http://www.bbc.co.uk/news/world-europe-22407235

Sounds awfully familiar...

'Look, we'll fcuk with the civil servants. By the time the public realises they're next we'll all be on a one day week earning thousands.'

Some reforms are necessary but when you have 18% unemployment and more to come you stop digging yourself digging.

This started with a government attempt to pay civil servants and pensioners a mere 13 months pay per year, rather than their traditional 14 months...

This sort of silliness is all very well when you can pay for it out of your own taxes. But when you have to go to the Germans for a bailout, that does means it's time to stop.

There are many little quirks like that across the Eurozone. Though pension ages will probably have to rise in line with life expectancy across Europe, no matter what. The fact that some retired early in some countries was wrong. Though why didn't the ECB and the politicians push for tougher bank regulation and reforms before entry. In the end all these bail outs are to bail out core nations banks like France and Germany. They had little domestic demand so lent all across Europe. If the bailouts stop then so does Frances banks and Germany's banks.

Your point isn't rational.

If the core nations need a bank bailout then the ECB will print the money for it. If the Germans only bailed out Greece to prop up their own banks then they would have found it cheaper and politically more convenient to simply do that directly rather than bailing out entire countries abroad.

Over simplification of your core claim merely enables others to dismiss you in similarly simplistic terms.

Deutsche Bank is probably insolvent, as are two of the three big French banks. France has had huge liabilities in the Eurozone periphery. The financial crisis of 2008 is still being played out to see who gets shafted and dumped with the losses. The ECB has already allowed hundreds of billions to be lent to the banks via the LTRO. That will probably have to be extended when it comes to be repaid. You are ignoring other interference. If German bank had taken losses on the Greek debt then it would have triggered credit events and credit default swap payments. These would have wiped out the US big banks along with AIG again. So the US government has been instrumental in rushing around Europe to stop any default. Ireland is going to need another bailout soon, as are Spain, Greece, Cyprus and Portugal.

Eventually the house of cards that is European and US banking will collapse. Cypriot banks had huge holdings in Greece and that was their downfall. German banks have huge holdings across Europe but mainly in France so if the periphery goes so does France and then Germany. It is a domino, because of overseas lending. No one knows exactly when the next collapse will happen but it will. Until the onerous debts are wiped out they will drag down the economies of Europe. Austerity only makes things worse.

The collapse of Irish banks wouldhave triggered CDS as well, but that didn't happen because the Irish government stood behind those banks. If CDS payouts are really that terrible (which would be odd given that they are insurance policies) then Germany can do the same as Ireland did.

It remains vastly cheaper and more efficient to do that than to bail out an entire foreign nation so that they can do the same thing and you only get a portion of the benefit you have paid for.

You are just indulging in another of your catastrophe fantasies. You have a lot of them. They are bad for you.

Not that they can. The Irish banks have still not defaulted but the Irish government were told not to allow the banks to default. The consequence is that Ireland went from having a good fiscal position to a lousy one just to bail out the banks. The reason that Greece has not been declared a default, that would trigger CDS payments is that it is classed as voluntary. If any of these had been declared as a default it might have triggered massive losses at London and Wall Street banks. You are ignoring other factors. Wiping out the irish banks would have been cheaper but that would have meant losses for others who right CDS. They do not make any provisions for losses and so they could never have covered all of them. It is who is ultimately liable that is skewing the policy.

So if they are that afraid of triggering CDS, they print money instead. It's a trade off, like any other monetary decision. All of these things can be dealt with. Paradoxically, they are easier to deal with when it is large and politically powerful nations in the firing line, because then the decision making is a little more focused.

Seriously, you need to put some thought into why all this end of the world panic you always do gives you such a massive disaster boner.

Ireland, Greece and France cannot print money. They are currency users not currency issuers like the US or the UK.

The Euro is a currency, it can be printed. If the problem is so catastrophically dire as you clearly wish it was, then it would be printed in sufficient quantity to cover the balance sheet of a bad bank.

The ECB are not allowed to simply print because of its mandate, plus the germans would not allow it. If they took that route then the EZ could break up when Germany exits. They do not want money printing. They could not even fund a rescue fund for Spain and Italy, because it would have involved printing money.

So what?

Either there is this dire catastrophe where all the banks in the western world are going to collapse - or there isn't.

If there is, then the Germans will overcome their distaste for moral hazard and permit money to be printed. It would be easy to avoid the spectacular FUBAR you predict, so that is what would happen.


There is something deeply twisted in your wishful thinking here.

I mean the Germans have two prospects they don't much like - inflation and chaotic financial collapse. You must realise that they are sane and would if forced to cheese between them go for the obvious better option right? So why are you so determined to believe that they won't, if not for the reason that you don't want them to? You want them to inflict catastrophe on themselves. That is unhealthy.

As for money printing, if you or I do it the government, police and others would come down on us like a ton of bricks. It is called counterfeiting. That is why Greece Ireland could not do it. Like you and I they are currency users not currency issuers.

It is not my wishful thinking. The last thing that I would want would be the outcomes that the governments are pushing us to. There were two choices at the start of the crisis, save the banks or save the people. They chose save the banks. Because they decided to save the banks, is why I now think that the Euro is doomed. That is why the debts in these countries are being held artificially higher than they need to be. If they had allowed the banks to collapse it would have led to reduced asset prices and that alone would have been a huge boost to the creation of new businesses, as it would have reduced their start up costs. The only way for economies to rebalance if asset prices are not included is through wages. That is why Greece and the rest of the EZ periphery are in a depression, and Iceland is growing.

More Euros can quite legally be printed. It's a political decision and given how much cheaper it is than the collapse the whole thing and all the banks, it would be the decision that was reached. It's insane to assume that because of German distaste for that policy they wold rather go down with the ship.

Save the banks versus saving the people? That's ludicrous hyperbole. It would have been better to create bad banks for busted assets, and there have been several other missed opportunities, but the grand unraveling you want is not realistic. Even the worst possible outcome is still nothing more really than your preferred choice in the first instance.

You always do this. Were it not for Rogers, I would consider your pessimism skills to be the best in the world. You automatically inflate every issue into a catastrophe. You have predicted revolution; civil war; mass suicides and sponsored euthanasia programs. In all cases, you assume other people will overreact to something not that bad. By most of our standards, recession is bad, but for your purposes it can never be bad enough.

You may object that you hate disaster. But it is clearly obvious that something in your psychological makeup attracts you to them. There's nothing that unusual about being both attracted and repelled by the same thing. As long as you never end up with Justin Bieber bound and gagged in the trunk of your car - because that is taking it too far.

In rational terms, your predictions tend to be absurd. The people involved in making them come true would all have to be gigantic idiots; you always assume a combination of dreadful intentions and ludicrous incompetence, it's like you view the world through the prism of a pantomime villain. In your fantasy world you treat other people like toy soldiers, lined up to meet their doom without any form of autonomous agency. You single people out as the source of historical decisions, but no future ones.

You are smart enough to see this problem unaided, but your vision is obscured by something.