Euro under siege as Portugal hits panic button

Nom Chompsky

Nom Chompsky

High Tory
Joined
Mar 6, 2004
Messages
54,616
Reaction score
39,465
Location
Cape Town
Let's hope the Euro does disappear... then European countries will be free from unelected bureaucrats imposing their stupid laws and regulations on member states :love:

Source: Daily Telegraph

Portugal became the latest European nation to suggest it was on the brink of seeking help from Brussels after Ireland confirmed it had begun preliminary talks over its debt problems.

Greece also disclosed yesterday that its economic problems are even worse than previously thought. Last night, the German Chancellor Angela Merkel raised the spectre of the euro collapsing as she warned: “If the euro fails, then Europe fails.”

European finance ministers will meet in Brussels tomorrow to begin discussions over a new European stability plan that is expected to lead to billions of pounds offered to Ireland, Portugal and possibly even Spain.

David Cameron said he was thankful that Britain had not joined the euro, but indicated his displeasure that taxpayers in this country faced a £7 billion liability in any bail-out package.

The veteran Conservative MP Peter Tapsell warned that the “potential knock-on effect” of the Irish crisis “could pose as great a threat to the world economy as did Lehman Brothers, AIG and Goldman Sachs in September 2008”.

Ireland has resisted growing international pressure to accept EU financial assistance amid concerns that this would lead to a surrender of political and economic sovereignty.

However, the German government is expected to signal today that Ireland may have to accept a £77 billion bail-out, along with a loss of economic and political independence, as the price of preserving the euro. Mrs Merkel said the single currency was “the glue that holds Europe together”.

Her words came as fellow eurozone members Portugal and Spain rounded on Ireland. They fear that international concerns over the euro will lead to so-called market contagion spreading to them.

Fernando Teixeira dos Santos, the Portuguese finance minister, said: “There is a risk of contagion. The risk is high because we are not facing only a national problem. It is the problems of Greece, Portugal and Ireland. This has to do with the eurozone and the stability of the eurozone, and that is why contagion in this framework is more likely.”

Mr Teixeira dos Santos added: “I would not want to lecture the Irish government on that. I want to believe they will decide to do what is most appropriate together for Ireland and the euro. I want to believe they have the vision to take the right decision.”

He later sought to clarify his comments, insisting that Portugal was not preparing to seek assistance.

Greece had earlier added to the growing uncertainty when it said it would breach the conditions for the bail-out it was granted by the EU earlier in the year. The Greek government said its debt problem was much worse than previous dire forecasts.

Eurostat, the EU statistics agency, said Greece’s 2009 budget deficit reached 15.4 per cent of gross domestic product, significantly above its previous figure of 13.6 per cent.

George Papandreou, the Greek prime minister, said new European-wide taxes might now be needed to fund bail-outs.

“We need a mechanism which can be funded through different forms and different ways,” he said. “My proposal is that taxes such as a financial tax or carbon dioxide taxes could be important revenues and resources for funding such a mechanism.”

Yesterday, Irish ministers continued to insist publicly that they did not require a European bail-out to help meet the cost of repaying the country’s debts. However, reports suggested that Ireland might require help to shore up its banks.

Jean-Claude Juncker, the head of the Eurogroup of finance ministers, said the eurozone was indeed ready to act “as soon as possible” if Ireland sought financial assistance. But he stressed that “Ireland has not put forward their request”.

Ireland suffered the worst recession of any major economy and has amassed government debts of more than €100 billion (£84 billion). It has an unemployment rate almost twice as high as Britain at 13.2 per cent and currently has a record deficit equivalent to 32 per cent of its gross domestic product.

Senior figures at the European Central Bank yesterday lined up to insist that the Irish accept international help to reassure investors that the euro was secure.

Miguel Angel Fernandez Ordonez, the Bank of Spain governor and a member of the ECB’s governing council, said: “The situation in the markets has been negative due in some part to the lack of a decision by Ireland. It’s not up to me to make a decision. Ireland should take the decision at the right moment.”
Click to expand...
 
and the poor Germans will have to cough up to pay for the bailouts. Well they've always wanted to dominate Europe now they'll have to count the cost lol

George Papandreou, the Greek prime minister, said new European-wide taxes might now be needed to fund bail-outs.
Click to expand...

As if they're not paying enough now. Poor Eurolemmings
 
Last edited:
I'd be cautious of the local banks who are owned by European banks
 
The clash caught markets off-guard and heightened fears that Europe's debt crisis may be escalating, with deep confusion over the Irish crisis as Dublin continues to resist EU pressure to request its own rescue.

Olli Rehn, the EU economics commissioner, said escalating rhetoric in Europe was turning dangerous. "I want to call on every responsible European to resist the centrifugal tendencies and existential alarmism."

Swirling rumours hit eurozone bond markets, while bourses tumbled across the world. The FTSE 100 fell 2.4pc to 5681.9, and the Dow dropped over 200 points in early trading. The euro slid two cents to $1.3460 against the dollar as the US currency regained its safe-haven status.

Austria's finance minister Josef Proll said he was "very critical" of Greece's performance, saying Athens had failed to meet the tax revenue targets agreed under the EU Memorandum.

Credit default swaps on Greek debt rocketed 97 basis points to 950 as investors woke up to the awful possibility that the EU could turn its back on Athens, which will run out of money by mid-January without loans. A Greek default would trigger $300bn (£188bn) worth of CDS contracts.

A 'Troika' of EU-IMF inspectors is currently in Greece but has not indicated whether the next €6.5bn (£5.5bn) tranche will be approved. German influence is crucial, yet Greek premier George Papandreou courted fate on Monday when he accused Chancellor Angela Merkel of driving the weaker EMU states into bankruptcy by scaring investors with talk of "haircuts".

Finance minister Wolfgang Schauble expressed deep irritation. "Greece has enjoyed a lot of solidarity from Europe and Germany. But solidarity is not a one-way street: nobody should ever forget that," he said.

In Dublin, premier Brian Cowen said Ireland has "not made any application for external support" and is fully-funded until June. The assurance did little to silence reports that Ireland is in talks with the EU authorities and the International Monetary Fund for a loan package of €80bn to €100bn.

Finance minister Brian Lenihan declined to comment before meeting eurozone counterparts last night. Dublin is hoping a formula that would dress up any aid package as a move to recapitalise banks and stabilise EMU bond markets, rather than a rescue for Ireland.

The political chemistry is volatile because Ireland is being pushed into a pre-emptive bail-out to ensure that contagion does not reach Portugal and Spain. Citigroup said it was "far from clear" whether an Irish bail-out would in fact lift the pressure off others since they share the same problem of excess debt. Markets may simply shift their focus onto the next country.

Ian Stannard from BNP Paribas said the EU's €440bn rescue fund was never designed to be used. "The sheer existence of the fund was supposed to be enough, but that has not happened. It is only a matter of time before the Spanish economy slips back into recession, and that is when the spotlight will turn to Spain," he said.

A Spanish auction of 12-month debt on Tuesday saw rates of 2.36pc, compared to 1.84pc in October, even though markets think an Irish bail-out is a 'done deal'. Analysts say that Portugal and Spain should be careful what they wish for.
Click to expand...

What a mess :o
 
killadoob said:
Could someone explain why countries going bankrupt is the fault of the euro?
Click to expand...
+1

Problem is the new rise in socialism



Especially when so much of this money will be spent on the children of foreign workers who don't have much skills and networks to bring their children up into. Immigration solves the short term(5y) problem, and this is what wins votes, however the longer term problems(+10y+) goes near completely ignored in parliament. At the same time the huge taxes are chasing the highly skilled workers away to other nations.

Not well planned immigration also creates cultural chaos, parliament still ties culture(objective, choice, how we live) to the logic of unity among races(subjective non-choice, not how we live) and believes thus that we will all get together.

Europe also has one of the more aging populations, and thus the elderly need much and will need even more care, too little children because taxes are too high.

Solution i think: sort out immigration (university and higher, people earning +50k only, and shorter work leases), income tax breaks for those who have children.

Europe has become narcisist, EU used to be poor, they used to be poorer than China and India, I see no reason why they won't return to this status, they are not seeking to build their house on the rocks.

Get some foundations EU, US has Capitalism and Liberalism/Libertarianism, what does the EU have?
 
Last edited:
The news keeps getting better - well not for Ireland but for the collapse of the EU :)

Ireland's debt crisis could kill the European Union stone dead, EU president warns

The European Union faces a ‘crisis of survival’ over its deepening debt problems, its president warned yesterday.

In an astonishing intervention, Herman Van Rompuy said the financial meltdown engulfing Ireland, Greece and other EU countries could spark the collapse of the entire European project.

Mr Rompuy said: ‘We must all work together in order to survive with the eurozone, because if we do not survive with the eurozone, we will not survive with the European Union.’

His comments came as Chancellor George Osborne travelled to Brussels last night to join deadlocked talks on a possible £70billion bailout for Ireland, which could cost British taxpayers £12billion.

In a sign of the mounting panic in Brussels, Mr Van Rompuy was immediately contradicted by the EU’s economic affairs commissioner Olli Rehn who warned that Europe must ‘resist alarmism’ over the debt crisis.

In an apparent rebuke Mr Rehn said he was ‘concerned’ about the impact of public debate on the issue. He said the Irish crisis was ‘not a matter of the survival of the euro’.

Some British Eurosceptics could not resist gloating over the crisis threatening to engulf the euro.

Tory MEP Roger Helmer said: ‘Mr Van Rompuy claimed in the spring that the EU had “won the battle of the euro”. But it seems to have lost the war.’

The row came as Ireland was put under intense pressure to sign up to a £70billion bailout deal designed to prevent the crisis spilling over into other EU countries, including Portugal and Spain.

Simon Tilford, of the London-based Centre for European Reform, said: ‘Contagion to other member states will be all but inevitable. If, and when, it reaches Spain, the crisis risks spiralling out of control.’


Read more: http://www.dailymail.co.uk/news/art...ad-warns-Herman-Van-Rompuy.html#ixzz15X7hvvxb
Click to expand...
 
Do you think there will be enough place in Western Cape to resettle the European refugees ? ;)
 
OT
samuelp said:
Do you think there will be enough place in Western Cape to resettle the European refugees ? ;)
Click to expand...
haha quite a deal of them eh..

Recipe for success: Separate the WC, flood the WC with these people. Add sugar. We made it big!!!
 
phenom said:
y? of course it's not good, but why do you think it's so bad?
Click to expand...

Some of our car exports go in that direction, also fruits, etc.
If the euro-zone don't buy our produce, we will need to find other customers, which might not be that easy.
 
Nod said:
Some of our car exports go in that direction, also fruits, etc.
If the euro-zone don't buy our produce, we will need to find other customers, which might not be that easy.
Click to expand...

On the flipside you'll find a lot of ex-pats returning.
 
I'm no fan of the ANC-led government but our fiscal policy seems far better than what some of these other countries are doing.

I suppose SA is too poor to actually have a 'proper' welfare state anyway.
 
samuelp said:
Do you think there will be enough place in Western Cape to resettle the European refugees ? ;)
Click to expand...
They'll build skyscrapers. + we get to not lose all our most well educated to move to joe-town who steals all our taxes to pay them there and not here.
 
You must log in or register to reply here.
Back
Top
Sign up to the MyBroadband newsletter
X