Should EU cut the PIGS loose?

[P.O.D.]

The taxpayers of Europe are unwittingly showering banks with unprecedented wealth, thanks to weak-minded politicians who are ill-equipped academically and intellectually to reject the brazen demands. The End Game is European Federation, even if it floors the population of Europe, especially the income earners.

In the streets of Madrid, there is a carnival atmosphere.
This is Spain's time to "try it on". 
Greece, Ireland and Portugal have all had their debts expunged. 
Now its Spain's turn, after which they will default, safe in the knowledge that they will never be able to repay any proposed bailout.

In Spain they sense EU weakness.
The EU needs Spain more than Spain needs EU; they believe.
And Spain and other countries with economies historically surviving on agriculture and tourism, sense this is the moment to extract their gravy from the EU train.

They say Spain is too big to fail.
I say no. Let Spain honour its debts or face the consequences.

We have been screwed by banks under the pretext of sub-prime and a Scottish PM.
Surely we have learnt that lesson? If we had said no, life would have continued and the banks would have been reigned-in. These excesses would have been curtailed.

[Blaze]

To answer your question, yes they should and they will. Despite the Greek 'bailout' one year ago, they are now coming back for second round because the debt + interests is simply too big for them to service. Next year will be third round etc...

When Greek defaults (latest 2-3 years from now) it will be automatically kicked out of euro. The bad thing is every bank in Greece will instantly go bust. The banks will be nationalised and the government will block withdrawals from Greek banks. That means ordinary people will be left without cash.

They will take back their old currency and let it devalue at least 50 per cent. Before this they have already converted their debts into the national currency so half of the debt will conveniently disappear. Portugal and Ireland are soon to follow.

This is just the beginning. Germany, France, Britain and Spain will have to recapitalize or nationalise their biggest banks. The smaller ones they can probably let collapse. The ECB will go bust after being highly exposed to Greek government debt (and other PIGS).

Followed by a banking crises that makes 2008 look like a walk in the park. 

[I think]

it is more likely that Germany will leave the Euro and let the PIGS sort it out for themselves.

[scarbowl]

And that itself is quite unlikely.

[wrong]

Question is should the PIGS let the euro go. All these countries need to restucture they're debt and would benefit from a devalued currency..Only reason Germany and the others are keeping this together is because they're banking systems have huge exposure..

[Dr. Phil]

I think when Spain, like the big banks, claim they are too big to fail, its time to let them fail. 

If these peasant countries leave the EURO, then the Euro will survive and those countries will become more competitive because they are not tied to a strong Euro. This is the way it has always been and this is the way it will be.

The only option, if Europe wants to model itself on USA and become a Federation of nations with a single economy, is for the richer and more successful countries like Germany to support these ailing economies and that is unfair and will eventually bring Germany down.

France too has a lot to fear. Airbus, the European Space Agency and others, are predominantly French, effectively extensions of their former national aircraft and aerospace industries which, as French industries could not be supported by the French taxpayers alone. So the EU has effectively roped in all European taxpayers to subsidise French industry; and you thought we subsidised only French agriculture. 
FIFA too! Lets dump Splat Bladder. 

We must make Europe leaner and more efficient. That means cutting costs, cutting away the useless body mass; perhaps we can start with the head? Brussels or Strasbourg whatever, we need to retire at least 65% of the luxury coaches on this gravy train to nowhere. 
 

[privateisation]

There is a way out for Greece, Spain, Portugal and the others. They need to sell assets, maybe to foreigners. Their bankruptcy can be avoided, but it will be at a cost to their pride and sovereign status which will be compromised to some extent.

If the PIGS are allowed to default this will harm the ECB as well as the bail out countries. \

There is no easy solution to this mess, the EUR project was a bad idea in the first place but just reversing the EURonisation process isn't going to be easy.

[NotEasy]

but inevitable.

Drachmas are back next month!

[Old Mike]

The whole thing was doomed from the start. Only a fool or a megalomaniac wanting a Euope of Soviet Socialist Republics could think that a country like Greece could be run by the same monatary rules as Germany.

[Dr. Phil]

Right OM. As we said on these pages a decade ago, who in their right mind would share a joint bank account with an Italian, or Spaniard, or Greek!!! They don't even bear gifts. 

Let's look on the bright side, a return of those billion Lira notes, worth about one dollar, with such beautiful pictures. I always enjoyed Italian currency, it described the nation perfectly, colourful, flamboyant, a rich historical, religious and cultural tapestry. 
And German Mark too and the French Franc. Europe is the poorer when we were sanitised of these currencies.

Dumping the Euro will be the best thing to happen to these struggling economies and will immediately stimulate national pride, so lacklustre since the Euro erased centuries of history.

[TheWrathOfGrapes]

Not only the PIGs should be cut loose, but the EU should have shovel these out long ago:

Portugal
Ireland
Greece

Spain
Hungary
Italy
Turkey

[Blaze]

Now only the PIGs should be cut loose, but the EU should have shovel these out long ago:

Portugal
Ireland
Greece

Spain
Hungary
Italy
Turkey

Turkey is not even in the EU...

Good job, Wrath.

[TheWrathOfGrapes]

That's why it is a turkey - Turkey has been an associate member of the EU and its predecessor since 1963. Looks like the EU is not too keen to give it full membership because of the crescent on its flag, even though the country is secular.

In any case, I need a T to complete the steaming pile.......

[Dr. Phil]

Turkey is a beautiful country and will one day make Europe a stronger Union.
However it will never be allowed as a member of the EU unless it treats Kurds with a little more respect and resolves outstanding territorial issues with compassion.
There are sinister undercurrents in Turkey and Islamic fundamentalism is never far from the surface however the people, many Turks, are seasoned travelers which gives their democracy roots and they appear prepared to fight for it and the military remain secular, as their founding father planned, which is their strongest card.
Corruption is rife, but it is not so unacceptable and it works however if the majority of the people are to benefit they must move to a tax-based system. None of us like to pay taxes but in some countries the infrastructure and/or commitment is simply not there.
Those faceless French imperialists have gathered and recruited many new members to their Empire, err European Union, all of whom plan on defaulting at some stage. What did GW say, "fool me once....." Well we've been had again and again and we appear to be asking for more. 

[Blaze]

It's coming closer, ladies and gentlemen. Worrying day in the news yesterday:


-Eurogroup president Jean-Claude Juncker said that the IMF may not give Greece the next tranche of its bailout funds next month, according to Bloomberg.

-Greek EU commissioner Maria Damanaki has raised the prospect of her country being forced out of the euro zone if it does not quickly assert control over its wayward public finances.

-French presidential candidate Marine Le Pen wants France to abandon the euro.

-Roubini: Greece is clearly insolvent. The contagion to Italy and Belgium is happening right now because of the debt crisis' uncertainty and the inability of the EU to put forward a credible medium-term solution to the sovereign debt crisis.


Looks like the chances of financial armageddon are growing.