Unfortunately, Britain staying out of the Euro is not going to save it.
The issue is not about donations to the EU/ Euro or even a backhander to the IMF, the reality is that british banks are once again up to the hilt with potentially bad debts, whilst they may not have directly taken the Greek debts, they have underwritten them to a staggering level.
Greece should never have been allowed into the EU, but being the massive ponzi scheme it is, they were allowed to enter the Union even though the EU members knew the financial records were highly suspect, but it was a massive ego boost to those people over in the continent, for they were on a mission to consolidate the whole continent.
Personally I for see big mess on the horizon, because this bailout will in no way satisfy Greece, they do not have the infrastructure in place to pay off the debts or even the interest and all it will take is a future government that decides it is NOT going to pay off the debts.
But until that time, the EU is going to keep loading money onto a horse that did not even run, if Greece had not joined the EU, then the problem would have been self limiting years ago, since if they had to get money from the international market, they would have been clamped down upon, a long time ago.
With friends like the EU , a country really does not need enemies.
What happened in US was unprecedented and unstopable but i believe that such thing is not going to happen due to crisis in Europe or due to default in Greece. Actually, i read an article in theEconomist that support the idea for Greece's default. The article argue (or show in histogram plot) that those countries that have defaulted have improved their growth after the default. Anyway, Europe is conservative and they will not let one or two nations destablize the whole zone.
I guess the Brits were right to stay out of the "Euro" issue. Too many complex cultural, moral, and geographical issues to sort through which makes the money mix a bad recipe .
This is an excellent article that points out many hidden flaws that are now coming to light. The U.S. recession helped start the domino effect throughout the world, but wasn't the cause of it. Too many countries and businesses relied on the U.S. too much. When the U.S. had a reality check and needed correction, the world felt it also. The EU has many internal issues that are now coming into the open. When you take a conglomerate of different cultures and corruption, and expect them to work together as a well oiled machine, there are going to be failures, sometimes catastrophic.
"The Greeks and the Spaniards want to continue living in a past where the government coddles them and where minimal tax is collected ... "
I think this would be true in any country. Don't pay taxes and get benefits.
I think that it was our (US) financial crisis which triggered the European. America stopped being a place where anything got sold. European revenues plummeted so the tax base. Domino effect pushed everything down. The states, which were already over their budget got quickly into real trouble.
I had heard the same thing. The problem in Greece is not just about taxes but about ending corruption and useless spending by the government. I loved your analogy of backbone vs. wishbone. I would hope that US companies rise up and try to use the cash they continue to horde to stimulate the economy when/if a second recession hits. The government cannot continue to spend dollars they don't have to bail out the country while individual companies sit on a trillion dollars in cash and equity. We need to hold all governments accountable for their spending and their policies, but we also need to hold ourselves accountable for what we do with our own budgets and resources.
The problem is not only about Greece, but also how viable of an entity is the EU.It is difficult to unify all of these European countries into one currency while letting them govern independently.Does the EU lend Greece additional mega-billions knowing full well that it may never (or a very, very long time) recoup the monies or does it let Greece default? I have heard many commentators state that the EU is a failed experiment and that it should be disbanded, although event that is extremely difficult to do as well.Not an easy time in our world, as well as domestically in the US.
@Ms.Daisy, good post, I was going to say something similar about how the US isn't all that different than the Greeks and Spaniards: we all want our debt and economy problems fixed without making any sacrifices. Raising taxes has been deemed simply "unacceptable" to Republicans, even if you're just talking about repealing the Bush tax cuts for the wealthy or the reduction of subsidiaries to oil companies.
Anyhow, Bolaji, I saw an article today which said that Greece is prepared to sell billions of dollars worth of state assets: real estate, airports, etc. Do you think this is a viable solution? I personally think that such moves won't hurt, but this problem is far too big to be solved by selling off some facilities. And I wonder if the US will ever get to this point?
The common denominator in the two words in the tittle is the bone and that is where the similarity ends. Your statement about the US, "the Federal Reserve have indicated they would not be injecting another round of fiscal stimulus into the system" helps to define the need for Americans to have the backbone to face whatever the second recession brings without whining. Just like the Greeks and Spaniards, we in the US depend on the wishbone to continue life as it was forgetting that the scenario has changed and the tensile strength of the wishbone cannot carry us through the painful austere measures that is needed to jump start the economy and move the country back to production of most of what we need (food, clothing, oil, housing materials etc) thereby reducing heavy dependency on foreign supplies while we live lavishly on borrowed money and time.
Its great that the high tech industries are cash rich and can dictate the tune. I hope all the law makers can take a peek at what the industry is doing differently to get the current result in a bad economy. Greek and Spanish paliamentarians as well as American legislators and the US President need to stand firm with strong backbones to let the populace really see the countries financies for what they are and stop borrowing.
When you are down in a hole you stop digging or you might be making your own grave.
EBN Dialogue enables and encourages you to participate in live chats with notable leaders and luminaries. Not only editors and journalists, but the entire EBN community is able to comment and ask questions. Listed below are upcoming and archived chats.
Archived Dialogues
Thailand Stages a Comeback Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Euro-Crisis: What It Means for High-Tech Firms Join EBN Editor in Chief Bolaji Ojo and Contributing Editor Jennifer Baljko on Thursday, July 12, at 10:00 a.m. EDT for a Live Chat on high-tech and Europe's economic difficulties.
Microsoft Surface: Potential Winners & Losers What are the implications for the electronics industry supply chain of Microsoft Corp.'s decision to launch its own tablet PC? Join industry veteran and EE Times' systems and OEM expert Rick Merritt on Tuesday, July 3, at 12:00 pm EDT for a Live Chat on this subject.
Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
While no one really can accurately predict the future, we can take guidance from another Drucker saying which is the best way to predict the future is to create it.
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
Where are these people? Are universities properly preparing the next generation supply chain professionals? How do train your existing workforce for these new, demanding positions?
Brian Fuller, editor-in-chief of EBN, will lead a 60-minute Avnet Velocity panel discussion that will ask and answer these and other questions swirling around today's supply-chain talent challenges.
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