is italy next

[DrFilth]

front page of todays telegraph, only small article at the bottom of the front page

http://www.telegraph....-contagion-fears.html

when we all go bump who do we con to lend us some dosh

[emmie]

Portugal i thought was next. But it all looks quite shaky.

[DrFilth]

wish i had a better memory when i was at school we heard about the south sea bubble

now i can't remember if it was about fairy liquid or debt

[Gromit]

The Chinese.

[tigerlelly]

China, India or Brazil. We're still sending aid to two of them!

[starone]

How amazing that we are still sending aid to China which is the richest country in the world now that America are falling by the wayside. They should be helping us not the other way around - not that they would. It's dog eat dog and the devil take the hindmost.

[DrFilth]

should we increase the aid we send so that they will have more money to lend us

[jake-the-peg]

You seem to be labouring under the misapprehension that this is some sort of interest-free charity.

Understandable if you read the rabidly anti-EU press that want's to try and manipulate you.

Remember the Irish situation - Osbourne couldn't get over there with his cheque-book fast enough

In Ireland they were less pleased!

If I can borrow money at 3 % but my neighbour has to pay 25% and I lend him money at 15%

Am I really "bailing him out"?

[DrFilth]

was there not a problem of the intrest rate ie you must lend it at a lower rate

what happens when they can't pay

[DrFilth]

http://economicsnewsp...t-received-23572.html

[DrFilth]

some people

>>seem to be labouring under the misapprehension that we have some money << :)

[emmie]

How is it that whenever you say anything remotely negative about the EU, its always rabid anti europe, there are some good things being in EU, but much that is not. And people can make up their own minds i would have thought as to what to believe.

[rov1100]

It shows the state of the British £ when compared with the Euro we are like a sinking ship!

[New Judge]

You’ve not quite got hold of the right end of the stick, rov.

The pound has devalued against other major currencies (in particular the Euro) because that is the one of the two main mechanisms (the other being the manipulation of interest rates) used to attract inward investment when the economy slumps.

The UK has been able to use these tools to help stabilise and boost the economy. Those countries in the Euro zone cannot do this. They are stuck with “one size” interest rate and currency exchange rate which are generally set to suit the major economies of Germany and France. In the past countries such as Greece and Portugal would continually devalue their currencies to attract foreign investment and spending. Now they cannot do this and the pain they are enduring is obvious for all to see.

The simple fact is that the single currency project was an enormous folly driven by political ideology which set out to force a European monetary union which was doomed to fail. Such disparate nations as Greece and Germany cannot possibly function with common interest and exchange rates. The UK would be in a similar (if not worse) situation had we joined the Euro. The end game will be that the Euro will cease to exist in its current form. The likes of Greece and Portugal, probably Ireland and possibly Italy and Spain (the “PIIGS”) will have to leave the Euro and either set up their own single currency or revert to their individual currencies.

It will take far longer than it should for this to be forced principally because of the vanity of European politicians who refuse to admit their folly (of which they were adequately warned) in establishing the Euro. Meantime the damage done to the struggling Eurozone economies and those supporting them (including the UK) will be enormous.

Jake’s notion that it is somehow a profitable and viable business to lend to these nations is misplaced. The credit rating of two of them has been reduced to junk status and nobody in their right mind (and governments do not fit into this definition) would lend them a penny whatever the interest rate.

This is not my usual anti-EU rabidity. It is simple schoolboy economics (which, conveniently, is not taught in most State schools these days, so I am led to believe).