Britain ruled by banks? (Discuss)

The Greece problem hasn't gone away.

An OECD report, published last week and commissioned by the Greek government, says that their public administration as presently constituted is entirely incapable of implementing reform.

A way is going to have to be found to park them in some kind of reserve while they get themselves sorted out, no doubt with the help of outsiders. Don't ask me how that will work.
 
Grey, if we posit that the Chinese come galloping to the rescue on their little steppes ponies, can it still remain a Eurozone, once an outside 'sponsor' is in the mix? Aren't we just back to a free-for-all system? Or are there currently bans in place against this?
 
krizon said:
Grey, if we posit that the Chinese come galloping to the rescue on their little steppes ponies, can it still remain a Eurozone, once an outside 'sponsor' is in the mix? Aren't we just back to a free-for-all system? Or are there currently bans in place against this?
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I suppose their ponies would have to obey the rules of the road like anyone else.

Seriously though, I'm not sure I understand your question. Do you mean what happens if the Chinese start buying lots of euros to support the currency? I don't think there would be anything to prevent it, or anything seriously wrong with it, at least not in the short term. The fear would be that subsequently they might sell them in a hurry if things start to get unomfortable, which would be the last thing you'd want happening at such a time. They already have enormous holding of dollars and the Americans sometimes worry about that.

P.S. There are others on here more qualified than me to answer that sort of question
 
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You mean there's someone more qualified than you on here to answer it? :blink:

Yes, what happens if - as an example - China bought out (say) Greek banks and took out massive holdings in that country, and in due course decided it was in its interests to then dump the Euro and convert them into another currency? Would this not drive the country out of the Euro and into a form of financial statehood by proxy for China (or any other financier country)? It could call whatever shots it liked if it'd bought up enough, couldn't it?

Or is this something that's just not possible to do - and if not, why is it not?
 
It wont happen and doesnt make any sense why it should but simply dumping Greeks banks holdings of euros, doesnt change the nations currency at all.

If (and this is all a bit wild) they wanted to take Greece out of the euro and back to the dracma say, then all that would occur would be huge massive losses (the nations and banks liabilities to lenders would remain in euros) because given their economic paralysis, the new currency would be massively devalued

If this extremely unlikely scenario occurred (and god knows what constitutional hurdles there would be) China would have an extremely pissed off greek nation on its hands not just because they are totalitarian bullies but because they would make everyone potless overnight
 
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Ah, so! That'll do as an answer for me, it was just one of those little spin-off thoughts that wandered into my geriatric mind (in between knitting balaclavas for the boys on the Front).
 
I read a Bloomberg article a few months back that came up with a percentage figure of a 98% chance that Greece will default within 5 years, there is a good chance with repayment dates in 2012 it will be next year, however, it is Germany & France who have the biggest exposure with the UK in 3rd so I suspect it will be dragged out further unless civil unrest intervenes...

Maybe a default with the short term pain is their best option and many point to similarities with Argentina in 2001 but the difference is contagion is far more a matter with Greece than Argentina given the entire European region is at risk. e.g. if Greece goes then Italy & Spain will be on the brink.
 
Well I've done my bit for Euro relations, I've banned anything French from our Christmas table - couldn't find anything Lith-who-anian to take my displeasure out on.

MR2
 
Anyone know of any Lith-who-anian import I can cross off my Christmas list.

Mind you, a recording of their leader's rant might make a good ring/wake up tone.

MR2
 
EU demands £25bn lifeline from the UK

David Cameron will come under pressure today to resist demands to contribute more than £25 billion to a new eurozone bail-out.

By Tim Ross, and Bruno Waterfield

9:51PM GMT 18 Dec 2011


European finance ministers will aim to agree a new €200 billion (£167.7 billion) loan to the International Monetary Fund as part of a deal to save the single currency.

Three quarters of the money is expected to come from eurozone members, but Britain will also be asked to provide funds.

Figures suggest European Union officials expect British taxpayers to be the second largest contributor. The Prime Minister has repeatedly promised not to provide any extra funding for the IMF for the specific purpose of saving the euro and Britain is already liable for £12 billion of loans and guarantees to Ireland, Greece and Portugal.

Earlier this month, EU countries set today as the deadline to raise up to €200  billion in new loans for the IMF to deal with the eurozone crisis.

Finance ministers will hold a conference call in an attempt to reach agreement on the war chest.

An EU official said Britain was still expected to contribute €30.9 billion (£25.9 billion), leaving the country as the second biggest contributor to the new IMF fund behind Germany and equal with France.

Any suggestion that Britain will pay more towards the bailing out debt-ridden eurozone economies will cause anger among Tory Euro-sceptics, particularly if the eurozone nations do not pay their fair share.

The Treasury said the Chancellor would reject any fresh demands for a British contribution to a eurozone bail out.
However, a spokesman left open the possibility of a broader IMF deal being reached in future, involving other G20 countries.
The Treasury spokesman said: “As a long standing supporter of the IMF, Britain stands ready to increase IMF resources alongside other countries around the world in order to help any country in distress.
“But we will only provide more resources for the IMF if the eurozone do more to strengthen their firewall, and we will not contribute to anything that is only available to eurozone countries.
“Nor will we participate in an increase in IMF resources that only comes from EU countries without the participation of other G20 countries.”

Under IMF rules, Britain would underwrite a portion of loans to struggling countries, but only pay out if they defaulted. Only countries that are members of the IMF and contribute to its wealth can apply for loans.
The Prime Minister has argued that no country has ever lost money by lending to the IMF.
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Moving past the plainly mendacious headline, and the slanted presentation of the facts in the first few sentences, the part of this article (abridged by me) that has me scratching my head is the part I've highlighted in bold lettering.

Why will the UK refuse to participate in "anything that is only available to eurozone countries"? And why will it refuse to participate in any increase in IMF resources that comes from EU countries only?

Is it that the British government has believed all along that the euro is going to fail, and there is no point throwing good money after bad? Or are they saying that they don't have any more of a stake in saving the euro than the other G20 countries not in the eurozone?
 
Maybe a negotiating stance on behalf of the EU - ie UK will standby and watch the eu collapse if others don't pitch in, so start digging deep. Nobody will come away smiling if the eurozone fails.
 
It is one hell of a bluff if Cameron has to deliberately let megaphone diplomacy break out with some of the very people he is surreptitiously planning to help, and stand by while some of his compatriots get so annoyed that they are boycotting French products.
 
Frankly its the UK's money and if it is being used to bailed out failed economies, Cameron can say what the fuck he likes IMO. Lucky he isnt saying what many in the UK really (and rightly)think about the begging states isnt it?


It is probably more important to the uk than many other g20 countries that the euro survives given the credit exposure and level of exports to the zone but then again countries such as china and india certainly do not want to see a hefty downturn in demand in the coming months either. goes right across the board
 
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You seem to be sufering from the dillusion that the UK is a strong economy that can stand on its own two feet without international support. The UK's total debt to GDP ratio is not much different to Ireland's, just under 1000% as opposed to just over.
 
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oh so the Uk is being bailed out is it? Thats news to me

Well if the UK "cannot stand on its own two feet" then i think crap economies should piss off elsewhere with their begging bowls and give us a chance to recover.

And the uk is in such a state that clearly the bond markets have got it all wrong?
 
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If you consider taking loans to be begging then yes you are. You are getting the loans cheaper because the bond markets realise the international community cannot allow you to fail.
 
Melendez said:
If you consider taking loans to be begging then yes you are. You are getting the loans cheaper because the bond markets realise the international community cannot allow you to fail.
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Plus the UK and Us are printing the stuff as fast as the presses will allow!!
 
thats bollocks. Bonds are definately not traded on the basis of political considerations

There is a huge difference between taking out loans (which governments continually do) and an emergency bail out because the markets wont lend
 
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