Why can't Euro nations just drop Greece and move on? Or is the Euro really threatened?

[screien]

Why can't Euro nations just drop Greece and move on? Or is the Euro really threatened?

[samak]

My guess is it would trash the Euro and cause further economic instability.

[Gromit]

Other European countries and banks have loans to Greece, if Greece goes bankrupt and those loans don't get repaid, then there is a knock on effect. In turn that could affect those countries and their economies and a domino effect of failing countries would spread across Europe. So all attempts to refinance Greece or being persued.

Part of the problem is the IMF calling the shots. They have a very poor record, and more often than not, they make matters worse. The present austerity measures that the Greeks have delivered (and been on target) to meet the loan conditions, have unfortunately led to a massive fall in tax revenues, and hence the country running out of money.

[emmie]

What if this second bailout doesn't work, and Greece is still failing.

[Gromit]

// What if this second bailout doesn't work, and Greece is still failing. //

It will default on all those loans, which could trigger a European (or even a Global) banking collapse. And countries will have to borrow more £€$billions to save the banks again. There are many inter connections between economies, and abandoning one is not a good option. A deal will be done.

[emmie]

A deal was put into place the first time, i can understand the economics of the situation, but wonder if Greece gets it bailout, what happens to other countries that have the Euro, and they get into trouble. Is this just monopoly money, being passed from pillar to post.

[venator]

Oh joy! We can now realise the benefits of the "qualified majority voting" that Mr Brown agreed to!

If Europe decides that the UK is going to stump up, we have no choice.

[emmie]

everything i have seen and heard has Britain eventually adopting the Euro, should we be doing that, considering the situation we are in. I understand how its all tied up, not just in trade, but how is it possible this could be the the right step.

[venator]

Very true, Em10 - we agree on this one!
The wording of the treaty includes "an ever closer union"

Says it all - did nobody notice?

And we've got the Lib Dems in Westminster, who dearly love the EU and would join the Euro.

[starone]

We are not self-supporting, unfortunately so we are tied in with many other countries. We, as a country will have to grit our teeth and get on with it. l don't think strikes or demonstrations will help. This, of course applies to the other countries as well. Pity they don't pull together.

[emmie]

has anyone seen a united Europe, it isn't, and no amount of pressure from the powers that be will make it so.

[starone]

Too true, em.

[rojash]

"has anyone seen a united Europe, it isn't, and no amount of pressure from the powers that be will make it so. "

That was the attitude of many Americans towards the US after the civil war (and in fact remains the attitude of a significant number to this day). One thing is for sure, without a Federal Government, very few of the states in North America would ever have risen to the level of prosperity they have enjoyed for the past 120 off years.

[emmie]

America has wealth, if you say so, but tell that to the millions who are in poverty, i have been to the US and seen first hand the shanty towns, you can't call them homes, that many live in, millions of americans with no healthy insurance, and a mountain of debt. The economic fall out started in the US, which had a knock on effect around the world, i can't see us really wanting to take our model from the US, their race problems alone are beyond what you would expect from a country that has welcomed immigrants all these many years. The divide between rich and poor is wider than anywhere i have seen in the western world. We don't need a federalised Europe, not now, not ever.

[Old_Geezer]

They could drop Greece, but that removes the point of the EU since the idea is everyone supports everyone else in time of need, for the overall benefit of all. I think that is in place inside or outside the Euro experiment. But yes, maybe time to admit the Euro was the bad idea most said it was, and stop trying to prop it up.

[emmie]

Not sure if you find this interesting or too long, apologies, but
America’s collective debt, also called the national debt or the public debt, represents the money that the U.S. government owes to the owners of debt instruments that are issued by the U.S. treasury. There are several types of debt instruments issued by the U.S. Department of the Treasury. All of these items are collectively called treasuries.
America has always had debt. Since the 18th century, the country has carried a load of debt that has fluctuated with the political and social climate of the day. In 1860, America’s debt was $65 million. The Civil War brought about a major spike in the debt. World War I and World War II also brought about major rises in the debt. The latest American debt numbers have put it at its steepest numbers since the debt level spiked during World War II.
America’s debt, as owed to foreign nations, has been rising steadily over the years. The gross debt in trillions of U.S. dollars was about $10 trillion in 1940. In 1950, it had risen to about $18 trillion. After falling for a few decades, it began rising again in the late 1980s. In 2009, America’s debt was again up to $18 trillion. It is projected to continue to rise over the next few years. By 2011 it is projected to be about $20 trillion. The projected amount of American debt in the next few years equals 100 percent of the U.S. GDP.
Foreign Held Treasury Securities in U.S. Dollars

[riptide]

Well it is coming back to haunt everyone getting so closely intertwined in Europe. Billions being paid out to politicians in Europe as well as to the Governments in each country. If we do not help out Greece then all the Banks who have lent to them will not be repaid and we will have an economic crisis worse than before. Not sure where it is all going though, seems a complete mess.

[Old_Geezer]

I think it is well acknowledged that the US (or maybe it is their creditors) have a problem with debt, and show no desire to tackle it. It costs to be a world power with a massive military.

[rojash]

Em10, I'm not sure if the points you are making are aimed at my reply. If so, you should be aware that they have no relevance whatsoever to the points under discussion. I was not singing the praises of the US, nor claiming that it was debt free, or that it had an equitable society. Merely that most of it's states are more prosperous, and collectively wield more power than would have been the case if they had remained independent.

[Sqad]

I am confused.

If the Euro has such a dodgy future re. Greece, then why is it strong against the pound sterling?

Surely, the euro would depreciate against the pound with it taking such a verbal beating.

[ehtobel2]

Because YOUR PENSION is at risk.

UK banks (and others from the France, Germany, Austria, Switzerland, the US) have lend money to Greece. Any transfer payments to Greece are disguised rescue packages for RBS, Lloyds, Barclays et al.