Question Greek Economy

[adwebb16]

For those financial bods in the know I heard that the huge bail out of Greece will see the Euro plummet in value. Which could be a good sign for us tourists this summer. Is this correct?

 

[Yorkshire Blue]

For those financial bods in the know I heard that the huge bail out of Greece will see the Euro plummet in value. Which could be a good sign for us tourists this summer. Is this correct?

Not been following the exchange rates particularly closely so I don't know whether this has already been factored into the exchange rate, but a weaker Euro would indeed mean that you'd get more €s for your £s and your holiday money would go further.

On the other hand, a stronger pound relative to the Euro would make our exports more expensive and therefore less desirable to those in the Euro-zone, so that wouldn't be good news for those who work in manufacturing.

 

[osymandus]

I believe their making the decision today ? Rumors are it will be accepted ??

 

[McNasty]

I go to Kos this month, I hope it doesn't mean they put their prices up --- I don't fancy paying a fortune for my Stifado.

 

[DTS]

I go to Kos this month, I hope it doesn't mean they put their prices up --- I don't fancy paying a fortune for my Stifado.

Hold out on getting your euros until the last min would be my tip.

 

[Bazza the dog]

Definately hold out until you get to the airport as it is due for a drawdown against all hard currencies and some of the emerging ones too. Thank god we didn't join that lame currency, bet the Germans are kicking themselves.

 

[Tangled up in Blue]

Definately hold out until you get to the airport as it is due for a drawdown against all hard currencies and some of the emerging ones too. Thank god we didn't join that lame currency, bet the Germans are kicking themselves.

The Spanish (and the Portuguese)certainly aren't.:)
FYI the Euro has been more than holding its own against sterling since January with only slight, daily variations(amounting to effectively a 20/25% devaluation of Sterling against the Euro).If there's a hung parliament( now almost a certainty)then there's likely to be quite a run on the pound in favour of the euro.
Remember that the UK has the same level of debt as Greece without the support of other Eurozone currency members to turn to for help.

 

[osymandus]

The Spanish (and the Portuguese)certainly aren't.:)
FYI the Euro has been more than holding its own against sterling since January with only slight, daily variations(amounting to effectively a 20/25% devaluation of Sterling against the Euro).If there's a hung parliament( now almost a certainty)then there's likely to be quite a run on the pound in favour of the euro.
Remember that the UK has the same level of debt as Greece without the support of other Eurozone currency members to turn to for help.

But of course the Euro has no benefit of being in it (oh wait aside from teh back up of teh other nations in it he he ;) )

I'd still prefer it if they called it the pound mind has a better ring to it :D

 

[MrB]

I fly to Portugal on Thursday. I'm holding on at the moment!!

 

[Mad Cyril]

Remember that the UK has the same level of debt as Greece without the support of other Eurozone currency members to turn to for help.

The UK has a much larger economy as well.

 

[chadded]

Would now be a good time or a bad time to be living in the Eurozone, and having most of your wages paid in Euros?

 

[Davros]

But of course the Euro has no benefit of being in it (oh wait aside from teh back up of teh other nations in it he he ;) )

I'd still prefer it if they called it the pound mind has a better ring to it :D

Of course, handing over your currency to the Euro also means handing over the setting of your interest rates, and all number of other mechanics of your economy.

When i was studying Economics at school back in 2000, i said at the time that the Euro will one day be studied as a 'why it failed' as part of either future Economic or History GCSE's or even A-Levels.

Its seemed obvious to me that when a whole host of different countries with very differing economies all tried to use the same currency, it would not be sustainable in the event of a large recession, as when it came to recovery, the setting of interest rates by one bank (ie the ECB) would suit some countries more than others (ie mainly Germany and France), and that smaller countries who although had met the criteria to join the Euro, obviosuly had weaker and very different economies would lose out at having interest rates that did not suit there economy.

Sadly, i have not got my essay that i did on this (was part of my arguement to why we should not join the Euro) but while i was only young, i think it is fair to say that i am mildy smug (if also slightly sad, as i do like Greece as a nation of people) that my prediction is maybe to be proved right.

In the end, i believe the only way for the 'weaker' countires to survive is to leave the Euro, as it does not offer them the independent felxability required to ride out such storms, as it is clearly set up way to far in the favour of the stronger European economies (mainly Germany).

 

[Tangled up in Blue]

Would now be a good time or a bad time to be living in the Eurozone, and having most of your wages paid in Euros?

If you're paid in Euros and intend to spend your dosh in the UK you'd be quids in at the minute.

 

[Tangled up in Blue]

Of course, handing over your currency to the Euro also means handing over the setting of your interest rates, and all number of other mechanics of your economy.

When i was studying Economics at school back in 2000, i said at the time that the Euro will one day be studied as a 'why it failed' as part of either future Economic or History GCSE's or even A-Levels.

Its seemed obvious to me that when a whole host of different countries with very differing economies all tried to use the same currency, it would not be sustainable in the event of a large recession, as when it came to recovery, the setting of interest rates by one bank (ie the ECB) would suit some countries more than others (ie mainly Germany and France), and that smaller countries who although had met the criteria to join the Euro, obviosuly had weaker and very different economies would lose out at having interest rates that did not suit there economy.

Sadly, i have not got my essay that i did on this (was part of my arguement to why we should not join the Euro) but while i was only young, i think it is fair to say that i am mildy smug (if also slightly sad, as i do like Greece as a nation of people) that my prediction is maybe to be proved right.

In the end, i believe the only way for the 'weaker' countires to survive is to leave the Euro, as it does not offer them the independent felxability required to ride out such storms, as it is clearly set up way to far in the favour of the stronger European economies (mainly Germany).

And when I was studying Economics at WHS back in 1970 we were taught about "economies of scale." If you believe in the EU(and even if you don't, the UK is still a permanent member state) then a single currency makes sense.

 

[osymandus]

Of course, handing over your currency to the Euro also means handing over the setting of your interest rates, and all number of other mechanics of your economy.

When i was studying Economics at school back in 2000, i said at the time that the Euro will one day be studied as a 'why it failed' as part of either future Economic or History GCSE's or even A-Levels.

Its seemed obvious to me that when a whole host of different countries with very differing economies all tried to use the same currency, it would not be sustainable in the event of a large recession, as when it came to recovery, the setting of interest rates by one bank (ie the ECB) would suit some countries more than others (ie mainly Germany and France), and that smaller countries who although had met the criteria to join the Euro, obviosuly had weaker and very different economies would lose out at having interest rates that did not suit there economy.

Sadly, i have not got my essay that i did on this (was part of my arguement to why we should not join the Euro) but while i was only young, i think it is fair to say that i am mildy smug (if also slightly sad, as i do like Greece as a nation of people) that my prediction is maybe to be proved right.

In the end, i believe the only way for the 'weaker' countires to survive is to leave the Euro, as it does not offer them the independent felxability required to ride out such storms, as it is clearly set up way to far in the favour of the stronger European economies (mainly Germany).

However it has been stated that the reason for the trouble is Greece lied . Had they not and not been in it from what i understand the Euro zone was doing pretty well. Remember they do have the finical power house Germany who arnt afraid to change economic ideals just because they have been traditional. They had more wealthy countries picking up the losses , and stabilising some of the smaller ones.

Doesn't it also help if you have a valuable commodity traded in your currency as well ?? Now if only they sold oil in Euro's :D

 

[Mad Cyril]

I don't know any drug dealers that accept Euros.

 

[chadded]

I'll send you a PM...

 

[Davros]

And when I was studying Economics at WHS back in 1970 we were taught about "economies of scale." If you believe in the EU(and even if you don't, the UK is still a permanent member state) then a single currency makes sense.

Economies of scale is a brilliant concept, and fundamentally why Tesco can destroy the high street, but where as Tesco has superstores (germany) and expresses (greece), i suspect the core supports all stores equally, where as Germany gets charged a rate of 0.8% on its international loans and Greece a whopping 15.7%.

Osy, i can understand that Greece probably lied and went into the whole thing with a weaker economy than everyone thought, which is precisely the reason why the UK shouldnt join the Euro at the moment.

 

[osymandus]

Economies of scale is a brilliant concept, and fundamentally why Tesco can destroy the high street, but where as Tesco has superstores (germany) and expresses (greece), i suspect the core supports all stores equally, where as Germany gets charged a rate of 0.8% on its international loans and Greece a whopping 15.7%.

Osy, i can understand that Greece probably lied and went into the whole thing with a weaker economy than everyone thought, which is precisely the reason why the UK shouldnt join the Euro at the moment.

Totally agree with you as well , i just suspect that when the time is right our financial acumen , with the rest of Europe will probably make it work extremely well. And at teh moment no one is stating we should , plus with our debts would they even have us ;)

 

[Davros]

Totally agree with you as well , i just suspect that when the time is right our financial acumen , with the rest of Europe will probably make it work extremely well. And at teh moment no one is stating we should , plus with our debts would they even have us ;)

But wouldnt you agree that as long as the likes of Greece, Portugal etc remain in the Euro, its not a good idea to join, as much of the obligation would go towards propping up there economies?

I agree that the Euro or any form of single currency could work, but that the enrty objectives would have to be much tighter and much higher than they were originally, and a limit of 3 or 4 countries be in place so that the setting of one set of banking instructions, rules and limitations isnt too thinly spread over too many, differing economies?