[size=150:1io4w701]Bulgaria has decided to 'indefinitely' delay talks to join the euro

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Where does this leave the Leva being pegged against the Euro I wonder
Please read the bit about "
Things are so bad even Bulgaria won't join"

A wise decision on the part of the Bulgarian government to delay talks on joining the Euro, no point in joining something that is falling apart at the seams.

What many people don't realise is that the EU has now changed into an undemocratic communist empire. Gone are the days when it was a free market. Once they get full control it means they can do pretty much anything they like. Democracy as we know it will die, we've already seen the erosion of our right to make our own laws, the replacement of member states currencies pushed on the people. Our standard of living has already dropped massively We will all live in poverty while the ones who are in control will get the riches. The writing is already on the wall...

Maybe I'm naive but what is the point of loaning these countries more money at really high interest rates? Why not lend them at a lower rate so that they would at least have a chance of repaying the debts? It is the same with credit cards companies - they keep putting the interest rate higher and higher until it is no longer sustainable and people have to default. Why don't the banks actually help their customers through tough times?

LisA wrote:

Maybe I'm naive but what is the point of loaning these countries more money at really high interest rates? Why not lend them at a lower rate so that they would at least have a chance of repaying the debts? It is the same with credit cards companies - they keep putting the interest rate higher and higher until it is no longer sustainable and people have to default. Why don't the banks actually help their customers through tough times?

Well said Lisa

[size=50:1ntxum0n]Daily Telegraph

[size=150:1ntxum0n]Europe's money markets freeze as crisis escalates in Italy and Spain

The European money markets have begun to seize up as pressure mounts on the Italian and Spanish banking systems, tracking the pattern seen during the build-up towards the financial crisis in 2008.

Italian debt reached a post-EMU high of 6.22pc before falling back slightly on reports of Chinese buying.
The three-month euribor/OIS spread, the fear gauge of credit markets, reached the highest level in two years today, jumping 7 basis points to 40 in wild trading.
"
Europe's money markets are undoubtedly starting to freeze up,"
said Marc Ostwald from Monument Securites.
"
It's not as dramatic as pre-Lehman but it is alarming and shows the pervasive degree of fear in the markets. People are again refusing to lend except on a secured basis."

The credit stress was triggered by fresh mayhem in the southern European bond markets and ominously in parts of the eurozone's soft core as well, including Belgium. Spanish yields pushed further into the danger zone to 6.42pc. Italian debt reached a post-EMU high of 6.22pc before falling back slightly on reports of Chinese buying.
"
We have a revolt taking place by foreign investors in these bond markets,"
said Hans Redeker, currency chief at Morgan Stanley. "
There have been hardly any purchases for several months. We are seeing net disinvestment because people fear that these countries lack the potential to grow their way out of the problem, and risk falling into a Fisherite debt trap."


Mr Redeker said the eurozone needs a lender-of-last resort along the lines of the US Federal Reserve to backstop the Spanish and Italan bond markets. The European Central Bank cannot easly step into the breach under its current legal mandate and treaty authority.
"
The eurozone faces a very big decision: it either creates a central fiscal authority or accepts reality and starts to think the unthinkable, which is to cut the currency union into workable pieces."

The escalating drama forced Spain's premier Jose Luis Zapatero to delay his holiday in the Doñana biodiversity park near Huelva. A spokesman said he was staying in Madrid "
to more closely monitor the evolution of the economic indicators"
. Mr Zapatero telephoned opposition leader Mariano Rajoy on his holiday in Galicia to keep him informed of the fast-moving events.
In Rome, Italy's president Giorgio Napolitano held a second meeting in days with central bank chief Mario Draghi, the future head of the ECB. There has been speculation in the Italian press that the well-respected Mr Draghi might be called to lead an emergency government to restore market confidence.
Finance minister Giulio Tremonti invoked the country's financial crisis committee on Tuesday as the Milan bourse fell to a three-year low, once again led by bank stocks. Fiat fell 6pc after an 11pc drop in Italian car registrations in July.
Mr Tremonti was to talk last night to EU economics commissioner Olli Rehn, who has interupted his holiday in Finland. He will visit Luxembourg on Wednesday for a meeting with Eurogroup chief Jean-Claude Juncker.
An EU spokesman said there was "
no emergency plan"
on the table. "
There are no factual reasons that we are aware of that can explain this sudden acute surge in spreads. What matters is that the Spanish and Italian authorities are taking the necessary action towards fiscal consolidation,"
she said.
Simon Derrick from the BNY Mellon said the trigger for the final denouement in each of the eurozone's bond crises so far has been when the spread over German Bunds reaches 450 basis points, prompting LCH Clearnet to impose higher margin requirements. The Spanish spread hit a record 400 on Tuesday.
The political ferment behind the scenes points to a major policy shift, though it is unclear what the EU authorities can do without the full backing of EU leaders. They are mostly on holiday and German Chancellor Angela Merkel does not like to be bounced into decisions.
The EU summit accord in late July has clearly failed to reassure investors. It gave the EFSF bail-out fund powers to buy Spanish and Italian bond pre-emptively but this has to be ratified by all parliaments, which may take four months. Willem Buiter from Citigroup said the €440bn fund is far too small to cope with Italy and Spain, and requires immediate firepower of €2.5 trillion. Such demands risk setting off a political crisis in Berlin.
Credit experts in the City said it was unlikely that China is purchasing bonds from the eurozone periphery. The Chinese central bank's reserve manager SAFE is clearly buying euros on a large scale to hold down the yuan and safeguard export advantage in Europe, but it appears to be purchasing short-term debt of a one-year maturity or less and other liquid assets.
Even if the crisis is resolved, Italy and Spain may have to pay significantly higher borrowing costs to attract buyers. Anthony Peters from Swissinvest says large clients have been telling asset managers to eliminate Sourthern European risk. "
They have kissed peripheral Europe good-bye,"
he said.

I voted no and the sooner it goes the better for all of us

BGTRAVELLER wrote:

I voted no and the sooner it goes the better for all of us

I think this is a and very important to the future of Europe. What do you think :Great:or

I started this very important topic as I thought it would give [size=150:dqxg4m2s]all members a chance to give their opinions as to whether the EURO will survive
Out of all the members on this forum we only have 14 votes, so how about voting and giving your views on the way you voted
I ask, how many more countries will have to be bailed out and by who ????

I think its just a matter of time before we see total collapse? its a shame because in principle it was a good idea but we seem to have to many hangers on which will be the downfall As for who pays? well thats obvious those who don't use the euro so get writing to your MP

I have just voted a big NO. Although Britain is struggling, at least it is in charge of its own destiny (well, more or less!) Why Britain should bail out these countries is a complete mystery but what do I know? If the PIGS can't pay what they already owe, why give them more? When ordinary folks have maxed out their credit cards - that's it so why is a country any different? Its the Governments that have unwisely spent the peoples taxes and blown their budgets, so its no wonder the peasants are revolting everywhere.

[size=50:3qbgfq0m]Daily Telegraph

[size=150:3qbgfq0m]The ECB throws Italy and Spain to the wolves
The European Central Bank has abandoned Italy and Spain to their tortured fate.

Jean-Claude Trichet, the ECB's president, said the bank had purchased eurozone bonds for the first time since March.
Its refusal to act in the face of an existential threat to monetary union has set off violent tremors across the global financial system, raising the risk that the crisis will spiral out of control.
Bank shares crashed in Madrid and Milan, with Intesa Sanpaolo down 10pc and Italy's MIB index reduced to its knees with a one-day fall of 5.2pc. Share trading was suspended at a string of bourses across Europe.
Yields on 10-day US debt fell to zero in a replay of panic flight to safety seen during the onset of the Lehman-AIG crisis three years ago.
Jean-Claude Trichet, the ECB's president, said the bank had purchased eurozone bonds for the first time since March but this token gesture was confined to Ireland and Portugal, countries that have already been rescued.
Professor Willem Buiter, Citigroup's chief economist, said the apparent ECB action was pointless. "
The warped logic of intervening in two countries that don't need it is as strange as it gets."


Mr Buiter said Europe risks a disastrous chain of events and the worst financial collapse since the onset of the Great Depression unless Europe's central bank steps in with sufficient muscle to back-stop the system.
"
The ECB has yet so show it understands that it is the only institution that can save Italy and Spain from fundamentally unwarranted defaults. Everybody is afraid and real money investors are dumping their holdings. The ECB must step in to cap the yields at 6pc or 6.5pc and put a floor under the market,"
he said.
Italian yields spiked to 6.21pc yesterday after a relief rally wilted. Spanish yields hit 6.3pc. The debt of both countries is hovering near 400 basis points over German Bunds, 50 points shy of the level used by central clearing house LCH.Clearnet to trigger margin calls. This was the point where the debt crises of Greece, Ireland and Portugal crossed the line of no return. Spain has cancelled further debt auctions in August.
"
As long as the ECB stays on the sidelines, a speculative, fear-driven withdrawal of market funding can feed a self-fulfilling insolvency. Any number of banks and insurance companies would take huge hits. The ECB will have to come in, or accept the biggest banking crisis since 1931,"
Mr Buiter said.
He said the "
fundamental design flaw"
in economic and monetary union is the lack of a lender of last resort.
EU leaders agreed in late July to boost the powers of the eurozone's €440bn (£382bn) European Financial Stability Facility (EFSF) bail-out fund so that it may intervene pre-emptively in countries in trouble, but this has to be ratified by all national legislatures and may take months.
Mr Buiter said the fund needed to be increased five-fold to €2.5 trillion to be credible in the long run.
"
It is quite irresponsible that the euro member states decided to send their parliaments on holiday this summer before they had enhanced the EFSF to effective scope and size. Crises can happen even during inconvenient periods,"
he said.
While Spain's leader, Jose Luis Zapatero, has suspended his holiday and Italy's Silvio Berlusconi has pledged fresh crisis measures, German Chancellor Angela Merkel is on holiday in Austria and seemingly in no mood to revisit the summit battles of late July.
Jose Manuel Barroso, the European Commission's chief, has called for "
a rapid reassessment"
of the EFSF in order to deal with contagion and a mounting systemic threat. "
It is clear that we are no longer managing a crisis just in the euro-area periphery,"
he said.
Key eurozone officials met yesterday to discuss raising the fund's firepower to €1 trillion, perhaps using a manoeuvre that skirts legal restrictions, although Germany's finance ministry shot down the proposal as pointless coming so soon after the July summit. Bail-out fatigue is becoming ever clearer in Germany, Holland, and Finland, where tempers are fraying.
Mr Trichet said the ECB's governing council was divided over bond purchases but gave no further details. German sources said Bundesbank chief Jens Weidmann voted against intervention, repeating his well-known view that further "
collectivisation of risks"
poses a threat to monetary stability.
German-led hawks say the ECB lacks treaty authority to keep amassing a portfolio of bonds, is on a slippery slope towards debt monetisation and is being drawn deeper into tasks that belong to fiscal authorities.
ECB officials are aware token purchases of Spanish and Italian bonds would soon be tested by the markets, pulling the bank ever deeper into a monetary swamp. The two countries' tradable public debt is more than €2 trillion.
The ECB has purchased almost a fifth of the combined debt of Greece, Ireland, and Portugal yet still failed to stem the crises in these countries. Any intervention in Italy and Spain would have to be on the sort of overwhelming scale undertaken by the US Federal Reserve.
"
Italy is the third-biggest bond market in the world: the idea that a bit of ECB buying can make any long-term difference is very misplaced,"
said Marc Ostwald from Monument Securities.
Mr Ostwald said the ECB appeared to have bought some Irish bonds today. "
This is their way of giving Ireland a pat on the back for delivering on austerity, to show that Ireland really starts to divorce itself from others in crisis."

The ECB increased liquidity for banks, offering unlimited funds for six months to prevent the money markets freezing up. The bank also left interest rates unchanged at 1.5pc and signalled an end to its rate-rise cycle.

The present crisis in Europe has sent the Lira here in Turkey up to 2.83 official bank rate against Sterling. So that is good for the Brits living here, but absolutely useless for us trying to sell our apartment and selling in Lira. If we placed our property on the market in Sterling the situation would be even worse given the present reluctance for anyone to buy here in Turkey, especially with the pound being so strong against the Lira.

I was quite young (early -mid twenties) during the initial introduction of the Euro and missed a lot of the debate about it's introduction, I guess it did not directly affect me at the time, I had more immediate things to concentrate on.

But... I have never understood how richer and poorer countries could use the same currency - and expect it, over time, to work in everyone's best interest. Europe is not a united country, in which the same laws and rules apply throughout. Some countries are richer some are poorer - residents of the richer (more successful) countries will start feeling resentment to these poorer countries, whom the EU funds are bailing out, when do you stop giving more money to a country in debt? Especially during a recession, when everywhere has it's own problems that need addressing. Will this crisis divide Europe again?

It was a no from me.

If the Americans, British, Greeks Italians Spanish etc etc are all in debt. :shocked1:Then just who do they owe all this money to? I rekon it must be China and Taiwan as everything is made in these places. But joking aside who is owed all this money?

tonyb60 wrote:

If the Americans, British, Greeks Italians Spanish etc etc are all in debt. :shocked1:Then just who do they owe all this money to?

You have hit the nail on the head Tony - who do all these countries owe this money. Our government in the UK have never had the decency to avail this information of why the UK is in such a mess to the ordinary working man or woman in the street, but they expect him or her and everyone else to shell out their hard earned money to pay for the mess the country is in. It beggars belief that we live in a time when the government seem to be responsible to no-one except for themselves. The higher echelons in life appear to carry on as usual and get their lovely bonuses at the expense of those minions who have to carry the boat and get the country out of it's biggest debt ever.

:Good post:Exactly and that is why there is so much public unrest and demonstrations everywhere. The ordinary folk have had enough and its time a few questions were answered.