Paphos Life

Several news flashes this week re the EU who are apparently facing many problems meanwhile good old Boris is seeking out Trade ventures with NZ and Oz - do some of the Remainers now believe that BREXIT just may have been the right choice for the UK?

Political opponents ripped into the German chancellor, saying businesses were “very concerned” by her approach and bemoaning that in Berlin “nobody is in charge” of directing the divorce talks towards a good result.

Mrs Merkel was accused of attempting to “humiliate” Britain by pushing for a punitive deal and of ignoring top industry figures who fear the economic fallout from such a strategy.

The blistering broadside came from two senior figures in the German Free Democrats (FDP), which is currently set for a crucial role as kingmaker when the next coalition government is formed in September.

Meanwhile Poland and Hungary are also at loggerheads with the EU over Brussels interference in internal court procedures

Meanwhile Italy has such an enormous debt that there is talk of it coming out of the EU and Euro, going back to the Lire and defaulting on its debt

Meanwhile BMW has announced that they have chosen its plant in Oxford to build their new electric car. There was speculation that it would choose the Netherlands or Germany but it is the UK!!

All these stories are now coming out and I believe that the EU must be seriously worried re its future

Poppy wrote: ↑Wed Jul 26, 2017 5:49 pm Several news flashes this week re the EU who are apparently facing many problems meanwhile good old Boris is seeking out Trade ventures with NZ and Oz - do some of the Remainers now believe that BREXIT just may have been the right choice for the UK?

Political opponents ripped into the German chancellor, saying businesses were “very concerned” by her approach and bemoaning that in Berlin “nobody is in charge” of directing the divorce talks towards a good result.

Mrs Merkel was accused of attempting to “humiliate” Britain by pushing for a punitive deal and of ignoring top industry figures who fear the economic fallout from such a strategy.

The blistering broadside came from two senior figures in the German Free Democrats (FDP), which is currently set for a crucial role as kingmaker when the next coalition government is formed in September.

Meanwhile Poland and Hungary are also at loggerheads with the EU over Brussels interference in internal court procedures

Meanwhile Italy has such an enormous debt that there is talk of it coming out of the EU and Euro, going back to the Lire and defaulting on its debt

Meanwhile BMW has announced that they have chosen its plant in Oxford to build their new electric car. There was speculation that it would choose the Netherlands or Germany but it is the UK!!

All these stories are now coming out and I believe that the EU must be seriously worried re its future

Hang on, weren't you asking for good news the other day? What happened?

Good news re BREXIt Dominic and I believe these are!!
Most certainly the news from BMW!

I don't know why German businesses are so worried. They only stand to lose about $90,000,000,000 per annum. Of course, their fate is in the rock steady hands of Angela Merkel who arranged the thieving of all those Euros from Cypriot citizens, so really all you German businesses there is really no cause for concern. Yuk Yuk.

What happened to Frexit? That was supposed to be the next big thing after the referendum.

Yes sorry I missed some!! However I don't wish to see the downfall of the EU I just want the best for the UK and I am sick to death of hearing bad news re BREXIT. At least the german industrialists understand that they need a good outcome.
Dominic I think it may have been FREXIT had Marine Le Penn got in

But she didn't.

You asked what happened to FREXIT and I attempted to explain! We all know she did not get in hence what happened to FREXIT!! Are you being deliberately obtuse today?

Poppy wrote: ↑Wed Jul 26, 2017 7:59 pm obtuse

Thanks for teaching me a new word (I am a non-native English speaker)...

I would never have guessed that you were a non-native Lofos -5!!

There is a slightly larger issue looming, that has not been greatly reported. It seems that unless the EU covers the 2020-2027 budget contributions from someone, they may have a bit of a problem filling a small 100Bn black hole, that will appear after 2019/20, or of course they will have to adjust the budget accordingly, but as it is not yet agreed yet they have time to make the corrections.

Digby

Poppy wrote: ↑Wed Jul 26, 2017 7:59 pm You asked what happened to FREXIT and I attempted to explain! We all know she did not get in hence what happened to FREXIT!! Are you being deliberately obtuse today?

People usually use the word "obtuse" on this forum when they have missed the point.

My point was, after the referendum, there was a lot of guff about how the rest of Europe was going to topple like a stack of dominoes. France first, then Holland I think.

Anyway, none of it happened. Now here's another list of "problems" for the EU. Same old, same old.

The Euro will be just fine - as long as we (or rather you, I am Swiss...) have Super Mario:

The euro’s obituaries were premature

Mario Draghi really did “whatever it took” to save the euro


FIVE years ago, Mario Draghi, head of the European Central Bank, pledged to do “whatever it takes” to save the euro. At the time, many people were predicting that the euro zone would break up. But Mr Draghi pulled off the trick; no countries have left the single currency. Borrowing costs have come down and even Greece has been able to tap the markets.

Keeping the euro together may have been the aim of the game, but was it worth it? As M&G, the fund management group, points out, the record has been mixed. Economic growth has rebounded to a respectable 1.5% year-on-year. This is not stellar but it is hard for the euro zone to grow rapidly when its population is ageing; the IMF suggests a greater proportion of older workers may weigh on productivity growth.

Of course, the euro zone could get more of the current workforce into the job market; unemployment remains too high. Economists debate whether this is down to a lack of demand (caused by overly tight fiscal policy) or by structural barriers such as an inflexible labour market (which creates insiders, who are hard to dismiss, and outsiders, whom employers are unwilling to hire). Neither issue has anything to do with the ECB. The bank could be criticised for not getting inflation up to 2%. On the other hand, if you had told people 10 years ago that the ECB’s balance sheet would be more than €4trn, that it would have bought government bonds and imposed negative interest rates, few would have believed you.

The whole exercise has been a remarkable illustration of the power of a central bank. Does this prove the case of believers in modern monetary theory, who argue that there is virtually no limit to a government’s resources, provided that it has the support of an independent central bank? It seems a bit early to say that. First, in the early years of the crisis, commercial banks were tending to shrink their balance sheets and cut lending; central banks thus acted to stave off a Great Depression-style shrinking of the money supply. The policy consequences for governments might be rather different if commercial banks were indulging in a credit spree. Second, an individual central bank that rapidly expanded its balance sheet might face the problem of a currency decline, as international investors became less willing to hold it. But in the last nine years, all the big central banks have been expanding their balance sheets, so investors have had no “weakling” to pick on. That might not be the case going forward, as America starts to tighten policy.

Voters in Greece or Italy may not feel that Mr Draghi has been that successful, given the damage done to the former economy and the stagnation in the latter. What cannot be known is the counterfactual. Had Greece left the euro, citizens would have probably seen their bank deposits devalued, and inflation and interest rates soar. Argentina’s trials in the early years of the 21st century are a case in point. There will not be many statues put up to Mr Draghi but he deserves a fair deal of credit.

(The Economist, 26/7/2017)

Termites Dream wrote: ↑Wed Jul 26, 2017 11:00 pm Dominic....I take your point but the odds were always long and based on democracy.Since the votes preserved the status quo the EU did not need a re-vote.

The problems now are about cultures, nationalism, maths and politics. Some will be sorted, but most I doubt, masking, ignoring and can kicking to another day only work for just so long.

The reality may have been that the odds were long, but to a fair few (but by no means all, I grant you) Brexiters, the EU was going to topple. The rhetoric in the Op just read, to me at least, like an extension of that theme.

Besides, no matter who comes out of it better, the aging population will be the ultimate ticking time bomb that none of us can escape from.

Lofos 5- Predictable stuff from the Economist. No mention of the 5,000,000,000,000 (5 trillion) Euros "Super Mario" has SO FAR pumped into the eurozone to achieve this “feat” (and much of it backed by junk bonds). That’s 3 billion euros a day for the past five years- AND CONTINUING- an emergency measure the UK and USA used only briefly after the financial crash. IT’S SIMPLY MONEY PRINTING and DEFLATION, in order to provide the apparently spare cash for the eurozone to buy Teutonic tin! (Why Cyprus, Malta etc are full of Mercs).
Good try, but you haven’t convinced me of anything!

Happy in Cyprus wrote: ↑Sun Jul 30, 2017 12:43 am Yes, we're always told (by those of a certain disposition) how bad the EU and the Euro is.

KG claimed a year ago the EU had died but had simply refused to topple over. Three or four years ago McIngy reeled off a list of countries which would (he claimed) eject or be ejected out of the EU and Euro: Portugal, Italy, Greece, Spain - or PIGS as it was often referred to. It went without saying that Cyprus and Italy would fail too. McIngy claimed, like many, that the Dutch and then the French would go alt-right...and that that would sound the death-knell for the EU. Merkel would be booted out of power too.

Well, I've got news for the EU-haters - didn't happen. If the Euro is a barometer of the European economies I would say that they're in pretty good health, much to the chagrin of those would love to see the EU partnership dead and buried. Right now it's the US and UK currencies which are faltering - not the Euro.

Of course, much of the venom spouted by EU-haters is a smokescreen to hide the fact that Brexit can now be seen for the biggest mistake it ever was. The UK economy is bleeding profusely, with not a qualified medic in sight. So now the EU-haters lash out at those who sensibly retained their EU membership.

Nice try Poppy, but you'll have to do better than that

Your first post in this thread, HiC. I admire your restraint.

What I don't understand and have yet to see any defence of is why, if the € and the EU economies are doing so well, is quantitative easing still going on to the tune of €60 BILLION per month? Surely if things were as good as some would have us believe then this wouldn't be necessary?

Jimgym wrote: ↑Mon Jul 31, 2017 7:39 am What I don't understand and have yet to see any defence of is why, if the € and the EU economies are doing so well, is quantitative easing still going on to the tune of €60 BILLION per month? Surely if things were as good as some would have us believe then this wouldn't be necessary?

Good post.

(Since March 2016, the amount has been £80 Billion per month...)

Termites Dream wrote: ↑Tue Aug 01, 2017 12:09 am Jimgym/Royal...I pointed this out on the "EU facing serious problems it seems" blog title. I referred to Heroin and Cocaine being pumped into the system. This was a quote I picked up from Richard Fisher of the Dallas Fed. He described QE one(USA) in these terms and regretted the Fed continued after 2 trillion... if that's not enough!!. The point is the ECB has decided that the EU needs this where as the UK economy does not. You are left to assume that without QE the EU would be in difficulty/trouble....you can choose your own word. When you therefore compare the economy and currency of the EU and UK at this point in time you have to consider the stimulus one side is receiving against the other who is not.

Agreed.

It's quite likely that the Eurozone would still be in a recession if it wasn't for the crazy sums being pumped into the economy by the ECB in order to stimulate growth...

...and it's still not working!

Happy in Cyprus wrote: ↑Tue Aug 08, 2017 3:03 am

Royal wrote: ↑Tue Aug 01, 2017 12:23 am...and it's still not working!

With most European economies doing rather nicely right now, I would say the evidence is to the contrary

If the policy had worked, Lloyd - surely it would be time to stop?

The EU QE programme was meant to stop in Sep 16.

It didn't.

Instead, it has carried on and the amount was increased in Mar 17 from €60 Bn per month to €80 Bn per month. (Yes - per month)

I wonder how Eurozone economies would collectively be doing if not for such large sums being pumped into them in order to fight off deflation?