Motoring3 mins ago
Is Anyone Not Going To Empty Their Accounts When The Banks Open?
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Regardless of what happens/promises etc, surely everyone is going to move their money out when they open so is the Cypriot banks crashing an innevitability?
Regardless of what happens/promises etc, surely everyone is going to move their money out when they open so is the Cypriot banks crashing an innevitability?
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NJ
Cyprus and Greece's problems are no more the fault of joining the Euro than ours are.
They just have less room to manoeuvre - they could have devalued as we did but that would still have cut the value of everybody's savings just as surely as if you'd deducted money from their accounts.
The root cause is they made lots of loans to Greece that could not be repaid
If you make bad loans it doesn't matter if you make them in Euros or Cyprus Pounds
Cyprus and Greece's problems are no more the fault of joining the Euro than ours are.
They just have less room to manoeuvre - they could have devalued as we did but that would still have cut the value of everybody's savings just as surely as if you'd deducted money from their accounts.
The root cause is they made lots of loans to Greece that could not be repaid
If you make bad loans it doesn't matter if you make them in Euros or Cyprus Pounds
The cypriots with cash in the bank may feel agrieved but if they think about it their is a golden goose in their midst. Their relative pittances are dwindled by the Russian investments and would go a long way to getting the country out of a crisis.
To stop a run on the banks these investments should be held and as before a tax put on them to get the country out of trouble. No withdrawels should be allowed just minimum amounts else a crash would almost come to that bank. Maybe they could alleviate the smaller investors by raising the lower limit.
To stop a run on the banks these investments should be held and as before a tax put on them to get the country out of trouble. No withdrawels should be allowed just minimum amounts else a crash would almost come to that bank. Maybe they could alleviate the smaller investors by raising the lower limit.
But Jake, their economy is tied to the powerhouse of the German economy, not at all right for them. Being tied into the Euro means no room for manoeuvrings (without German approval - hence the hatred of the Germans).
Like it or not the Euro is effectively the EuroMark.
I'm not sure the EU is to blame at all, it is membership of the Euro that is the problem and that is why the UK is not in the same boat at all.
Like it or not the Euro is effectively the EuroMark.
I'm not sure the EU is to blame at all, it is membership of the Euro that is the problem and that is why the UK is not in the same boat at all.
Quite true, jake. But the theft of money from savers in the UK has been done in a more controlled fashion and whilst UK savers have probably taken a bigger hit than those in Cyprus they have had time to adjust to their plight.
Back to the issue, though, neither Cyprus nor Greece would have indulged in such debt had they not been encouraged to do so by the low interest rates extant in the eurozone. This obviously suited the likes of Germany for much of the borrowed cash was spent on German goods and services. (In 2008 there were more Porsche Cayennes sold in Greece than in Germany). Prior to their joining the EU and the euro Greece was largely a peasant farmer economy of farms and smallholdings, with a bit of tourism thrown in. Few people could afford to buy a Porsche. It is the cheap and available cash that provided Greece's fantastic "growth" and this was cash they had not a hope in hell's chance of ever repaying. If you believe they would have incurred such debt in Drachmas I suggest you are wrong.
As far as Cyprus goes much of their woe stems from the high exchange rate which was fixed at conversion from the Pound. There's plenty of info on this available. They were given too many euros for their pounds, incurred debt in euros that their economy cannot support and now the chickens are coming home to roost.
You are quite correct when you say that eurozone nations have less room to manoeuvre - and that's precisely the problem they face. They have economic problems the same as we have, but they cannot do what they need to do as we can.
Michael "#sadmanonatrain" Portillo made a very apposite remark on “This Week” last night. He said that the euro is an ideology and when people get hold of ideologies they are willing to do extreme things. And the latest extreme thing they are willing to do is to steal people’s money.”
How very true. By any objective measure the euro has been an abject failure. But more than that, it is a project which, if free of ideology, would never have been launched. The European politicians who embarked on this folly have a lot to answer for. But they will never be called to account.
Back to the issue, though, neither Cyprus nor Greece would have indulged in such debt had they not been encouraged to do so by the low interest rates extant in the eurozone. This obviously suited the likes of Germany for much of the borrowed cash was spent on German goods and services. (In 2008 there were more Porsche Cayennes sold in Greece than in Germany). Prior to their joining the EU and the euro Greece was largely a peasant farmer economy of farms and smallholdings, with a bit of tourism thrown in. Few people could afford to buy a Porsche. It is the cheap and available cash that provided Greece's fantastic "growth" and this was cash they had not a hope in hell's chance of ever repaying. If you believe they would have incurred such debt in Drachmas I suggest you are wrong.
As far as Cyprus goes much of their woe stems from the high exchange rate which was fixed at conversion from the Pound. There's plenty of info on this available. They were given too many euros for their pounds, incurred debt in euros that their economy cannot support and now the chickens are coming home to roost.
You are quite correct when you say that eurozone nations have less room to manoeuvre - and that's precisely the problem they face. They have economic problems the same as we have, but they cannot do what they need to do as we can.
Michael "#sadmanonatrain" Portillo made a very apposite remark on “This Week” last night. He said that the euro is an ideology and when people get hold of ideologies they are willing to do extreme things. And the latest extreme thing they are willing to do is to steal people’s money.”
How very true. By any objective measure the euro has been an abject failure. But more than that, it is a project which, if free of ideology, would never have been launched. The European politicians who embarked on this folly have a lot to answer for. But they will never be called to account.
I forgot to address your question, fred.
Yes, the members of the euro did apply to join. And they cooked their books to meet the entry criteria. And their dishonest governments fooled their electorates into believing it would be in their long term interests. And they went on to break the fiscal rules set for them, particularly in their borrowing. And all this was done with the complicity of the EU.
Yes, the members of the euro did apply to join. And they cooked their books to meet the entry criteria. And their dishonest governments fooled their electorates into believing it would be in their long term interests. And they went on to break the fiscal rules set for them, particularly in their borrowing. And all this was done with the complicity of the EU.
As I posted this afternoon....
// A deal will be done. Small savers might be spared the levy raid and the larger despositors (Russians mostly) will bear the brunt. The Cyprus banks will be split and the toxic parts separated. The remains will be merged into just a couple of viable banks. Cyprus will remain in the EiroZone and EU. //
// A deal will be done. Small savers might be spared the levy raid and the larger despositors (Russians mostly) will bear the brunt. The Cyprus banks will be split and the toxic parts separated. The remains will be merged into just a couple of viable banks. Cyprus will remain in the EiroZone and EU. //
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