Troubled Euro is a good lesson for Asian common currency

[Hezam]

But EU ministers offer 500bn-euro plan to support currency

yeah,even if it's late but they did the right thing.

Japanese policy makers as well as Asian leanders should have a close look at the experiment of "common currency" and the results (but not yet).

agreed.

by the way,Arab Gulf countries leaders are trying to create a unit currency but two of these countries still disagreed ( Oman and UAE )....maybe this is a good lesson for them too ?

 

[Astroboy]

by the way,Arab Gulf countries leaders are trying to create a unit currency but two of these countries still disagreed ( Oman and UAE )....maybe this is a good lesson for them too ?

From Greek crisis lesson, I believe that common currency will not work unless participant countries abondon their sovereignty. In other words, If they want to keep sovereignty, common currency will not work out.

 

[hsakakibara1]

Yes I undersand but don't agree. I am currently in the US and I must say that things are deteriorating very fast. I myself am planning toleave this year. Most people are way over their heads in loans. Young people graduate from college and are unemployed for at least one year, and even after that are lucky to get a job at fast food restaurants. I am here and see what is going on first hand. It is very frightening.

Yes, Americans are very patriotic but many are leaving. Especially those that were from other countries, like Europeans.

 

[gaijinalways]

Must be that Japanese air! Amazing conversation Astroboy and Hezam (primarily) have been having; amazing in that a lot of conclusions are based on nothing but air.

First off, Greece, and to some extent Portugal, Spain,and Italy, are in debt mostly because they borrowed money for speculative property purchases. The US ecnomy going into a recession is not the cause of their woes.

I personally believe it was a mistake to bail out Greece, they should have been temporarily kicked out of the EU and allowed back in when they got their house in order. If you look at the situation, to some extent the US is paying for the bailout as the IMF, of which the US is a paying member, was involved in the bailout. It wasn't a simple thing, so of course a decision is not going to be made over night.

It seems you two very quickly forgot the Asian crisis that came through. One currency or not, many national economies are affected by the tumbling of one trading partner, as you saw when the Thai, S. Korean and to some extent Vietnamese, Hong Kong, and Singaporean economies were affected in '97-98 (and no, Greece's terms are hardly lenient).

Japan does have some problems when you look at the prices its citizens pay for things. The distribution system is very antiquated, and there are many protected markets. It's not surprising that the EU would argue that if Japan wants full access to the EU market, they should open their market too.

 

[Astroboy]

The distribution system is very antiquated, and there are many protected markets. It's not surprising that the EU would argue that if Japan wants full access to the EU market, they should open their market too.

I think it's the other way around. And because EU market is highly protectionalism, Club Med countries lost competitive edge and are falling. Those countries are not capable to export, but being good at enjoying European dream - wine & pasta.

BTW, the question is NOT "Will the Euro Survive"? The Times & The Sunday Times, but "WHEN the Euro End"?

 

[gaijinalways]

"When will the Euro End?"

It won't, keep dreaming.

Protected markets, you must be kidding right? You never wondered why imported rice is sometimes 12x more in Japan?

 

[Astroboy]

"It won't, keep dreaming." ?

Somebody of Europe said "The death of the European dream".
Financial Times

Protected markets, you must be kidding right? You never wondered why imported rice is sometimes 12x more in Japan?

I suggest you to behave more academic if you want to be persuasive.

Bertin MARTENS (Deputy Chief Economist, DG Trade, European Commission) said:
EU-Japan trade relations have been very active for many years. There has been a dialogue between Japan and the EU on regulatory issues in this regard. Regulatory issues, or non-tariff measures (NTMs), were focused on rather than tariffs in this report because tariffs are generally very low between Japan and the EU.
RIETI - Barriers to trade between the EU and Japan

 

[ghdfans2010]

very good!Congratulation on bail-out agreement under the "beautiful EU flag".

 

[Astroboy]

Europe heads for Japanese irrelevance

The European Commission president talked about Europe as a global leader. He called it a key ambition for this generation of politicians. My sense is of a continent slipping into a small-power future.....

Japan remains an economic powerhouse. Yet it has long been more or less invisible in debates on world affairs, meekly accepting the role of a taker, rather than a shaper of change.....

This leaves the US and China as the pivotal players in moulding the new global order – or, as it might turn out to be, disorder.
Subscribe to read | Financial Times

I thought Europe follows Japan's Zombie economic path, but I didn't know that Europe follows Japan in terms of global issue discussion. Either way, I think that Japan's path will be good for European. Nothing wrong.

 

[hsakakibara1]

I thought Europe follows Japan's Zombie economic path, but I didn't know that Europe follows Japan in terms of global issue discussion. Either way, I think that Japan's path will be good for European. Nothing wrong.

I agree 100%. I am worried more about USA. The sh*t will hit the fan early nexxt year I believe.

 

[Astroboy]

Greece rules out possibility of default
Finance minister says restructuring would 'break' eurozone
http://edition.cnn.com/2010/BUSINESS/09/15/greece.default.eu.ft/index.html

This means Default of Greece will lead to Collapse of Euro, and thus if EU wants to keep euro, European people need to rescue Greek by using their money. Seems to be Tough choice.

 

[Astroboy]

* Irish bond yield spreads at euro lifetime high
* Portuguese/German spread close to euro lifetime high
EURO GOVT-Bunds outperform Irish debt on bank worries

Downgrade of "Anglo"-Irish Bank is likely to trigger Irish crisis. Following Greek crisis, EU tight-knit flag will be tested soon again.

 

[Hezam]

A British bank moved to Hong Kong few days ago,It seems like a good idea for some other banks in UK.
By the way,China is playing dirty with it's currency Lol.

 

[Astroboy]

Ireland has been widely praised for the austerity measures it is undertaking to cut the deficit and get on top of its public debt. However, economists are now questioning whether – given the austerity measures and the size of the banking crisis – Ireland will be able to pay its debts.
http://www.telegraph.co.uk/finance/...eland-IMF-bail-out-rumours-spook-markets.html

That's why I said. Don't listen to IMF as their advice is not trustable, but Learn fron Japanese lesson. Probably they cannot read Japanese text.

A British bank moved to Hong Kong few days ago,It seems like a good idea for some other banks in UK.
By the way,China is playing dirty with it's currency Lol.

HSBC was established in HK, and moved to London when HK was returned to China in 1997. So, it's just a return to their birth place.

 

[Astroboy]

ECB steps in to stabilise Irish bond markets
The European Central Bank intervened to stabilise the Irish bond markets on Friday after a report by a leading UK bank triggered investor fears that the country might turn to the international community for a multibillion-euro bail-out.
Subscribe to read | Financial Times

Oh dear .... although I have no ideas about share of Irish sovereign bond holders, this development will cause more mess in EU, but I am sure that it is possible to share the pain among EU as they are "Pan-Europe".

 

[Astroboy]

French, Germans See Euro as `Bad Thing' Amid Crisis, Poll Shows
Fifty-five percent of Europeans voiced negative sentiments about the currency, led by a 60 percent disapproval rate in France and 53 percent in Germany, according to a poll released today by the German Marshall Fund of the United States and the Italian foundation Compagnia di San Paolo.
Bloomberg - Are you a robot?

Interesting article. Reality is not like what they say. Japanese politicians, thinking of Asian common currency, should heed from European lessons.

 

[Astroboy]

Eurozone debt crisis fears ease
Subscribe to read | Financial Times

Good News from Europe
European financial problems must be solved by Eurozone countries, not investors. If EU goes bail-out of Ireland, EU members' governments should share the pain .... meaning that taxpayers of Northen European should bear the cost.... Not us.

 

[Astroboy]

Europe's bad debt 'dominoes'?
The financial woes of the Irish Republic have renewed concerns about Europe's other highly indebted countries.
Europe's bad debt 'dominoes'?

Austerity measures in the midst of recession after bubble burst is wrong as it worsen national debt per GDP. PIIGS countries are falling down into the hands of IMF or EU rescue package. And at the end of day, northern European countries typically Germany will need to undertake the debts.
There is no way-out for Euro system. Japanese policymakers, considering Asian common currency, should look at the reality.

 

[abdalrasyid]

very useful and interesting information Astra, i thank you.

 

[Astroboy]

Until Ireland joined euro-system, Ireland was a currenct-account surplus country because ... they could have boosted export using cheaper own currency when it was at current-account deficit, and they could have invited foreign capitals using lowering corporate tax when it became a current-account surplus country, while their own currency soared against other currencies.

However, when Ireland became a part of euro-zone, regadless of ehtier current-surplus or current-deficit, or regardless of either trade-surplus or trade-deficit, capitals flooded into Ireland from France, Germany, USA, UK, and other northern European countries .... because foreign investors didn't need to consider risks of chainging foreign exchange rate anymore under euro-system.

As a result, Irish economy entered into property bubble and burst. Very simple logic.

Thus, Irish and Greek style bail-out will continue until all PIIGS countries' debt problems are solved, and at the end of day, Germany, France, Holland and other northern European countries will be troubled with Super-Debt problems.

Irish EU bailout may not stop Portugal follow-up
Analysis: Irish EU bailout may not stop Portugal follow-up

 

[Astroboy]

Why the eurozone will survive
Subscribe to read | Financial Times
The article says ...

the eurozone is the product of a process of European integration that began in the aftermath of the second world war. Even for today's leaders, this remains an existential project, even though the memories of the war have faded in their populations. Moreover, the premise that economic integration would create powerful interests for its perpetuation has also proved correct. ....

But at the same time, Greek Bondholders Face 50% Loss in Restructuring, Investors Say Bloomberg - Are you a robot?

In short, eurozone will survive ... if investors (mostly, UK, German, French, Dutch, etc.) undertake debts of the south.

But as somebody said, Love may come and go, but greed is eternal... or Love lasts as long as money endures.... I think.

 

[Astroboy]

Interesting graphs from FT.

During brisk economic period, PIGS countries did not increase Public Debts (government debts) ... because Private Sector increased Debts as economy was brisk (in other words ... Bubble economy). Thanking to the growing private sectors' debts, their national economies posted growth (aka GDP growth).

Private sector debt in Ireland reached 200% of its GDP, followed by Spain, Portugal and Greece. Private sectors of those countries are now rushing to repay, otherwise their will go bankrupt. In such a case, IMF, ECB and German government push PIGS governments to cut Public spending.

I think IMF, ECB and Germany do not understand macro-economics and Japanese lessons ... as the result is obvious .... social unrest in those countries.

 

[EmperorHirohito]

The one truth out there is that the world economy as a whole is in crisis, almost every country has debt problems, in one form or another.But if things are going to get better or worse, well your guess is as good as mine. Only time will tell.

 

[caster51]

Monetary union has delivered a 'German Europe' after all
Monetary union has delivered a 'German Europe' after all - Telegraph
This is correct. From a Japanese standpoint, when Euro was introduced, I thought that Germany really did a good job as German companies can export merchandises/lend money to all of euro zone countries without risk of soaring German Mark. Unlike Japanese companies, in fact German companies enjoyed good sales for the past ten years.
But as I said before, this German-led monetary union system work only in the time when economies of all participant countries go brisk. Contorary, when they fail, it will be reverse. So we are seeing one big experiment of "Monetary Union without abondoning sovereignty".
Article also says:
I do hope that Japanese lawmakers will abondon the concept to establish Asian-version Monetary Union.

it had done last week
German is so smart. I think it is German's Manifest Destiny and dearest wish though she payed so much sacrifices for WARS
it was natural to do if same currency(Euro) were given to other europeann countries. ..
USA want $ to get revival of common currency in europe
Brits have already known this plan
German made it though Japan forgot Greater East Asia Co-Prosperity Sphere..

except Britain which knows the intrigue of Germany and the United States, other 26 cuntries will give up financial sovereignty.

March.2012？、 The default crisis of Greece will happen again
Neither Germany nor ECB relieves Greece then.
Each member nation serves as panic.
As for IMF, USA which has veto decides is...

 

[Astroboy]

Bondholders of Greek sovereign debts were forced to agree to take 53.5% haircut, but Greek CDS Won't Trigger: ISDA Says No Default Yet Greek CDS Won't Trigger: ISDA Says No Default Yet - Forbes

They changed the rule again !