robinson
Forumer storico
Ultima modifica:
Titoli di Stato area Euro GRECIA Operativo titoli di stato - Cap. 2
- Creatore Discussione tommy271
- Data di Inizio
- Stato
giutrader
Forumer attivo
giub
New Membro
Io non la leggerei come una notizia positiva...
Se l'IIF arriva al punto di mendicare soldi da Brasile, Cina ed India...per rimandare il default della Grecia, vuol dire che anche loro pensano (o sanno) che l'UE si sta dirigendo verso la chiusura dei rubinetti e il default (controllato?) della Grecia...
Questa della IIF, come altre simili, sono operazioni che denotano una certa disperazione...
fabriziof
Forumer storico
forse fanno fuori berlusconi...figli di ...
perchè che cambia tra un mese?!
giub
New Membro
Quindi neanche gli USA sono riusciti a smuoverli...
Advice on Debt? Europe Suggests U.S. Can Keep It
http://www.nytimes.com/2011/09/17/b...clear-hurdles-to-latest-euro-rescue-plan.html
WROCLAW, Poland — The United States has long been considered a financial adviser to the rest of the world. But these days, American officials come carrying baggage.
Financial officials from the United States, once called “the committee to save the world” after the Asian crisis in the 1990s, now find themselves uttering apologies for the harm caused to the world by the 2008 financial crisis and coating their advice to European nations with the knowing nod of the battle-hardened.
The change in tone was on display here on Friday when Treasury Secretary Timothy F. Geithner made an unusual appearance at a meeting of euro zone finance ministries. Mr. Geithner had been invited to offer some advice on fixing Europe’s sovereign debt and banking problems.
European leaders, who have been slow to react to the root causes of the problem, emerged from the meeting dismissive of Mr. Geithner’s ideas and, in some cases, even of the idea that the United States was in a position to give out such pointers.
“I found it peculiar that, even though the Americans have significantly worse fundamental data than the euro zone, that they tell us what we should do,” Maria Fekter, the finance minister of Austria, said after the meeting Friday morning. “I had expected that, when he tells us how he sees the world, that he would listen to what we have to say.”
Such criticism was echoed by other attendees of the meeting, including the finance minister of Belgium, Didier Reynders, who said Mr. Geithner should listen rather than talk. Jean-Claude Juncker, president of the finance minister group, said European officials did not care to have detailed discussions about expanding their bailout fund “with a nonmember of the euro area.”
American officials are aware that they need to tread carefully when advising others, especially now, and they have avoided offering specific plans or proposals.
Instead, they point to recent programs in the United States simply as case studies. On Friday, Mr. Geithner, among other recommendations, encouraged the European leaders to add more firepower to their bailout funds, and described how the United States used leverage in 2008 to help bolster the markets.
The Treasury department said in a statement Friday that “Secretary Geithner encouraged his European counterparts to act decisively and to speak with one voice.” And a Treasury official said the department did not feel Mr. Geithner was rebuffed, because he did not have a specific agenda.
In the past, countries with financial problems have not always received the United States’ advice with open arms, at least until they needed financial support. Europe, analysts say, may never need outside support if its political leaders can find a way to use the wealth of nations like Germany to shore up more debt-troubled countries like Italy.
Still, it is hard to argue that the United States is not in a far weaker place to be doling out advice than it was in past crises, especially after the gridlock in August over raising the debt limit.
“We’re in a very different world environment right now,” said Ian Bremmer, president of Eurasia Group, a political consulting firm. “The United States has diminished credibility — it can’t simply tell Europe what to do. And it lacks the political will or means to throw a lot of cash at European troubles, even though they could become American problems very quickly.”
It was unusual for Mr. Geithner to attend an internal meeting of the 17 financial ministers from European Union countries that use the euro. The meeting was held on the first of two days of talks in Poland, and so far European finance ministers are no closer to overcoming the hurdles holding up the plan they developed for Greece back in July.
Mr. Geithner did not offer up a fully developed plan or urge one particular action. According to an American official who was not authorized to comment publicly, the Treasury secretary urged Europe to send a strong message to the market by putting up a large enough sum of money to support its debt-ridden nations and banks. He suggested that could be done through the use of borrowed money, as the United States did in some programs in 2008. One program, known as TALF, was meant to revive lending in the consumer and small-business markets.
“If you show the market that you have what it takes to stand behind your banks and stand behind your sovereigns, it will cost less in the end,” said Lael Brainard, under secretary for international affairs at the Treasury.
Some Europeans have expressed ideas similar to Mr. Geithner’s for a broader rescue plan. Still, the United States faces a different sort of audience when giving ideas to Europe than it does when facing officials in developing economies.
“In the 1990s, there were lots of countries that would say, that’s working in the United States, how can we copy that?” said Gary Gensler, who worked at the Treasury in the 1990s and now leads the Commodity Futures Trading Commission. “We’re still very much the leader in financial regulations and in the financial markets, but the 2008 crisis showed we failed. Our financial regulatory system failed and Wall Street failed.”
Some policy makers say the United States might even be wise to turn to China as a partner in persuasion.
“Maybe this should be a joint effort,” said Sheila C. Bair, a senior advisor at the Pew Charitable Trusts, who was the chairwoman of the Federal Deposit Insurance Corporation until this summer.
She said it would be helpful for China and the United States to give European leaders the same message. But, she said, referring to the United States’ financial crisis in 2008, “we certainly don’t have clean hands in all this.”
Countries with financial problems do not want outside advice until they need outside money, said Jeffrey Shafer, who was the under secretary for international issues at the Treasury in the 1990s. “There are different stages in this process, and Europe right now is kind of in a halfway house,” he said. “The reality is that you get more influence when you are providing support.”
It would be difficult for the Obama administration to persuade Congress to give loans to Europe, analysts say, but there are other options. The Federal Reserve can open its discount window to European banks or, as it has already done, it can use foreign exchange lines. The Treasury could also lend out money from a facility that helps with exchange-rate problems. Or the United States could promote additional aid from the International Monetary Fund.
Even if the United States offered more aid, it is unclear if Europe would want it. Edwin M. Truman, a senior fellow at the Peterson Institute who has worked with Mr. Geithner, said the United States had questions to answer, too. “It’s not just a question of being the scolding school teacher,” he said. “Geithner will also have to give a convincing story that we’re dealing with our problems.”
Advice on Debt? Europe Suggests U.S. Can Keep It
http://www.nytimes.com/2011/09/17/b...clear-hurdles-to-latest-euro-rescue-plan.html
WROCLAW, Poland — The United States has long been considered a financial adviser to the rest of the world. But these days, American officials come carrying baggage.
Financial officials from the United States, once called “the committee to save the world” after the Asian crisis in the 1990s, now find themselves uttering apologies for the harm caused to the world by the 2008 financial crisis and coating their advice to European nations with the knowing nod of the battle-hardened.
The change in tone was on display here on Friday when Treasury Secretary Timothy F. Geithner made an unusual appearance at a meeting of euro zone finance ministries. Mr. Geithner had been invited to offer some advice on fixing Europe’s sovereign debt and banking problems.
European leaders, who have been slow to react to the root causes of the problem, emerged from the meeting dismissive of Mr. Geithner’s ideas and, in some cases, even of the idea that the United States was in a position to give out such pointers.
“I found it peculiar that, even though the Americans have significantly worse fundamental data than the euro zone, that they tell us what we should do,” Maria Fekter, the finance minister of Austria, said after the meeting Friday morning. “I had expected that, when he tells us how he sees the world, that he would listen to what we have to say.”
Such criticism was echoed by other attendees of the meeting, including the finance minister of Belgium, Didier Reynders, who said Mr. Geithner should listen rather than talk. Jean-Claude Juncker, president of the finance minister group, said European officials did not care to have detailed discussions about expanding their bailout fund “with a nonmember of the euro area.”
American officials are aware that they need to tread carefully when advising others, especially now, and they have avoided offering specific plans or proposals.
Instead, they point to recent programs in the United States simply as case studies. On Friday, Mr. Geithner, among other recommendations, encouraged the European leaders to add more firepower to their bailout funds, and described how the United States used leverage in 2008 to help bolster the markets.
The Treasury department said in a statement Friday that “Secretary Geithner encouraged his European counterparts to act decisively and to speak with one voice.” And a Treasury official said the department did not feel Mr. Geithner was rebuffed, because he did not have a specific agenda.
In the past, countries with financial problems have not always received the United States’ advice with open arms, at least until they needed financial support. Europe, analysts say, may never need outside support if its political leaders can find a way to use the wealth of nations like Germany to shore up more debt-troubled countries like Italy.
Still, it is hard to argue that the United States is not in a far weaker place to be doling out advice than it was in past crises, especially after the gridlock in August over raising the debt limit.
“We’re in a very different world environment right now,” said Ian Bremmer, president of Eurasia Group, a political consulting firm. “The United States has diminished credibility — it can’t simply tell Europe what to do. And it lacks the political will or means to throw a lot of cash at European troubles, even though they could become American problems very quickly.”
It was unusual for Mr. Geithner to attend an internal meeting of the 17 financial ministers from European Union countries that use the euro. The meeting was held on the first of two days of talks in Poland, and so far European finance ministers are no closer to overcoming the hurdles holding up the plan they developed for Greece back in July.
Mr. Geithner did not offer up a fully developed plan or urge one particular action. According to an American official who was not authorized to comment publicly, the Treasury secretary urged Europe to send a strong message to the market by putting up a large enough sum of money to support its debt-ridden nations and banks. He suggested that could be done through the use of borrowed money, as the United States did in some programs in 2008. One program, known as TALF, was meant to revive lending in the consumer and small-business markets.
“If you show the market that you have what it takes to stand behind your banks and stand behind your sovereigns, it will cost less in the end,” said Lael Brainard, under secretary for international affairs at the Treasury.
Some Europeans have expressed ideas similar to Mr. Geithner’s for a broader rescue plan. Still, the United States faces a different sort of audience when giving ideas to Europe than it does when facing officials in developing economies.
“In the 1990s, there were lots of countries that would say, that’s working in the United States, how can we copy that?” said Gary Gensler, who worked at the Treasury in the 1990s and now leads the Commodity Futures Trading Commission. “We’re still very much the leader in financial regulations and in the financial markets, but the 2008 crisis showed we failed. Our financial regulatory system failed and Wall Street failed.”
Some policy makers say the United States might even be wise to turn to China as a partner in persuasion.
“Maybe this should be a joint effort,” said Sheila C. Bair, a senior advisor at the Pew Charitable Trusts, who was the chairwoman of the Federal Deposit Insurance Corporation until this summer.
She said it would be helpful for China and the United States to give European leaders the same message. But, she said, referring to the United States’ financial crisis in 2008, “we certainly don’t have clean hands in all this.”
Countries with financial problems do not want outside advice until they need outside money, said Jeffrey Shafer, who was the under secretary for international issues at the Treasury in the 1990s. “There are different stages in this process, and Europe right now is kind of in a halfway house,” he said. “The reality is that you get more influence when you are providing support.”
It would be difficult for the Obama administration to persuade Congress to give loans to Europe, analysts say, but there are other options. The Federal Reserve can open its discount window to European banks or, as it has already done, it can use foreign exchange lines. The Treasury could also lend out money from a facility that helps with exchange-rate problems. Or the United States could promote additional aid from the International Monetary Fund.
Even if the United States offered more aid, it is unclear if Europe would want it. Edwin M. Truman, a senior fellow at the Peterson Institute who has worked with Mr. Geithner, said the United States had questions to answer, too. “It’s not just a question of being the scolding school teacher,” he said. “Geithner will also have to give a convincing story that we’re dealing with our problems.”
sboom69
Forumer attivo
la situazione è disperata se non si chiude o chiarisce entro 2-3 settimane non so dove si arrivasi è discusso molto del buy-back, ma quanti di noi accetterebbero ?, sicuramente il livello cambia da persona a persona, io ho in carico la 08/2014 a 49.55 comprata nelle ultime settimane, se mi dessero 60 farei un gain del 20% e sopratutto sarei fuori dall'ansia e lo stress, ma solo diretto perchè la situazione è grave anche per altre cose, ma chi le ha in carico a 80/90/100 dovrebbe vendere in perdita o aspettare e rimanere hold out nella speranza del 100 + cedole, è una cosa difficile, ma teoricamente è una grossa opportunità per chi è entrato di recente molto basso
Io non la leggerei come una notizia positiva...
Se l'IIF arriva al punto di mendicare soldi da Brasile, Cina ed India
Questa della IIF, come altre simili, sono operazioni che denotano una certa disperazione...
ho fatto casino con il quota, in neretto grassetto la mia opinione risposta all'intervento di drbs315
Ultima modifica:
giub
New Membro
per gli appassionati della teoria dei giochi....l'Europa sulla china della gioco a somma negativa
Three Brief, Simple Comments on the Euro: Europe picks lose-lose
1. In 1860-4, 151 years ago, America fought a bitter bloody Civil War. During the war 625,000 persons died – more than all the U.S. deaths in World War I and II combined. The Civil War was not about abolishing slavery. It was about whether the individual States had the right to do whatever they wished, against the Federal constitution. The South lost, the North won. America remained one country with a clear set of rules. Never again was America’s existence questioned.
Europe is today undergoing the same crisis. It is not a Civil War but a financial one. Nobody is dying. All that is at stake is money. What Europe does today will determine its future for a century. The difference is, America had Lincoln, a strong and visionary leader, tough in war and forgiving in peace. Europe has no Lincoln. That may be the difference.
2. Here, in 144 words, is the euro problem. Greece cannot pay back what it owes. The proof: The ‘insurance’ premium on Greece’s short term debt (known as credit default swaps, CDS) is 98 per cent (you have to pay 98 euros to insure 100 euros of debt!). So it is clear that soon, Greece will be in default on its debt. It is paying 23 per cent interest to borrow, no country can afford to roll over debt at that rate. Who will bear the cost of Greece’s default? Not us, say many Germans. Not us, say private holders of Greek bonds. (ed i lettori di IO e FOL) And each day that passes without a solution, the costs to everyone mount. Europe is incapable of applying the American model (swallow the losses fast, clean up the mess and move on) and instead follows Japan (sweep the losses under the carpet and stagnate for 21 years as a result).
3. In the language of game theory, there are only two outcomes of the euro crisis. Win-win. Or Lose-lose.
* Lose-Lose. Greece is forced out of the euro zone, returns to the drachma, the drachma drops by half, and Greek banks and businesses are all bankrupt, because their old euro debt doubles overnight, in terms of drachma. (How many businesses, or governments, can have their liabilities double overnight and remain solvent?) This is what happened to Argentina in 2001. Nor will anyone lend to Greece for years – and you cannot do business without credit. Greek people lose all their savings. Greece’s GDP falls by 40 per cent. Greek unemployment soars from 16.6 per cent today to 45 percent. There is bloody social protest. Greece is a huge loser. But so is Europe. Frightened by Greece’s default, lenders bail out of Italy, Spain and Portugal, pushing those nations toward default as well. Italy is the 800-pound gorilla – its sovereign debt is massive. The Greek crisis raises interest rates in Europe, and hurts economies throughout the 27 EU (27 minus Greece) nations. Everyone loses, including America. Even China. Italy thinks China will ride to its rescue. Does anyone think it is more than ridiculous for an EU nation to ask China to bail it out?
* Win-Win. Europe wakes up. On one sheet of paper, Merkel writes down the total financial and economic costs of Greek default and exit from the Euro, for each of the 27 EU nations (including the 10 not in the euro currency zone), and for all taken together. This is , say, X trillion euros. She then writes down, on the same one sheet of paper, the total cost of PREVENTING this massive loss. This is, say, Y trillion euros. The exact numbers are imprecise, but it doesn’t matter. Because X is massively bigger than Y. The cost of dismantling the euro is massively bigger than the cost of saving it. Then Merkel, Sarkozy and others take the “Y” number, and split it up reasonably among the stronger European nations; a big European Stabilization Fund is mounted, so big that it might not even be needed, because its very existence shows currency speculators that betting against the Euro might cost them heavily.
Merkel then asks the German people: Do you want to invest 100 billion euros today? Or do you want to lose, say, 200 billion euros, in the coming years, because we failed to invest?
The current European rules of the game require unanimity of all 27 nations for a major decision. This is absurd. Little Slovakia, with 5 million people, can (and is) sabotaging key EU decisions for the benefit of over 500 million people. One percent of Europe is calling the shot! Suspend the rules, and move on! In 1860, America would have fallen apart if it had allowed Mississippi to veto anti-slavery laws.
Lose-lose or win-win. Which would you choose? Only in the Mideast do leaders actively and continually pick lose-lose. Europe seems about to join us. (l'autore è mediorientale...)
Three Brief, Simple Comments on the Euro: Europe picks lose-lose
Three Brief, Simple Comments on the Euro: Europe picks lose-lose
By Shlomo Maital
Abe Lincoln
1. In 1860-4, 151 years ago, America fought a bitter bloody Civil War. During the war 625,000 persons died – more than all the U.S. deaths in World War I and II combined. The Civil War was not about abolishing slavery. It was about whether the individual States had the right to do whatever they wished, against the Federal constitution. The South lost, the North won. America remained one country with a clear set of rules. Never again was America’s existence questioned.
Europe is today undergoing the same crisis. It is not a Civil War but a financial one. Nobody is dying. All that is at stake is money. What Europe does today will determine its future for a century. The difference is, America had Lincoln, a strong and visionary leader, tough in war and forgiving in peace. Europe has no Lincoln. That may be the difference.
2. Here, in 144 words, is the euro problem. Greece cannot pay back what it owes. The proof: The ‘insurance’ premium on Greece’s short term debt (known as credit default swaps, CDS) is 98 per cent (you have to pay 98 euros to insure 100 euros of debt!). So it is clear that soon, Greece will be in default on its debt. It is paying 23 per cent interest to borrow, no country can afford to roll over debt at that rate. Who will bear the cost of Greece’s default? Not us, say many Germans. Not us, say private holders of Greek bonds. (ed i lettori di IO e FOL) And each day that passes without a solution, the costs to everyone mount. Europe is incapable of applying the American model (swallow the losses fast, clean up the mess and move on) and instead follows Japan (sweep the losses under the carpet and stagnate for 21 years as a result).
3. In the language of game theory, there are only two outcomes of the euro crisis. Win-win. Or Lose-lose.
* Lose-Lose. Greece is forced out of the euro zone, returns to the drachma, the drachma drops by half, and Greek banks and businesses are all bankrupt, because their old euro debt doubles overnight, in terms of drachma. (How many businesses, or governments, can have their liabilities double overnight and remain solvent?) This is what happened to Argentina in 2001. Nor will anyone lend to Greece for years – and you cannot do business without credit. Greek people lose all their savings. Greece’s GDP falls by 40 per cent. Greek unemployment soars from 16.6 per cent today to 45 percent. There is bloody social protest. Greece is a huge loser. But so is Europe. Frightened by Greece’s default, lenders bail out of Italy, Spain and Portugal, pushing those nations toward default as well. Italy is the 800-pound gorilla – its sovereign debt is massive. The Greek crisis raises interest rates in Europe, and hurts economies throughout the 27 EU (27 minus Greece) nations. Everyone loses, including America. Even China. Italy thinks China will ride to its rescue. Does anyone think it is more than ridiculous for an EU nation to ask China to bail it out?
* Win-Win. Europe wakes up. On one sheet of paper, Merkel writes down the total financial and economic costs of Greek default and exit from the Euro, for each of the 27 EU nations (including the 10 not in the euro currency zone), and for all taken together. This is , say, X trillion euros. She then writes down, on the same one sheet of paper, the total cost of PREVENTING this massive loss. This is, say, Y trillion euros. The exact numbers are imprecise, but it doesn’t matter. Because X is massively bigger than Y. The cost of dismantling the euro is massively bigger than the cost of saving it. Then Merkel, Sarkozy and others take the “Y” number, and split it up reasonably among the stronger European nations; a big European Stabilization Fund is mounted, so big that it might not even be needed, because its very existence shows currency speculators that betting against the Euro might cost them heavily.
Merkel then asks the German people: Do you want to invest 100 billion euros today? Or do you want to lose, say, 200 billion euros, in the coming years, because we failed to invest?
The current European rules of the game require unanimity of all 27 nations for a major decision. This is absurd. Little Slovakia, with 5 million people, can (and is) sabotaging key EU decisions for the benefit of over 500 million people. One percent of Europe is calling the shot! Suspend the rules, and move on! In 1860, America would have fallen apart if it had allowed Mississippi to veto anti-slavery laws.
Lose-lose or win-win. Which would you choose? Only in the Mideast do leaders actively and continually pick lose-lose. Europe seems about to join us. (l'autore è mediorientale...)
Ultima modifica:
giub
New Membro
analisi de L'ECONOMIST The costs of break-up: After the fall | The Economist
The costs of break-up
After the fall -The aftermath of disaster is all the more frightening for being incalculable
Sep 17th 2011 | from the print edition
THE costs of efforts to save the euro are justified by the claim that the alternative would be too dreadful to contemplate. But economic history is littered with examples of fixed exchange rates that came unfixed; the disuniting of currency unions, though rarer, happens from time to time. So how do the costs of sustaining the euro compare with the costs of its falling apart?
The question does not have a simple answer. For a start, there are lots of different ways to fall apart: a wholesale dissolution into the original currencies; a fissioning into northern hard-currency and southern soft-currency blocks; or the exit of a trickle of countries, or just one. Further complexities come from the panoply of choices the departing and remaining states would make after the fall. And all this turns as much or more on law and politics as on economics.
Take two specific scenarios. Germany could leave, either on its own or with a select group of small economies—Austria, Finland and the Netherlands—as recently suggested by Hans-Olaf Henkel, a former head of the Federation of German Industries. Second, and more likely, Greece might secede or be forced out.
In each instance, the economic consequences could be devastating, argue many analysts. If Germany were to leave, its Neue Deutschmark would soar as international funk money piled into a bigger, better Switzerland, and German manufacturing firms would suffer. German banks could cope with the switch of domestic deposits and loans into the new currency, but they would have to be recapitalised because their foreign assets in euros would now be worth less in domestic terms.
If Greece were to leave, its reborn drachma would plummet—which might be good for its exporters but which would trigger what Barry Eichengreen, a monetary historian at the University of California, Berkeley, has called “the mother of all financial crises”. The devaluation of the drachma against the euro would turn any debts that remained in euros into a crippling burden. At the same time depositors, who are already edging towards the exit, would break into a headlong rush, bringing down Greece’s banking system.
A recent study by economists at UBS, a Swiss bank, suggested that the costs in each of these eventualities would be forbiddingly high. If Germany were to leave, it would incur costs worth 20-25% of GDP in the first year and then roughly half that amount in each subsequent year. If Greece were to quit, the first-year cost would be 40-50% of GDP, and subsequent annual costs would be around 15%.
Such costs dwarf the one-off expense to Germany of bailing out Greece, Ireland and Portugal were they to default. But the report is based on the extreme assumption that countries leaving the euro would have to leave the EU. There is a legal argument for this position, but politics would almost surely trump it. It would not be in the broader interest of Europe to have an embittered neighbour in the eastern Mediterranean, or to cut Germany adrift. European policymakers would be hellbent to conserve the single market rather than immolate it in the bonfire of the euros. This suggests that the economic impact of a break-up would be less catastrophic than envisaged by the UBS economists.
Don’t cry for me, Athena
What of the lessons of history? Currency unions tend to collapse as part of a broader political break-up. The rouble area did not long outlive the Soviet Union; the monetary union of the Czech Republic and Slovakia lasted only a matter of weeks. Such situations do not offer obvious parallels. But there may be an instructive precedent for Greece in Argentina’s severing of the peso’s link with the dollar during the debt and currency crisis of late 2001 and early 2002. Argentina had established something close to a monetary union with the United States in 1991 when it fixed its currency to the dollar, backing the link through the foreign-exchange reserves of a currency board. Its experience in the ensuing decade was disconcertingly similar to Greece’s after it joined the euro in 2001. Both countries initially thrived but suffered a deterioration in competitiveness and in their public finances. The recent plunge in the Greek economy echoes the one in Argentina before it defaulted on its debt and devalued.
That crisis was bloody, including limits on bank withdrawals—the corralito—and big losses for depositors and banks as their assets and liabilities were redenominated, each at a different exchange rate, but it proved to be a turning-point (see chart). After a further slide in output Argentina grew by 9% in 2003, and carried on at around that rate until checked by the financial crisis of 2008 and global recession of 2009 (it is currently growing at close to 10%). The resurgence in national prosperity, helped by booming global demand for agricultural commodities, has occurred despite the fact that rancorous disputes over the default have kept the country shut out of international capital markets.
That may appear an encouraging portent for Greece, if it were forced to leave the euro. Rather than the protracted process of forcing down wages to regain competitiveness, the devaluation would be a prompt remedy. Moreover, the vast bulk of Greece’s bonds are written under local law, which gives it a more-or-less-free hand to impose a much bigger haircut than the trim being planned. That will no longer be the case if the currently proposed debt exchanges go through; the new contracts, written under English law, protect investors a lot more.
But the Argentine precedent shows just how savage the crisis can be; massive social unrest, a sequence of toppled presidencies, and so on. And Greece’s crisis would be worse. For one thing, the distortions, such as a burgeoning current-account deficit, that Greece allowed to build up in the good times far exceeded Argentina’s. And on top of blocking bank withdrawals and imposing capital controls Greece would also face the massive problems of introducing a new currency in the form of new coins and notes and procedures. Everything from computers to parking meters would need to be recalibrated; a thousand new hassles would make an already dire situation worse.
But the real worry, for investors and European leaders alike, is that a Greek departure could trigger panic elsewhere, with runs on banks in Portugal and Ireland and maybe Italy and Spain. Greece is far more fully integrated into the rest of Europe’s finances than Argentina was into anyone’s. Though the euro area may have proved a disappointment in economic integration, financial integration has gone apace—which now proves the opposite of a consolation. The euro zone offers scope for contagion, and confusion, on an epic scale. That is what makes its crisis so troubling—and so hard to treat.
The costs of break-up
After the fall -The aftermath of disaster is all the more frightening for being incalculable
Sep 17th 2011 | from the print edition
THE costs of efforts to save the euro are justified by the claim that the alternative would be too dreadful to contemplate. But economic history is littered with examples of fixed exchange rates that came unfixed; the disuniting of currency unions, though rarer, happens from time to time. So how do the costs of sustaining the euro compare with the costs of its falling apart?
The question does not have a simple answer. For a start, there are lots of different ways to fall apart: a wholesale dissolution into the original currencies; a fissioning into northern hard-currency and southern soft-currency blocks; or the exit of a trickle of countries, or just one. Further complexities come from the panoply of choices the departing and remaining states would make after the fall. And all this turns as much or more on law and politics as on economics.
Take two specific scenarios. Germany could leave, either on its own or with a select group of small economies—Austria, Finland and the Netherlands—as recently suggested by Hans-Olaf Henkel, a former head of the Federation of German Industries. Second, and more likely, Greece might secede or be forced out.
In each instance, the economic consequences could be devastating, argue many analysts. If Germany were to leave, its Neue Deutschmark would soar as international funk money piled into a bigger, better Switzerland, and German manufacturing firms would suffer. German banks could cope with the switch of domestic deposits and loans into the new currency, but they would have to be recapitalised because their foreign assets in euros would now be worth less in domestic terms.
If Greece were to leave, its reborn drachma would plummet—which might be good for its exporters but which would trigger what Barry Eichengreen, a monetary historian at the University of California, Berkeley, has called “the mother of all financial crises”. The devaluation of the drachma against the euro would turn any debts that remained in euros into a crippling burden. At the same time depositors, who are already edging towards the exit, would break into a headlong rush, bringing down Greece’s banking system.
A recent study by economists at UBS, a Swiss bank, suggested that the costs in each of these eventualities would be forbiddingly high. If Germany were to leave, it would incur costs worth 20-25% of GDP in the first year and then roughly half that amount in each subsequent year. If Greece were to quit, the first-year cost would be 40-50% of GDP, and subsequent annual costs would be around 15%.
Such costs dwarf the one-off expense to Germany of bailing out Greece, Ireland and Portugal were they to default. But the report is based on the extreme assumption that countries leaving the euro would have to leave the EU. There is a legal argument for this position, but politics would almost surely trump it. It would not be in the broader interest of Europe to have an embittered neighbour in the eastern Mediterranean, or to cut Germany adrift. European policymakers would be hellbent to conserve the single market rather than immolate it in the bonfire of the euros. This suggests that the economic impact of a break-up would be less catastrophic than envisaged by the UBS economists.
Don’t cry for me, Athena
What of the lessons of history? Currency unions tend to collapse as part of a broader political break-up. The rouble area did not long outlive the Soviet Union; the monetary union of the Czech Republic and Slovakia lasted only a matter of weeks. Such situations do not offer obvious parallels. But there may be an instructive precedent for Greece in Argentina’s severing of the peso’s link with the dollar during the debt and currency crisis of late 2001 and early 2002. Argentina had established something close to a monetary union with the United States in 1991 when it fixed its currency to the dollar, backing the link through the foreign-exchange reserves of a currency board. Its experience in the ensuing decade was disconcertingly similar to Greece’s after it joined the euro in 2001. Both countries initially thrived but suffered a deterioration in competitiveness and in their public finances. The recent plunge in the Greek economy echoes the one in Argentina before it defaulted on its debt and devalued.
That crisis was bloody, including limits on bank withdrawals—the corralito—and big losses for depositors and banks as their assets and liabilities were redenominated, each at a different exchange rate, but it proved to be a turning-point (see chart). After a further slide in output Argentina grew by 9% in 2003, and carried on at around that rate until checked by the financial crisis of 2008 and global recession of 2009 (it is currently growing at close to 10%). The resurgence in national prosperity, helped by booming global demand for agricultural commodities, has occurred despite the fact that rancorous disputes over the default have kept the country shut out of international capital markets.
That may appear an encouraging portent for Greece, if it were forced to leave the euro. Rather than the protracted process of forcing down wages to regain competitiveness, the devaluation would be a prompt remedy. Moreover, the vast bulk of Greece’s bonds are written under local law, which gives it a more-or-less-free hand to impose a much bigger haircut than the trim being planned. That will no longer be the case if the currently proposed debt exchanges go through; the new contracts, written under English law, protect investors a lot more.
But the Argentine precedent shows just how savage the crisis can be; massive social unrest, a sequence of toppled presidencies, and so on. And Greece’s crisis would be worse. For one thing, the distortions, such as a burgeoning current-account deficit, that Greece allowed to build up in the good times far exceeded Argentina’s. And on top of blocking bank withdrawals and imposing capital controls Greece would also face the massive problems of introducing a new currency in the form of new coins and notes and procedures. Everything from computers to parking meters would need to be recalibrated; a thousand new hassles would make an already dire situation worse.
But the real worry, for investors and European leaders alike, is that a Greek departure could trigger panic elsewhere, with runs on banks in Portugal and Ireland and maybe Italy and Spain. Greece is far more fully integrated into the rest of Europe’s finances than Argentina was into anyone’s. Though the euro area may have proved a disappointment in economic integration, financial integration has gone apace—which now proves the opposite of a consolation. The euro zone offers scope for contagion, and confusion, on an epic scale. That is what makes its crisis so troubling—and so hard to treat.
PASTELLETTO
Guest
Questo mi era sfuggito, da oggi la Merkel mi sta un po' più simpatica, ha tirato fuori il suo lato tenero.
[ame="http://www.youtube.com/watch?v=SaO2oiDwWpk"]La Merkel risponde a Berlusconi- l'Unità.mp4 - YouTube[/ame]
Un attimo, apprendo adesso che i sottotitoli sono fatti x satira, magari qualcuno che parla il tedesco può confermare.
[ame="http://www.youtube.com/watch?v=SaO2oiDwWpk"]La Merkel risponde a Berlusconi- l'Unità.mp4 - YouTube[/ame]
Un attimo, apprendo adesso che i sottotitoli sono fatti x satira, magari qualcuno che parla il tedesco può confermare.
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amorgos34
CHIAGNI & FOTTI SRL
Ciao,
leggo sempre più forumer che pensano a questa come soluzione.
Vi chiedo:
voi sareste disposti a buybackkare (Accademia della Crusca perdonami
) "agli attuali prezzi"?Sono convinto di no, altrimenti avreste venduto ieri.Si potrebbe alzare un po' la quotazione, ma ci sarebbe sempre qualcuno non sufficientemente contento.
Ricordo che , comunque, se il buyback fosse coattivo, sempre di dflt (in senso tecnico) si tratterebbe.(se ne è parlato all'iniziodell'estate)
Mi auguro che si arrivi allo swap e poi si dia (dietro vere privatizzazioni e tagli) la possibilità ad Atene di tornare a crescere.
Senza ritorno quasi immediato alla crescita la dracma (non penso che la Grecia possa stare nell'Euro se fa dflt,non le conviene) è già pronta.
La lezione greca tra le altre cose deve insegnare alle istituzioni europee, che è interesse sistemico che non solo i conti di uno Stato pericolante siano in ordine , ma COME tale Stato riporta i conti in ordine.
Se lo fa con tagli strutturali ok, se invece alza le tasse (magari partendo dall'IVA al 21%...) i conti saranno in ordine , ma si può innescare una spirale recessiva senza fine.
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