Paphos Life

Royal wrote: ↑Thu Aug 31, 2017 9:56 am

jeba wrote: ↑Thu Aug 31, 2017 8:04 am
Do you really think that the ECB would follow those bailout policies forcing the Bundesbank to run up a 857 billion target balance (up from 700 billion last year) at an interest rate of zero and without the right to make it due for repayment if Germany was in a dominating position? Do you believe that money will ever be repaid?

Jeba,

We’ll have to agree to disagree on whether a system of governance which gives some countries no vote (depending upon which month of the year it is) whilst one country - Germany - has 3 votes is domination or not. It's semantics really, and I already tried to explain that the meaning of dominance in my book is supremacy, superiority, sway, leverage, influence. You disagree. Fine.

Indeed we´ll have to disagree. In my book "dominating" the ECB would mean that you can push through the policy you wish to have followed. Germany very obviously can´t do that. Which to me proves that there is no (or at least not enough) "...supremacy, superiority, sway, leverage, influence".[/quote]

Royal wrote: ↑Thu Aug 31, 2017 9:56 am As far as whether the Bundesbank will ever be repaid or not - I see no reason for it not to happen. After all, the ECB, which controls Euro money supply has been effectively creating new money to support its QE programme (which may or may not have worked).

As far as I understood it (but I´m an economic layman, so you´re welcome to correct me if I´m wrong) the ECB doesn´t create money itself but makes the national central banks (such as the Bundesbank) do so and to transfer it to another central bank in exchange for a (non-enforcable) claim. This is very different to e. g. the FED in the US. The 12 central district banks of the US have to settle their balances with the Fed once a year. Whatever, it seems clear that this creation of money is currently happening in violation of the treaty of Maastricht (and against German resistance). It may be pointless linking to a video in German language in an English forum but just in case there should be readers of this thread with command of German it´s explained here: https://www.youtube.com/watch?v=0rvlJJDQf78

Royal wrote: ↑Thu Aug 31, 2017 9:56 am Like many others, I am highly sceptical about the long term future of the Euro, and I am thankful that the UK didn't go for it. A currency and subsequent ECB policy which tries to cover the interests of the prosperous Northern Eurozone and the poor Southern Eurozone at the same time without fiscal unity seems doomed to fail. Zero interest rates, a single focus on inflation to the detriment of unemployment rates, a colossal QE programme of around €1Trillion and Mario Draghi saying that the ECB will do “whatever it takes” to prop up the euro seems to have worked…for now.

"For now" being the magic words. I highly doubt it will work forever. I wish the Euro had never been introduced (even though I was in favour of it at the time because I believed in the promises of then Chancellor Kohl and his finance minister).

Royal wrote: ↑Thu Aug 31, 2017 9:56 am Growth is nowhere near the levels it needs to be, the sovereign debt crisis has not gone away and yet some countries are getting richer (Germany,

Germany is only getting richer if you accept the target balance of the Bundesbank at face value. Which seems quite audacious to me.

Royal wrote: ↑Thu Aug 31, 2017 9:56 am Greece is knocking the ECBs doors again, Italy has fundamental banking problems, as does Deutsche Bank and Brexit will fundamentally alter the balance of EU funding.

Brexit will harm the Southern economies as I highly doubt that the current net contributors will raise their contributions accordingly. In the long term it might harm Germany even more because it will change the power structure within the European council of Ministers as the "Northern block" will no longer have it´s 35% blocking minority, thereby opening the flood gates for Southern wishes for a transfer union (which was never going to happen according to what the German electorate was told when the Euro was created).

Royal wrote: ↑Thu Aug 31, 2017 9:56 am Add to this mix the social unrest which very high unemployment rates in the Southern Eurozone will create and the growing nationalism in countries like France, Spain, Portugal and the Netherlands and you will see why people like Alan Greenspan predict that the Euro will ultimately fail.

Either that or there will be a transfer union at the expense of the taxpayers of countries like Germany, the Netherlands, Luxemburg, and Finland. Or Italy will vote for an anti-Euro government at the next elections and will thereby be the falling sword of Damocles in which case we´ll find out what the target balances in the books of the Bundesbank are worth (hint: think of the fairy tail about the emperor without clothes).

jeba wrote: ↑Thu Aug 31, 2017 1:14 pm
Indeed we´ll have to disagree. In my book "dominating" the ECB would mean that you can push through the policy you wish to have followed. Germany very obviously can´t do that. Which to me proves that there is no (or at least not enough) "...supremacy, superiority, sway, leverage, influence".

Domination by Germany doesn't have to result in ultimate success to be classed as such. Two World Wars are surely testament to that…

jeba wrote: ↑Thu Aug 31, 2017 1:14 pm
As far as I understood it (but I´m an economic layman, so you´re welcome to correct me if I´m wrong) the ECB doesn´t create money itself but makes the national central banks (such as the Bundesbank) do so and to transfer it to another central bank in exchange for a (non-enforcable) claim. This is very different to e. g. the FED in the US. The 12 central district banks of the US have to settle their balances with the Fed once a year. Whatever, it seems clear that this creation of money is currently happening in violation of the treaty of Maastricht (and against German resistance).

Each of the 19 Eurozone Central Banks can legally issue Euro banknotes, but only the ECB can authorise such issues, through which it tightly controls the money supply. Of course banknotes don't need to be printed in QE which artificially creates an asset which didn't exist before. Such "assets" are then used to buy bonds. However, a more appropriate name (in my opinion) for QE is ‘creative accounting’ where you create an asset out of nothing (there seemed to be a lot of creative accounting in the UK in the 1980s during the Del Boy days...). Theoretically, the QE policy is designed to encourage banks to lend which should lead to businesses and individuals increasing their spending thereby encouraging growth. After 2 years and €1Trillion of new “credits” being created it seems to have had extremely limited success. To put that figure into some sort of perspective, the ECB in Aug 2016 estimated that the total value of Euro banknotes in circulation was €1.1Tn. Theoretically, increasing the money supply should devalue a currency on the foreign exchanges. However, the Euro is riding high at the moment due to the Trump factor and the weak dollar. It cannot last. The banks, it seems, may also be lending QE money which the ECB creates at nominal interest rates, to 3rd world countries for greater profits, rather than within the EU where it's meant to prevent deflation and promote growth. Nothing changes…

jeba wrote: ↑Thu Aug 31, 2017 1:14 pm "For now" being the magic words. I highly doubt it will work forever. I wish the Euro had never been introduced (even though I was in favour of it at the time because I believed in the promises of then Chancellor Kohl and his finance minister)…Germany is only getting richer if you accept the target balance of the Bundesbank at face value. Which seems quite audacious to me.

Of course Germany is a great example of why the Euro experiment must surely fail. Germany’s economy is booming. It is the industrial powerhouse of Europe, has low unemployment, low inflation, a great work ethic, a high standard of living and a balance of trade so heavily in their favour that it makes their GDP No 1 in Europe and No 4 in the world. However, had Germany retained the Deutsche Mark, for all the reasons stated, their inward investment would be huge and savers would consequently enjoy a decent rate of interest on their savings. The fact that they currently have a negative interest rate clearly indicates the weakness of the Euro experiment and the failure of the “low inflation” policies of the ECB and Bundesbank. However, Germany (which undoubtedly considers itself to be “first among equals”) is just one of 28 EU countries and just one of 19 Eurozone countries. Sometimes policies are designed to solely benefit other “partners”. As a net contributor to the EU budget for its entire membership period, the UK has learned this to her great cost.

jeba wrote: ↑Thu Aug 31, 2017 1:14 pm
Brexit will harm the Southern economies as I highly doubt that the current net contributors will raise their contributions accordingly. In the long term it might harm Germany even more because it will change the power structure within the European council of Ministers as the "Northern block" will no longer have it´s 35% blocking minority, thereby opening the flood gates for Southern wishes for a transfer union (which was never going to happen according to what the German electorate was told when the Euro was created).

Brexit will hurt ALL the EU economies.

There will be even greater damage to ALL EU economies if there isn't a decent deal done with the UK for future trade. The sooner the grandstanding by the EU “negotiators” (and Juncker himself) ceases, the sooner we can properly negotiate a future which is mutually beneficial. I am saddened and frankly extremely angry at the rhetoric emanating from those claiming to represent the EU27. I very much doubt that they speak in the name of businesses in all EU countries which wish to trade with us post Brexit.

jeba wrote: ↑Thu Aug 31, 2017 1:14 pm
Either that or there will be a transfer union at the expense of the taxpayers of countries like Germany, the Netherlands, Luxemburg, and Finland. Or Italy will vote for an anti-Euro government at the next elections and will thereby be the falling sword of Damocles in which case we´ll find out what the target balances in the books of the Bundesbank are worth (hint: think of the fairy tail about the emperor without clothes).

Agreed. Although Netherlands and France didn't ultimately vote for separatist candidates, the Europhobe movement is increasing and the EU seem to be closing their eyes and covering their ears to the mood of the people they arrogantly purport to represent.

He can and does Lloyd, this is an absolute disaster especially for those expats being paid pensions from the UK, did those who voted to quit the EU not think about this, and the obvious drop in the value of the £. Obviously not.

A complete shot in the foot vote. No need for long replies and quotes, we all now know the outcome for the UK is dire.

Royal wrote: ↑Fri Sep 01, 2017 4:00 pm

jeba wrote: ↑Thu Aug 31, 2017 1:14 pm
Indeed we´ll have to disagree. In my book "dominating" the ECB would mean that you can push through the policy you wish to have followed. Germany very obviously can´t do that. Which to me proves that there is no (or at least not enough) "...supremacy, superiority, sway, leverage, influence".

Domination by Germany doesn't have to result in ultimate success to be classed as such. Two World Wars are surely testament to that…

You seem to have a strange definition of "domination". Germany´s arm is being twisted by the Euro-system and you still call that domination? But let´s agree to disagree on semantics.

Royal wrote: ↑Fri Sep 01, 2017 4:00 pm Each of the 19 Eurozone Central Banks can legally issue Euro banknotes, but only the ECB can authorise such issues, through which it tightly controls the money supply.

Per se, there would be nothing wrong with the ECB reserving the right to authorise money creation by national central banks. The problem (from a German perspective) is that it can force the Bundesbank to do so and transfer that newly created money to other central banks in exchange of a target-credit at conditions that are simply ridiculous. How would you feel if the Bank of England had to do that?

jeba wrote: ↑Thu Aug 31, 2017 1:14 pm "For now" being the magic words. I highly doubt it will work forever. I wish the Euro had never been introduced (even though I was in favour of it at the time because I believed in the promises of then Chancellor Kohl and his finance minister)…Germany is only getting richer if you accept the target balance of the Bundesbank at face value. Which seems quite audacious to me.

Royal wrote: ↑Fri Sep 01, 2017 4:00 pm Of course Germany is a great example of why the Euro experiment must surely fail. Germany’s economy is booming. It is the industrial powerhouse of Europe, has low unemployment, low inflation, a great work ethic, a high standard of living

I hope the Euro will fail as the alternative would be a transfer union with Germany, Holland and Luxemburg as permanent net donors. Apart from that your view of the state of things in Germany is a bit too rosy I´m afraid. While it´s true that in the West unemployment is very low the situation in the former Soviet occupation zone is much worse. Also, the average net asset value of households is only € 51400.- which is the lowest value within the EU. In Greece it´s € 101900 and in Cyprus € 266000 (data from 2013 according to the ECB https://www.welt.de/wirtschaft/article1 ... Platz.html). Only a minority of Germans own their homes - most are renting. Average pensions dropped from 65% of your last income to 48% and falling (mainly due to reunification which gave Eastern Germans who hadn´t paid into the pension pot access to it) while the pension age was raised to 67 years. Just to put the myth of rich Germany into perspective and to explain why Germans are so reluctant to bail out other countries.

Royal wrote: ↑Fri Sep 01, 2017 4:00 pm and a balance of trade so heavily in their favour that it makes their GDP No 1 in Europe and No 4 in the world.

According to http://countryeconomy.com/gdp/germany German GDP per capita is ranking only no. 14 out of 49 countries surveyed.

Slightly off topic, but it was announced this week that the Norwegian oil and gas fund, has exceeded a Trillion Euros..... making Norway possibly the most stable nation on earth. Oh how we squandered the UK’s oil and gas reserves to fund political excesses under succesive governments.

Brexit is expected to a cause a loss of 10% GDP, around 200 billion a year. Government revenues are around 35% GDP, so a loss of 10% means 70 billion less for public spending. State pensions cost 90 billion a year, 65% of voters over 65 voted to leave.
A solution is to cut State pensions by 65% or 58 billion per year and let the generation that mostly voted for Brexit pay for most of it.
This is a controversial idea, so we should hold a referendum to ensure the will of the people.
As in the EU referendum, we must ignore the interest of those that will be most affected, so pensioners will not be allowed to vote.
Of course many pensioners will lose out, but they will be reassured by empty promises from wealthy politicians, and they can starve in the knowledge that it is a price worth paying for Brexit.
Never mind cake let them eat sovereignty

Hudswell why should we get behind the UK Government, like you I live here, your Army pension comes from the UK? like my state pension, a quarter or more of its value has now gone, so I should not moan about this? cobblers.
Cyprus economy depends on tourism, mainly from the UK, I have spoken to many British holiday makers, many will not return because of the exchange rate, and I for one do not blame them, we do not all have deep pockets, and if this is moaning then I will continue to express my concerns, you exit voters do not know what you have done this is a compleat disaster for us all..

My last comment on this section as many of the posters here I recognise as wind up merchants, so what is the point of doing so, the UK leaving the Euro is a decision we will all regret.

Uncle D-Since you appear to position yourself among the liberal elite psuedo-intelligensia, you might try distinguishing between "effected" and "affected"!

Allesley wrote: ↑Sat Sep 02, 2017 6:50 am He can and does Lloyd, this is an absolute disaster especially for those expats being paid pensions from the UK, did those who voted to quit the EU not think about this, and the obvious drop in the value of the £. Obviously not.

A complete shot in the foot vote. No need for long replies and quotes, we all now know the outcome for the UK is dire.

1. Nothing made up.

2. What disaster? The only thing so far as I can see at this stage that you can possibly be referring to is a drop in the exchange rate, which actually is very good for UK exports.

3. I suspect that those who voted Brexit (the majority) had the long term well being of the UK and its people in their sights rather than the drop in pension of JC in Cyprus or the temporary reduction of spending money for UK holidaymakers in the Eurozone.

4.. if you can't take the heat - get out of the kitchen.

Allesley wrote: ↑Sat Sep 02, 2017 1:52 pm
My last comment on this section as many of the posters here I recognise as wind up merchants, so what is the point of doing so, the UK leaving the Euro is a decision we will all regret.

Good news - if you had your way, you would just ban anyone who didn't agree with YOU. Because, of course, YOU are always right.

The tide has turned.

Let's just have a look at how these talks are really going shall we and then let's decide who has more honour and indeed the moral high ground. Let's not forget that the EU specifically prohibited leaders of EU27 from talking to the UK about Brexit matters, whilst at the same time, (quite outrageously) inviting the 3 other UK party leaders (Labour, SNP and Lib Dems) for talks simply in order to undermine the ruling UK government in a blatant case of attempted “divide and rule.”

The “EU” in the guise of Juncker, Barnier and Verhofstadt have been rubbishing everything set before them by the UK side. This is not just an insult to our Brexit Secretary David Davis, but to the 100 or so senior UK negotiators who accompany him and the thousands of UK civil servants and behind the scenes experts who have prepared the position papers.

When trying to discuss a future trade deal with the EU, let's look at what Article 50 actually contains. It seems quite clear in its wording on 2 specific points: that the future relationship be taken into account during the negotiations and that after 2 years of being triggered, all Treaties will cease to apply to the leaving state. There is NOTHING which requires a payment of any description to be made. The fact that the EU are demanding money (with menaces) is, quite simply, the magical thinking that the EU accuses the UK of in relation to the UK/Eire border.

http://www.lisbon-treaty.org/wcm/the-li ... le-50.html


The rhetoric from the EU side seems to be constantly negative and accusations of lack of progress are probably aimed more at the EU27 sceptics in order to make it clear that leaving the club is not going to be easy for any country that may dare to consider it in the wake of Brexit. No surprise there. Of more concern to me personally, is the drip, drip, drip from the clearly anti-democratic camp of Remainers who hope by constantly undermining our leadership, our democratic will and our resolve that they will get another referendum, or a soft Brexit or an abandonment altogether of the Jun 2016 vote. They can look to Ireland (twice) and Finland where “No” votes in their respective referendums were quickly followed by enormous sums of EU money and public fear campaigns (exactly like we are now getting) followed by another referendum to get the ‘right’ result.

The tide of Brexit negotiations seems to have turned, however, and Davis said that the EU negotiators showed a lack of flexibility and imagination. In other words, they are rigid and stunted in their thinking. No surprise there for all Brexiteers! Barnier is simply stuck. His brief was simple - get as much as you can from the Brits and refuse to talk about anything else until we agree on how much we can get. The fact is that they want a huge sum of money from us but are unable to actually specify how much it is or to give a breakdown of how the sum is to be assessed or even a legal basis as to WHY we should pay anything. It is worthy of note that a UK civil servant dismantled in legalese this week the entire fiction that we should pay anything on leaving the EU, leaving the EU negotiators ‘flabbergasted’. Good show.

http://www.telegraph.co.uk/news/2017/08 ... dismantle/

A good example of just the sort of nonsense the UK will NOT be helping to “fund” after 2019! Worth reading for a really good laugh (and the comments)...
http://cyprus-mail.com/2017/08/31/polic ... aud-tepak/

kingfisher wrote: ↑Sat Sep 02, 2017 3:02 pm A good example of just the sort of nonsense the UK will NOT be helping to “fund” after 2019! Worth reading for a really good laugh (and the comments)...
http://cyprus-mail.com/2017/08/31/polic ... aud-tepak/

Of course, no Brit has ever misused EU or UK funds or made a fraudulent deal, have they?
https://www.theguardian.com/politics/20 ... e-of-funds
https://www.theguardian.com/politics/20 ... g-eu-funds

The National Fraud Authority (NFA), an executive agency of the Home Office which is tasked with leading and coordinating anti-fraud action in the UK, estimated that the current level of fraud suffered by the UK public sector amounts to approximately £20.3 billion per annum.[35] In 2011 the total Government revenue in the UK was £589 billion and the NFA's estimate suggests that 3.4 per cent of the UK's total budget was lost to fraud. The NFA warned that its figures should be approached with caution and emphasised that their conclusions are not statistics.

https://euobserver.com/institutional/136254
https://books.google.com.cy/books?id=sU ... ds&f=false

The British government faces a €2bn (£1.7bn) fine for negligence that allowed criminal gangs to flood European black markets with illegal Chinese goods, EU anti-fraud investigators have said.

https://www.theguardian.com/world/2017/ ... estigators

Interesting that some of the above allegations of fraud involve UKIP!

kingfisher wrote: ↑Sat Sep 02, 2017 2:05 pm Uncle D-Since you appear to position yourself among the liberal elite psuedo-intelligensia, you might try distinguishing between "effected" and "affected"!

Thanks for pulling me up about my typo, I have now rectified it.

Devil- good attempt at deflection; however, two wrongs DON'T make a right, although they might do in the EU!

Uncle D

Cut state pensions ? we paid for those pensions, the government has no right to take anymore of our hard earned money, they might find that the baby boomers will fight back !

Royal

Some very good posts.

Jackie

The UK could emulate the “booming” EU and “do whatever it takes”, like printing 80 billion quid a month- surely that would pay all our pensions!

Uncle D wrote: ↑Sat Sep 02, 2017 1:36 pm Brexit is expected to a cause a loss of 10% GDP, around 200 billion a year. Government revenues are around 35% GDP, so a loss of 10% means 70 billion less for public spending. State pensions cost 90 billion a year, 65% of voters over 65 voted to leave.
A solution is to cut State pensions by 65% or 58 billion per year and let the generation that mostly voted for Brexit pay for most of it.
This is a controversial idea, so we should hold a referendum to ensure the will of the people.
As in the EU referendum, we must ignore the interest of those that will be most affected, so pensioners will not be allowed to vote.
Of course many pensioners will lose out, but they will be reassured by empty promises from wealthy politicians, and they can starve in the knowledge that it is a price worth paying for Brexit.
Never mind cake let them eat sovereignty

Interesting word that....... " Expected". On a par with might, maybe, probably, possibly and all the other words that are spouted by journos, anti Briexiteers et al which mean absolutely diddly squat.

Hudswell wrote: ↑Sat Sep 02, 2017 7:23 pm But Jackie, nothing is sacred....and whilst I would never advocate such a measure it is all about affordability and if in the future pensions and benefits become unaffordable some extremely hard decisions may have to be made. Yes we have paid our NI which sustained pensioners at that time....but we never paid into a pot of gold for our futures....we have to depend on the current generation for that.

Most who for now will only receive theirs at age 68.

Hud

We had no option whether to pay for a state pension or not, it was taken from our wages/salaries without our consent, to provide us with a state pension. We had no control either of what that money was spent on, that was down to the government of the time. I know many pensioners who's only income is their state pension, expecting that the promised pension would be sufficient to keep them in their older years. Many at the time, were never told otherwise, but now the truth is out.

As for benefits, The scroungers in the UK, and there are many, of all races and creeds, milk our country dry, all we can do is watch them do it, whilst we have ex service personnel, and elderly Brits living rough on our streets. That's where it must stop, not by stealing our pensions. Our government needs to get a grip where it matters.

Jackie