Collapse of the euro

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helloggs
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Post by helloggs »

John S wrote: UK unemployment is low because like the US British jobs offer lower wages with fewer perks. Thus the cost to industry for labour is lower and business can afford to hire more. Ronald Reagan and Margaret Thatcher worked together in the '80s to break the power of the unions and create in both countries cheap dead-end service jobs. With high prices and interest rates, UK citizens, like their US counterparts rely heavily on credit cards to close the gap, placing everyone just a few paycheques away from bankruptcy. Yet, these facts are never published.
I wished that some Germans would think of this before they are going to give absolute majority this autumn to someone who could turn out to be a new iron lady, at least the polls are like that at the moment. My vote will certainly not go to Frau Merkel... :roll:
John S wrote: Attempts to liberalize the economies to create more of these jobs in Europe have failed. Not because of government policy but because the people, unlike those in the US and UK, refuse to accept these type of jobs. The Europeans have been unable to weaken the unions as the Americans and British have, thus the high cost of labour persists and thus high unemployment.
So what is the solution? Of course nobody can believe that Western Europe could compete with Chinese wages, they can't even compete with Polish ones... But almost 12% of people constantly being on the dole is something that no economy can afford for a longer period. (BTW I know that in the US unemployment rate is calculated in a different way and is not that low as it seems to be) In Germany, the alternative to that which is now propagandised is even increasing the wages to strengthen the domestic demand, because as you've said Germany is not having any problems with the export.

And the price increases are only in some branches connected with the Euro (here especially restaurants and services), but msot of the times due to other factors. And as already said, one should also keep in mind that even if a country has a low inflation it still is something between one and two percent, so since most people are comparing the pricing of today which those before the Euro they compare it with 5 year-old prices, so an increase of 10% is absolutely normal.
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Post by Tiverius »

This is for those who didn't believe (especially androl).
Image
All begin with euro (before euro,drachma was ocassionally attacked especially by George Soros,but we were selling all the dollar exchange we had thanks to tourism to keep our currency strong).At first they said eg 1.17 is not easy to deal due to "small coins" and the price went 1,20 to be easier.Then there was the oil raise.Prices went up again.Then they deal again with the "small coins" always to the upper 10 eurocent coin.When oil prices went down nothing happened!Last month the VAT went 19% from 18% so we should be ok with the european bank orders (aim was to keep our economy in the european standards and we have to find more income for the state).Already the deal with the "small coins" begun...
Unfortunately our goverment don't protect consumers or they do it in occasionally insidents.They believe in the "free trade and the laws of the free market and competition" while the gang of big companies make deals to change their prices at the same time.
I should also tell you that my annual income in 2003 was 10375,26 euros.In 2004 was 10999.90 (and of course I can prove that for those who don't believe it).And imagine this is not the lowest wage in the country.Most of Greeks at the moment survive with money from bank loans I can assure you.
Lower prices exist only in highly competitive sections of economy e.g. mobile phone providers,but not in food or clothing or housing.That's why tourism in Greece is decreased (even we organize excellent Olympic games,the arrivals decreased,never happened before to countries organized the games previously).We became expensive.
As Manic Street Preachers say,this is my truth,now tell me yours.
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Post by ART »

Tiverius wrote: All begin with euro
Inexact.
All begin with the substitution of the coins and notes of the states with those euro: October 28 2001, date of the first paper, the euro already existed. Euro has born in the 1999 establishing the fixed and irreversible changes with the statal currencies, and existing until from that year at all economic and financial effects. If the problems are begin in 2002 the responsible isn't the euro but the speculation: unjustified increase of the prices executed from the traders.
Last edited by ART on Tue Jun 14, 2005 7:49 pm, edited 2 times in total.
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Post by Pascal »

helloggs wrote:
John S wrote: UK unemployment is low because like the US British jobs offer lower wages with fewer perks. Thus the cost to industry for labour is lower and business can afford to hire more. Ronald Reagan and Margaret Thatcher worked together in the '80s to break the power of the unions and create in both countries cheap dead-end service jobs. With high prices and interest rates, UK citizens, like their US counterparts rely heavily on credit cards to close the gap, placing everyone just a few paycheques away from bankruptcy. Yet, these facts are never published.
I wished that some Germans would think of this before they are going to give absolute majority this autumn to someone who could turn out to be a new iron lady, at least the polls are like that at the moment. My vote will certainly not go to Frau Merkel... :roll:
John S wrote: Attempts to liberalize the economies to create more of these jobs in Europe have failed. Not because of government policy but because the people, unlike those in the US and UK, refuse to accept these type of jobs. The Europeans have been unable to weaken the unions as the Americans and British have, thus the high cost of labour persists and thus high unemployment.
So what is the solution? Of course nobody can believe that Western Europe could compete with Chinese wages, they can't even compete with Polish ones... But almost 12% of people constantly being on the dole is something that no economy can afford for a longer period. (BTW I know that in the US unemployment rate is calculated in a different way and is not that low as it seems to be) In Germany, the alternative to that which is now propagandised is even increasing the wages to strengthen the domestic demand, because as you've said Germany is not having any problems with the export.

And the price increases are only in some branches connected with the Euro (here especially restaurants and services), but msot of the times due to other factors. And as already said, one should also keep in mind that even if a country has a low inflation it still is something between one and two percent, so since most people are comparing the pricing of today which those before the Euro they compare it with 5 year-old prices, so an increase of 10% is absolutely normal.
I think, the solution is the following:
Let the fewest countries join the union that want to and that are accepted by the EU gouvernment.
But: import and employees from other countries have to be controlled and should pay high tolls for goods.
One big problem in Germany is, that so many people from Poland, Russia and Czechia just come over to Germany for work at very low gages. They reduce the prizes, but also they do not work as employees, they are enterprizers, or if not, they bring some of them along.
But this indeed is something, well, I don't like to talk about specific person, but e.g. our German Minister Mr. Fischer, ignores this.
I think you should be informed by the German or general news about this.
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Post by tabbs »

Pascal wrote:One big problem in Germany is, that so many people from Poland, Russia and Czechia just come over to Germany for work at very low gages. They reduce the prizes, but also they do not work as employees, they are enterprizers, or if not, they bring some of them along.
But this indeed is something, well, I don't like to talk about specific person, but e.g. our German Minister Mr. Fischer, ignores this.
I think you should be informed by the German or general news about this.
There is a huge difference between people from Poland or Czechia working in Germany, and people from Russia (or Ukraine, since you referred to Fischer) doing so: The former two are member states of the European Union, and basically every EU citizen can work wherever in the EU he or she wants. Now people from most new member states have a 2/3/2 year waiting period before they can seek employed work. The EU has never imposed such limitations before, but I suppose they were the prize of that "big bang" type enlargement.

So what Fischer may ignore or not does not have anything to do with the famous Polish plumber, for example. Sure, many from PL, CZ, etc. searched for and found loopholes, such as being self-employed in DE - which is a high economic risk nevertheless - or working for a domestic (say, Polish) company in a "host" country (say, Germany). The latter is a gray area indeed, but I suppose that doing something against it will be as difficult as finding illegal workers at a construction site ...

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Post by John S »

helloggs wrote:
I wished that some Germans would think of this before they are going to give absolute majority this autumn to someone who could turn out to be a new iron lady, at least the polls are like that at the moment. My vote will certainly not go to Frau Merkel... :roll:
Germany and Europe's problems are not based on the euro, but the refusal of the workers in some countries, like Germany and France, to accept lower paying jobs. Since 1990 and the opening up of the former communist world, the world economic markets have been thrown into a tizzy. While most of the world was cut off by the iron curtain, Western Europe, Japan, and North America enjoyed a properous symbiotic relationship.

The end of the communist system brought changes to the world's economies that no currency can eliviate nor increase the discomfort. One of these changes was a flood of cheap workers who were willing to work for much less then those in the west. Germany and most of Europe today refuses to accept this reality and think life can be like it was in the past. Forcing busineeses to continue to pay high salaries, generous vacations, free medical and dental care, life time unemployment benefits, trips to the spa when one has a sniffle, and much more is counter-productive considering business can find cheaper labour either next door or around the world.

Do the people of Germany and the EU understand this basic concept? What does the man on the street think is the solution? I mean a realistic solution and not pie in the sky.

So what is the solution? Of course nobody can believe that Western Europe could compete with Chinese wages, they can't even compete with Polish ones... But almost 12% of people constantly being on the dole is something that no economy can afford for a longer period. (BTW I know that in the US unemployment rate is calculated in a different way and is not that low as it seems to be) In Germany, the alternative to that which is now propagandised is even increasing the wages to strengthen the domestic demand, because as you've said Germany is not having any problems with the export.
First of all, one has to limit the amount of compensation one receives for being unemployed as well as the time limit. A person who is unemployed does not have the right to turn down work because the work is beneath them.

Germany should provide two calculations on unemployment, their normal method and one based on US rules. This way they could more fairly compare their with the US. They can also recalculate US unemployment using German rules and show Germans how the US rates when one compares data using the same criteria.
And the price increases are only in some branches connected with the Euro (here especially restaurants and services), but msot of the times due to other factors. And as already said, one should also keep in mind that even if a country has a low inflation it still is something between one and two percent, so since most people are comparing the pricing of today which those before the Euro they compare it with 5 year-old prices, so an increase of 10% is absolutely normal.
Everyone has price increases, even the US does. The prices of raw materials is high due to shortages. There are more and more people in the world consuming fewer and fewer resources, thus the prices rise everywhere. Much of it appears in the form of fuel costs.
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Post by Dakkus »

@John S:
The main difference between European and American thinking is in the way we think about the relation of a society and a human.
In USA the main thing is making everything as effective as possible, even if that means people living in inhuman conditions (read: slums). An American thinks it doesn't really matter that a certain amount of people are living very badly, as long as the society as whole is working as well as possible.
A European thinks slightly differently. For us the society exists to serve all people, not the other way around. That means it's often better being less effective and more happy and equal than squeezing all juice out of the society. The society exists to make people happy. People alone couldn't be as happy as they are when they're cooperating via a society, so making a society more efficient also makes its people happier.
However, that works only to some extent.
The more effective the society, the more happiness people must give away to provide the effectiveness.
In an American style effectiveness-is-everything society a person seems to give away two units of happiness to receive one and a half units of happiness through increased effectiveness.
The basic idea behind this is:
If a society is very ineffective, a person living in it gets back 1 unit of happiness per 0,2 units of given happiness, so making a society more effective is a very good idea.
But when more things that make the society effective are done, the measures left are harder and harder to achieve.
After a certain amount of effectiveness, bringing more effectiveness will start decreasing happiness and is actually a bad thing.

Even Europe seems to have a ratio of 1:1,2 or so, which is very stupid, because the society could bring the same level of happiness with less work, if it just understood the main point is happiness, not material wealthiness.

Okay, of course happiness is not something that is possible to measure with exact numbers. However, it's possible enough with a fuzzy logic. It's possible saying "we're giving more than we're getting" or "we're getting more than giving" or "we're getting as much as we are giving.
And yes, I've taken all of the numbers above from my head. Do not care about how much bigger than another number some number is. Only look at what number is bigger than another. I've done no scientific calculations for my numbers, they're all from what I happened to feel might be at least close to correct.
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Post by John S »

Dakkus wrote: The main difference between European and American thinking is in the way we think about the relation of a society and a human..
I agree with your analysis but apparently there are enough doubters in the world to see the American way as the way that creates the greater happiness. The EU needs to do a better job of advertizing its philosophy around the world, even in the US.

Europe must create doubt in the minds of investors that the american way does not create a long term greater properous life style for its people. It must also use more effective propaganda on its own people to get them to believe that Europe is on the right course and not the US or China.

It is a battle between the Europeans work to live and the Americans live to work philosopy that we are involved in. It can be effectively argued then that Europeans, despite some economic problems live better then Americans.
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Post by tabbs »

John S wrote:The EU needs to do a better job of advertizing its philosophy around the world, even in the US.
Since that kind of advertising does not even work in the EU, how can it work elsewhere? Or, put slightly differently, if the EU does not have a common or shared philosophy apart from "my country first, and no more compromises", as we just learned yesterday, how could it promote one in other countries?

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Post by John S »

tabbs wrote:
John S wrote:The EU needs to do a better job of advertizing its philosophy around the world, even in the US.
Since that kind of advertising does not even work in the EU, how can it work elsewhere? Or, put slightly differently, if the EU does not have a common or shared philosophy apart from "my country first, and no more compromises", as we just learned yesterday, how could it promote one in other countries?

Christian
OK, then let the individual countries do the advertising. The New York Times had an article today on the Summit between EU leaders. The negativity is expected in the US media as a unified, strong Europe is a challenge the US does not want to encounter.

Note the text below that I have placed in bold type. This is what the nations of the EU have to counter...that the EU economic practice of being a social practice is stuck in the past and the US/UK practice of profits first for the rich few is the future. It isn't that hard to do.

You offer your people a choice. An American type economy with many low paying jobs and plenty of debt, no benefits or perks, 18 h/day work at two jobs, low pay (that's why you need to work 18 h/day) or an EU type economy with higher wages, lifetime benefits, sensible working hours, etc. Then lay out the pluses and minuses of both. Then do whatever it takes to assure that type of lifestyle.


EU solidarity crumbles -- summit ends in failure
Lack of accord could affect union's foreign policy negotiations
Elaine Sciolino, New York Times

Sunday, 2005-06-19

Brussels -- Something shattered in Europe on Friday night.

The leaders of the 25 European Union nations went home after a failed two- day summit in anger and in shame, as domestic politics and national interests defeated lofty notions of sacrifice and solidarity for the benefit of all.

The battle over money and the shelving of the bloc's historic constitution, after the crushing "no" votes in France and the Netherlands, stripped away all pretense of an organization with a common vision and reflected the fears of many leaders as they face rising popular opposition to the project called Europe.

Their attacks on one another after they failed to agree on a future budget -- for 2007 through 2013 -- seemed destructive and unnecessary, and it is not at all clear that they will be able to repair their relationships. And even if they do, the damage to the organization will endure.

Most embarrassing for the European Union was an attempt by its 10 newest members to salvage the budget agreement late Friday night. They offered to give up some of their own aid from the union so that the older and richer members could keep theirs.

For the new members, that offer was an opportunity to prove their worth. Criticizing the "egoism" of countries driven by national interests, Prime Minister Marek Belka of Poland said, "Nobody will be able to say that for Poland, the European Union is just a pile of money."

But for the older members, it was a humiliation. "When I heard one after the other, all the new member states -- each poorer than the other -- say that in the interest of an agreement they would be ready to renounce part of the money they are due, I was ashamed," Jean-Claude Juncker, Luxembourg's prime minister and the outgoing European Union president, told journalists after talks collapsed.

Even as a number of leaders stated that the European Union is in one of the worst crises of more than half a century of European integration, none of them predicted its end. Certainly, it will have to continue to negotiate over money; and it can survive without a constitution using existing treaties.

But the crisis comes at a time when the European Union has begun to play a much more important role in the world, most visibly in negotiations over one of the most serious global security issues: Iran's nuclear program.

President Bush will welcome Juncker; Jose Manuel Barroso, the head of the bloc's administrative arm; and Javier Solana, its foreign policy chief, to the White House on Monday, and he will underscore the need for a strong Europe.

There have been other signs that the Bush administration has sought to work more closely with the European Union. It has begun to work with France, Germany and Britain on the European Union-led talks on Iran. On Wednesday, the United States and the European Union will hold a meeting of more than 80 countries in Brussels to help map out projects for Iraq's reconstruction.

Whether the crisis will affect the bloc's foreign policy remains unclear.

But the failure of the summit laid bare the deep divide within the European Union between two grand but competing visions of Europe.

Prime Minister Tony Blair of Britain leads the camp that wants a Europe with fewer trade and employment barriers and a more free-market orientation to better compete against rising giants like India and China. He rejected all criticism of Britain for vetoing the final agreement on the budget, which would have required Britain to reduce the annual rebate (now $6 billion a year) that it gets back from its contribution to the European Union budget.

By contrast, President Jacques Chirac of France and some of his allies are skeptical of what they call the "Anglo-Saxon model" and protective of the continental "social model" that offers citizens a protective economic security shield. He refused to compromise on Blair's demand that France reduce the $13 billion in annual farm subsidies it receives every year from the European Union.

Meanwhile, Blair, who assumes the six-month rotating European Union presidency next month, claims he will use the current crisis to push for what he believes are needed reforms.

"I'm not prepared to have someone tell me there is only one view of what Europe is and that's the view expressed by certain people at certain points in time," he told reporters Friday, in a clear reference to Chirac. "Europe isn't owned by any of them; Europe is owned by all of us."

In a BBC interview Saturday, the British foreign secretary, Jack Straw, said Britain hopes to "lead the debate" on the divided Europe, adding, "It is essentially a division between whether you want a European Union that is able to cope with the future or whether you want a European Union that is trapped in the past."

But the feelings against Britain among some other members are so raw that even Juncker, who is passionate about collegiality, said that he would "not be listening" when Blair outlines his priorities to the European Parliament next week. He said he would hand over the presidency "without comment and without advice, because clearly my advice is not appreciated."

Lost in Friday night's turmoil over the budget debacle was a joint communique issued by the leaders that their constitution could one day be implemented. It did not explain how, given the French and Dutch rejections and the requirement that all 25 countries ratify.

Before the referendums in both countries, there was widespread speculation that there could be a "Plan B" either to revise the current text or salvage the parts that are not objectionable to voters.

In announcing that the constitution would be put on hold so that it could be better understood, Juncker insisted that there would be no "Plan B." Instead, he told reporters Thursday night, "there is a Plan D -- for dialogue and debate."

That prompted jokes throughout the corridors of the conference building that the D in "Plan D" could stand for other things as well: defeat, denial and even death.
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Differance

Post by Guest »

[quote][/quote]

so how does that differ from before?[:? ]
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Post by zootharr »

John S wrote:The US is only interested in maintaining dollar hegemony so it can get as many goods and services for free. The euro threatens this plan and thus the US works hard to destabilize the euro and sows the seeds of negativity in Europe and around the world.
Exactly. If the UK (or Norway) would join the Euro, North Sea oil could eventually be traded in Euro. That's a good part of the European demand for oil.
This could possibly threaten the dollar hegemony because one day there might be an oil producing (e.g. Middle East) country selling its oil in Euro, for whatsoever reason.
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Post by lazza »

Wow, some interesting comments on the UK....
The UK was once a big empire that ruled over much of the world. That is long gone and they are nothing compared to who they once were. Those who are anti-EU and anti-euro are upset that the EU will someday rule over the UK instead of the other way around.
:?
Go to: http://finance.yahoo.com/currency

and you will notice that the three major world currencies are the US dollar, the euro and the Yen. The pound, Canadian dollar, australian dollar, Swiss France etc., are minor currencies. Wishful thinking on part of the British that if the euro collapses the pound will take its place and Britiain will become significant again.
:roll:
UK unemployment is low because like the US British jobs offer lower wages with fewer perks. Thus the cost to industry for labour is lower and business can afford to hire more. Ronald Reagan and Margaret Thatcher worked together in the '80s to break the power of the unions and create in both countries cheap dead-end service jobs. With high prices and interest rates, UK citizens, like their US counterparts rely heavily on credit cards to close the gap, placing everyone just a few paycheques away from bankruptcy.
8O
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