PDA

View Full Version : Iceland committed to joining the Euro



BlasterBates
5th January 2012, 10:55
So Iceland was a shining example held up as the reaon why countries shouldn't be in the Euro....

then again... (http://www.bloomberg.com/news/2012-01-05/iceland-s-hardardottir-committed-to-euro.html)

BrilloPad
5th January 2012, 11:10
"The country may sell another bond to international investors this year, after issuing a $1 billion five-year bond in June"

What morons would lend to Iceland?

DimPrawn
5th January 2012, 11:12
Iceland is a shining example of why when you are up to your eyes in debt the best approach is just to default and declare yourself bankrupt.

A few years later everyone is falling over themselves to lend to you again and all the austerity pain is never felt.

Paddy
5th January 2012, 11:14
Is that the end of two for £1 frozen peas?

The Spartan
5th January 2012, 11:28
A lot of councils and Police authorities lost millions when they invested their staff pensions in Iceland

Troll
5th January 2012, 11:30
Did they ever pay back our wonga?

DimPrawn
5th January 2012, 11:34
Did they ever pay back our wonga?

Nope. They borrowed like everyone else and when they realised they would never be able to pay it all back they simply raised two fingers to the rest of the world and said "thanks for all the free money chaps, we ain't paying it back".

:laugh

The international community said "if you do this, you'll be an economic pariah", and Iceland responded by enjoying itself, spending the money and generally having a good time (compare and contrast to Ireland).

Now they'll join the Euro, get lots more free money and then laugh when that goes tits up.


Got to admire this approach.

The Spartan
5th January 2012, 11:56
Spot on assessment there, seems unbelievable but they managed it. I wonder if it added anything to the so-called public pensions crisis as they lost a fair whack when Icesave went tits up

Doggy Styles
5th January 2012, 12:08
Iceland wanting to join the eurozone is hardly a ringing endorsement of it! :laugh

The Spartan
5th January 2012, 12:24
What I don't understand is the Greeks, they're trying to pass austerity measures so they can get more money and people are striking and objecting. Won't that mean that the country will go down the pan?

BrilloPad
5th January 2012, 12:36
What I don't understand is the Greeks, they're trying to pass austerity measures so they can get more money and people are striking and objecting. Won't that mean that the country will go down the pan?

They believe that for Europe to survive, fiscal transfers have to take place. Germany has benefited from an advantagous exchange rate due to the Greeks - so they expect something in return. Both sides are now involved in a Mexican standoff.

The Spartan
5th January 2012, 12:50
Thank you for the explanation, it was very well put.

sasguru
5th January 2012, 12:56
Iceland wanting to join the eurozone is hardly a ringing endorsement of it! :laugh

Quite. Even if the cracks are papered over, eventually Europe's many problems: demographic ageing, lack of competivity, high labour costs mean it is going to be low growth area for the next generation

The Spartan
5th January 2012, 13:11
It seems that the Germans have been the main beneficiaries of the Euro isn't their economy doing really well in comparison with the rest of the EU

DodgyAgent
5th January 2012, 13:30
It seems that the Germans have been the main beneficiaries of the Euro isn't their economy doing really well in comparison with the rest of the EU

Of course! They are not stupid are they. By imposing the Euro they have wiped out cost competition from "lower cost" EU countries and they have kept exchange rates disproportionately low, thus maintaining price competitiveness of their products.
Their banks have lent Eurozone consumers vast amounts of money to buy German products.

Now they have to pay for it by bailing the rest of Europe out of its financial crisis :happy

AtW
5th January 2012, 14:40
eventually Europe's many problems: demographic ageing, lack of competivity, high labour costs mean it is going to be low growth area for the next generation

And UK is different how?

SimonMac
5th January 2012, 14:44
Does that mean the Prawn Rings will now be €3 not £3?

DimPrawn
5th January 2012, 14:46
Does that mean the Prawn Rings will now be €3 not £3?

:eek:

How very dare you!

DodgyAgent
5th January 2012, 14:46
And UK is different how?

Because we are masters of our own destiny. If we want to let Russians into our country it is our decision. If we want to borrow like feckless idiots then it is our decision and we can suffer the consequences. No one is saying our bed is better but it is ours to mess up if we want to.

The Spartan
5th January 2012, 14:49
But if countries we've lent to default won't that make our financial position more precarious?

DodgyAgent
5th January 2012, 14:50
But if countries we've lent to default won't that make our financial position more precarious?

Probably

doodab
5th January 2012, 14:57
Of course! They are not stupid are they. By imposing the Euro they have wiped out cost competition from "lower cost" EU countries and they have kept exchange rates disproportionately low, thus maintaining price competitiveness of their products.
Their banks have lent Eurozone consumers vast amounts of money to buy German products.

I'm not convinced by this thesis. German banks are relatively small and certainly not responsible for all the irresponsible lending that has taken place, or even a particularly significant chunk of it, and their manufacturing is competitive because unlike a lot of "lower cost" places they have managed to contain wage inflation. That has less to do with the € and more to do with the fact they simply haven't had the sort of credit bubble that many of the other eurozone countries had IMO. The end result is that Germany is one of the "lower cost" EU countries.

DodgyAgent
5th January 2012, 15:07
I'm not convinced by this thesis. German banks are relatively small and certainly not responsible for all the irresponsible lending that has taken place, or even a particularly significant chunk of it, and their manufacturing is competitive because unlike a lot of "lower cost" places they have managed to contain wage inflation. That has less to do with the € and more to do with the fact they simply haven't had the sort of credit bubble that many of the other eurozone countries had IMO. The end result is that Germany is one of the "lower cost" EU countries.

Precisely my point. Germany has removed cheap labour competitiveness by imposing the Euro on the other manufacturing countries of europe- most notably Italy and France. it has kept its own labour costs low mainly because it has enjoyed an exchange rate that would have been considerably less favourable had it stuck with the Mark. As for the German banks it doesnt matter how big or small they are they have lent money to consumers to buy German goods - just as other banks have. the reason the Germans do not have a credit bubble is because the Germans do not consume. What is hilarious is that they have stoked the credit bubble elsewhere and are now left paying for it anyway

EternalOptimist
5th January 2012, 15:17
What I don't understand is the Greeks, they're trying to pass austerity measures so they can get more money and people are striking and objecting. Won't that mean that the country will go down the pan?

nothing in Greece goes down the pan. You even have to sh1t in a plastic bag and leave it next to the bog for the cleaner.

disgusting country




:rolleyes:

The Spartan
5th January 2012, 15:24
hahaha yeah it's what I hated about holidaying there no proper sanitation

SimonMac
5th January 2012, 15:34
:eek:

How very dare you!

I've heard your ring goes for considerably less than €3 on the open market

The Spartan
5th January 2012, 16:14
mwahhahaha that's got to burn