I don't know how many in this forum are from europe. Most of users are from (North) America I think? Anyway... What do you think about european politics at the moment? Should other EU countries "save" countries like Greece or Portugal by lending money for them?
And what's situation in Belgium at the moment? Just noticed news that there haven't been a government in half year soon.
All kind of politic discussion about europe to this thread =)
I don't watch the news, so I've no idea what shenanigans they're up to now, but as a general, I support all sorts of co-operative actions between European countries as long as they're reasonable. A big group of people from all over Europe shouldn't be the ones to decide whether my town needs a new access road or not, but stuff like the judical system is something that can, should be, and has been merged into one big European pile in a lot of situations. I like that. Globalization is the future, and I can honestly see a Star Trek-like future before earth. Assuming we don't blow ourselves up.
That said, economics are always a tough question, though they are directly tied with globalization. The whole question surrounding it is "in the end, when all third world countries have been modernised, will there be enough resources and spread out work to support a decently rich lifestyle for everyone, or will some kind of inequality simply be required?". If it makes any sense, I'd like to try and work towards that goal to find out whether bailing out countries and the like is worth it.
The U.S. has been bailing out financials and hedge funds since the 80s; in fact, in the early 90s (91 or 92) systemic risk (too big to fail) was mentioned in passed FDIC legislation, and with the bail out of hedge finds in the later 90s, it created the problem of moral hazard. If companies think that they will be bailed out, they will take huge risks; what is there to loose? If they succeed, the turn around is huge, and if they fail, they will be rescued; that is exactly what happened in 2008 (with the exception of LB). I really hope the EU doesn't make our mistake; billions of tax payer dollars later, we have the same risk taking financial firms, and are setting ourselves up for a repeat of 2008, though this time the bubble will occur somewhere other than the mortgage market.
Actually, the EU's central bank has been much more reasonable than the U.S. Federal Reserve on these matters; Germany, post WWII, due in great deal to the hyper inflation of the 20s, had possibly the best centeral bank in the world (with New Zealand being the next best) until the EU. Luckly, you still have the German Banking mentality, and I really hope that doesn't go away. Bailing out a government's debt, or a firm's debt, might be a short run fix, but it is not sustainable in the long run. Letting Greek debt fail, and watching their government default will, in fact, be the best thing for the Euro, which is spiraling downward in value. My recommendation: let Greece fail, and set up clear standards for EU nations debt limit such that they do not run into solvency problems again. Greek fiscal policy is unsustainable, if you bail them out, they will continue the same failed policies, and in ten years time they will be at the ECB's door wanting another bail out. All that will do is redistribute the wealth of other Europeans into the hands of reckless spenders and unsustainable plans. Letting Greece fail will give them the opportunity to make the political changes needed to put the nation back on a sustainable path, which will, in the long run, make all of Europe better without redistributing any wealth.
I don't know how many in this forum are from europe. Most of users are from (North) America I think? Anyway... What do you think about european politics at the moment? Should other EU countries "save" countries like Greece or Portugal by lending money for them?
And what's situation in Belgium at the moment? Just noticed news that there haven't been a government in half year soon.
All kind of politic discussion about europe to this thread =)
They have to be bailed out really else the euro goes down the drain. Greece lied their way in so this situation should never have happened.
I don't watch the news, so I've no idea what shenanigans they're up to now, but as a general, I support all sorts of co-operative actions between European countries as long as they're reasonable. A big group of people from all over Europe shouldn't be the ones to decide whether my town needs a new access road or not, but stuff like the judical system is something that can, should be, and has been merged into one big European pile in a lot of situations. I like that. Globalization is the future, and I can honestly see a Star Trek-like future before earth. Assuming we don't blow ourselves up.
That said, economics are always a tough question, though they are directly tied with globalization. The whole question surrounding it is "in the end, when all third world countries have been modernised, will there be enough resources and spread out work to support a decently rich lifestyle for everyone, or will some kind of inequality simply be required?". If it makes any sense, I'd like to try and work towards that goal to find out whether bailing out countries and the like is worth it.
The U.S. has been bailing out financials and hedge funds since the 80s; in fact, in the early 90s (91 or 92) systemic risk (too big to fail) was mentioned in passed FDIC legislation, and with the bail out of hedge finds in the later 90s, it created the problem of moral hazard. If companies think that they will be bailed out, they will take huge risks; what is there to loose? If they succeed, the turn around is huge, and if they fail, they will be rescued; that is exactly what happened in 2008 (with the exception of LB). I really hope the EU doesn't make our mistake; billions of tax payer dollars later, we have the same risk taking financial firms, and are setting ourselves up for a repeat of 2008, though this time the bubble will occur somewhere other than the mortgage market.
Actually, the EU's central bank has been much more reasonable than the U.S. Federal Reserve on these matters; Germany, post WWII, due in great deal to the hyper inflation of the 20s, had possibly the best centeral bank in the world (with New Zealand being the next best) until the EU. Luckly, you still have the German Banking mentality, and I really hope that doesn't go away. Bailing out a government's debt, or a firm's debt, might be a short run fix, but it is not sustainable in the long run. Letting Greek debt fail, and watching their government default will, in fact, be the best thing for the Euro, which is spiraling downward in value. My recommendation: let Greece fail, and set up clear standards for EU nations debt limit such that they do not run into solvency problems again. Greek fiscal policy is unsustainable, if you bail them out, they will continue the same failed policies, and in ten years time they will be at the ECB's door wanting another bail out. All that will do is redistribute the wealth of other Europeans into the hands of reckless spenders and unsustainable plans. Letting Greece fail will give them the opportunity to make the political changes needed to put the nation back on a sustainable path, which will, in the long run, make all of Europe better without redistributing any wealth.