Eurozone debt crisis

[Iron]

The BBC article says that:

'But Italy has the advantage of having most of its debt owed to its own people rather than external investors. This buys it more breathing room than, say, heavily-indebted Greece'.

I don't see how that's an advantage.

It's easier to tell Goldman Sachs that they're going to take a 50% haircut than your own people!

Jeff

[superfrank]

Maybe that's the thinking behind the BoE buying UK govt. debt, but it didn't work too well for Zimbabwe!

I assume that means the debt is in pensions fund etc.; same situation in Japan.

Everything will be Ok.

[Iron]

Why the latest eurozone bail-out is destined to fail within weeks - http://www.telegraph.co.uk/finance/comm ... weeks.html

[Iron]

From the Telegraph (http://www.telegraph.co.uk/finance/fina ... -live.html):

Italy’s labour minister Maurizio Sacconi has just warned that a rushed shake-up of the labour market – as demanded by the EU – risks setting off a fresh cycle of terrorism in the country.

This is not exaggeration. The Red Brigades-PCC assassinated Massimo D’Antonna in 1999 and Professor Marco Biagio in 2002 for spear-heading labour reforms.

Jeff

[Iron]

Greece debt crisis: referendum promised on EU deal- http://www.bbc.co.uk/news/world-europe-15526719

The British government could take a leaf out of their book...

Jeff

[superfrank]

An outbreak of democracy in Europe! whatever next?!

[Iron]

The referendum will only be held after the rescue package has been agreed with the EU. So the Greek government may have seen this as a negotating tactic rather than as an opportunity to empower their people!

BTW, from the way EUR/USD is steaming, I'd say the markets aren't impressed by this news!

Jeff

[Euler]

What an almightly mess this is turning out to be!

[superfrank]

Ultimately they have to go for Eurobonds or set the PIIGS free.

All these bailouts etc. are sold as solutions to appease the markets, and buy a few more months, but they don't address the real issue.

It's up to Germany now. Either there is a true United States of Europe, with wealth and debt shared, or not.

[Iron]

I wonder whether the referendum was designed to force Germany into making that choice (given that the alternatives for Greece are death by 1,000 cuts or a messy withdrawl from the euro).

And if there is a United States of Europe, it will be interesting to see who wears the trousers. Will it be Germany (because they hold the purse strings)? Or will it be 'one state, one vote' (in which case the PIIGS might decide they want Gordon Brown style 'austerity', with the Germany taxpayer picking up the tab for their 'investment')?

Jeff

PS The BBC have their priorities right. At 9:45 this morning, the GDP figures had been announced and the FTSE was in freefall. Their lead headline on the news website? 'Protesters urged to remove tents'.

[superfrank]

And if there is a United States of Europe, it will be interesting to see who wears the trousers. Will it be Germany (because they hold the purse strings)? Or will it be 'one state, one vote' (in which case the PIIGS might decide they want Gordon Brown style 'austerity', with the Germany taxpayer picking up the tab for their 'investment')?

That's what will worry the Germans because they naturally would want to control the purse strings.

The other problem is that even if the Germans do go for USE, some of the PIIGS may baulk at the idea for political reasons.

This could run for a few more years yet.

[Iron]

Germany warns Greece over rescue - http://www.bbc.co.uk/news/world-europe-15555449

[superfrank]

Designs for new drachma leaked
http://www.thepoke.co.uk/2011/09/29/des ... k-default/

[Euler]

Confidence vote underway in Greece! Will we wake up to red or green on Monday?

[Iron]

Papandreou has won the confidence vote and he's said he's not going to call an election, so I would guess red.

That said, the markets have been behaving weirdly lately, drifting when there's little to be cheerful about, so who knows?

Jeff

Confidence vote underway in Greece! Will we wake up to red or green on Monday?