crisis. This is so obvious it's blinding.
I suppose I shouldn't be surprised; on the evidence, an entire continent seems to have no grasp of how basic economics works.
I'm also waiting for:
California to abandon the dollar
Scotland to abandon the pound
Hokkaido to abandon the yen
Referendum in Scotland originally planned for 2011 has been given up on by now. Not happening.
"she doesn't know crap about economics" sent merkel your contact info. ET brings out the best in people.
since I don't know the structure of Germany, I have a primitive question:
can the opposition party call a vote of non-confidence and overthrow the govt.? Here's the concern:
say Greece go belly up, her german banks total outstanding foreign bond is $212.6 billion as of Dec. 2010, some of those would be Greece govt. bond. Those bank would be out of those $$
Now her opposition party could jump in and say she engages in socialism, and the further concern is the other PIIGS nation would go belly up as well. So now she has her own people to answer to.
Under that circumstance, can they call a vote of non-confidence, or remove her from power or some sort of referendum action?
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