Could/Can struggling economies leave the Eurozone?

[Denny Crane!]

Usually some form of capital controls would be put in place long before it was publicly announced (though doing so is as good as an announcement to the savvy) and would have to be coordinated at the EU level perhaps as you say.

But a banking and financial collapse is kinda part of the deal. That was always going to happen.

[Basil II the B.S]

There was a debate on Italian tv among bankers; essentially leaving the Euro would happen during a weekend and without a previous announcement to avoid the run to banks and limit the catastrophe. Indeed those with savings would be screwed big time.

Given however that if we leave the Euro it'd be via referendum, it's safe to say banks are likely to be closed the days before and after such event. Pretty much another Argentina.

[Basil II the B.S]

Turns out you opened the thread at the right time. European stock markets are crashing bit time. Lead by the obvious Greece and surprise, surprise, Germany, whose economy is doing awful thanks to the trade war with Russia.

[DaVinci]

Turns out you opened the thread at the right time. European stock markets are crashing bit time. Lead by the obvious Greece and surprise, surprise, Germany, whose economy is doing awful thanks to the trade war with Russia.

Bold: Wow. Much exagerating?!

[Basil II the B.S]

Bold: Wow. Much exagerating?!

Sluggish growth, decreasing production and export, increasing unemployment.
http://www.theaustralian.com.au/busi...fab965dacd6fb1
http://www.thelocal.de/20141007/how-...rmanys-economy

Ok Germany is far from the levels of Southern Europe, still numbers are bad.

[DaVinci]

Sluggish growth, decreasing production and export, increasing unemployment.
http://www.theaustralian.com.au/busi...fab965dacd6fb1
http://www.thelocal.de/20141007/how-...rmanys-economy

Ok Germany is far from the levels of Southern Europe, still numbers are bad.

Look at what i put bold in your former post. That's total utterly nonsense. Such statements need a proper comparison.
Note, i live there, and the economy is far, extreme far away from "doing awful" (still, vice versa is the case) ...
and i even don't go on comparison, you can do that by yourself and you'll find, that Germany is still one of the most successful economies of the world, and atm. there is no sign, that this will change.

Recommend: Please take care of not producing too many populist rubbish via internet.

[Basil II the B.S]

Wee, talking about overreaction.

[DaVinci]

Wee, talking about overreaction.

Imo., the overreaction was merely that, what i put bolded in your according post.

[Denny Crane!]

Off topic. Germany has suffered relatively recently due to the Eurozone dragging its heels, and much smaller amounts is Russia btw Basil.

[Nicov55]

Germany is still one of the most successful economies of the world, and atm. there is no sign, that this will change.

Agreed, except for it's really worrying demographic projections.

[DaVinci]

Off topic. Germany has suffered relatively recently due to the Eurozone dragging its heels, and much smaller amounts is Russia btw Basil.

Well no, Basil referred to the current stockmarket rates, and it's right, Germany suffers a little atm. in comparison to the recent/former growth-count assumptions of institutions, a little really, mostly related to a little drop in export activity, unemployment counts are no real issue anymore here (vice versa merely). What i can say about my economy sector is (which is one of the most important inland productivity), that everybody doesn't know where to work at first, real alarm, so i and other can't make anymore offers overall to customer-requests. Car industry suffers bit (export), else, i believe not much, except Russia-related ones. Saving-politics by the government to get a black zero holds back some govt-investment, partly, stagnating investment also valid for some big economy-players. It is expected that this will change soon aka generally investment comes back (while in my sector, investment is on a well-being for a longer time, and possibly goes down, a bit, in future).

Agreed, except for it's really worrying demographic projections.

That's also exagerated. I've seen/watched discussions about the item, and there were some experts, that the according worry-scenario might not be that slim as now propagated commonly, if overall a real problem, but the main tenor is iirc., that the broken future-demography-angst is based on the german's pensions-system (which is unique), which might be reformed completely, when the demography-factors account (which is my generation that is viewed as the first real suffering, btw., but i don't care a lot, merely not at all for myself), plus it's based on past/current birth-data and other things, in other words: the demography item is speculation to a good part.

Back to topic in this relation: I strongly believe, that Germany won't ever make efforts to leave the euro-zone ... well, but who knows, what happens in say 10 years, it's all speculation of high degree here in this thread.

[Denny Crane!]

Goes against all economic commentaries, massively downplaying a global pointer that includes Germany:

A report out yesterday from four institutes predicts that the German economy was flat in the third quarter, after shrinking 0.2% in the second. August looks to have been particularly terrible, with big drops in exports, industrial production and factory orders. Most investors have given up on Italy, and know that France is struggling, but for Germany, the engine of the euro zone, to be heading for recession is another matter.

The clue has been in the big market surprise of the year; bonds have performed much better than people expected. Every time US Treasury bond yields perk up, some commentators say this marks the end of the 30-year bull market. But 10-year yields are back down at 2.32% again; German 10-year yields seem to be moored below 1%. Albert Edwards of SocGen is often derided as a perma-bear but he has been consistent in arguing that bond yields would head lower and that, eventually, equities would de-rate to reflect lower growth prospects as they have in Japan. As the third quarter results season approaches, once again, analysts are playing the game of reducing forecasts so companies can "beat" expectations and bullish headlines can be generated. As Mr Edwards writes

According to Factset, analysts’ Q3 forecasts have been sliced from 9% yoy growth at the start of July to 4.6%. Thomson Reuters numbers are a bit higher, with Q3 2014 eps growth expectations having been lopped from 11% on July 1 to 6.4%. But will this be enough in the light of recent substantial dollar strength?
In relation to his last comment, the strength of the dollar (see this week's issue for details) will knock a few per cent off overseas earnings; remember that the most-cited explanation for the very high profits share of US GDP is the strength of multinationals.

The final indicator of economic weakness is the fall in commodity prices. While this is good news to some extent (lower petrol prices, in particular, act as a tax cut for consumers) but it's not just oil. Food prices have dropped for six months in a row and the Economist's metals index has dropped 5.5% over the last month.

All this weakness is occurring at a time when many developed markets have barely regained the output lost in the 2008-09 recession. There are a couple of reasons why economic cycles might be shorter and weaker than they were in the 1980s and 1990s. The first is high debt levels; debt has been reshuffled, not reduced, so any rise in rates can cause problems for debtors. The second is ageing economies; workforces are set to shrink in the developed world and it is very hard to grow an economy with fewer workers.

The glass isn't half full for you, you are seeing imaginary water.

[Knight of Heaven]

Lets face it Europe as a whole, and the eurozone has seen better days.
Growth rates in Continental western europe for the most part, have being droping since the late 70s.
Overal when you look at it, Germany, or France growth rates are near zero. If you lucky you have growth of 1,1 in a year or in a quarter...
Eurozone might not be in a full blown recession, but surely is a depressive economy right now, and it as been for a while.
To say Germany is doing great is to be a bit naive imo, Germany is doing better then the rest, but its not doing great. Wich is revelatory how the rest of eurozone is doing...

[DaVinci]

Denny, your glass is merely empty, really, if you come and make your posts based on particular articles. I was born, live and work (work: for about over 20 years) in Germany, in the building/construction/architecture sector (and not little 1-family-houses), which is one of the most important inland economy sectors. And believe what i wrote or not, it is not of interest to me, especially not by a non-german who has a clue what is going on here in reality.

And in comparison, Germany is still doing great, indeed, although i didn't claim it is doing great at this particular moment btw. (although it is actually in the last years especially in comparison, in particular sectors, ie. in mine).
Denny, base your opinion on that quoted article as you want and playing the bad-economy-apologist for Germany.
The reality is another one here, except what i already stated in my above post, a little growth stopper en gros atm. due to export issues esp car sector which is important in Germany (very) plus the Russia-item, investment stagnation in general etc., but no real serious items for the economy et al here, i don't hear anything in this direction in the daily news, expert discussions or other related media, also ie. employment rates are that low it wasn't ever that low in Germany iirc., companies have issues to get employees etc. and offer ie. bonusses to get the youth into profession-education aka many open places cannot beset (this might be a real issue, the youngster-recruitment at least in certain branches), plus as said, the experts say here, that the investment stagnation will stop soon ... all that atm. ... i can't say that "still good economy" might not change, of course it can change to more worse degrees, but there is no real dangerous sign atm. to see at the horizon, and nobody here expects that really which i know or heard of, that the economy falls here to dangerous levels now or in near future.
That is not, that i mean, everything is so to speak perfect in regard of economy, far from that, because i'm and was always critical to the according ongoings, ie. loans and wages stagnate or merely decreased for a not little part of employee-people, that is an issue, but still, the people usually are far from being really poor.
I personally see merely only one real bad item ie. in the metropols in Germany, that is extreme increasing immobile prices and rents, so ie. students and some lower income groups cannot afford to live anymore in the big city centers or overall within the big cities and must look for the mere outer locations of big cities, more in comparison to the past, as that is a tendency for a longer time now.

And back to topic (in relation but): Afaik, it is merely stated, commonly, that Germany is the country that holds the EU together (with France) plus in principle keeps the Euro currency still quite stable, in the past and currently. But there, i'm not an expert, and thus i leave the discussion now (again).

[Dante Von Hespburg]

Denny, your glass is merely empty, really, if you come and make your posts based on particular articles. I was born, live and work (work: for about over 20 years) in Germany, in the building/construction/architecture sector (and not little 1-family-houses), which is one of the most important inland economy sectors. And believe what i wrote or not, it is not of interest to me, especially not by a non-german who has a clue what is going on here in reality.

And in comparison, Germany is still doing great, indeed, although i didn't claim it is doing great at this particular moment btw. (although it is actually in the last years especially in comparison, in particular sectors, ie. in mine).
Denny, base your opinion on that quoted article as you want and playing the bad-economy-apologist for Germany.
The reality is another one here, except what i already stated in my above post, a little growth stopper en gros atm. due to export issues esp car sector which is important in Germany (very) plus the Russia-item, investment stagnation in general etc., but no real serious items for the economy et al here, i don't hear anything in this direction in the daily news, expert discussions or other related media, also ie. employment rates are that low it wasn't ever that low in Germany iirc., companies have issues to get employees etc. and offer ie. bonusses to get the youth into profession-education aka many open places cannot beset (this might be a real issue, the youngster-recruitment at least in certain branches), plus as said, the experts say here, that the investment stagnation will stop soon ... all that atm. ... i can't say that "still good economy" might not change, of course it can change to more worse degrees, but there is no real dangerous sign atm. to see at the horizon, and nobody here expects that really which i know or heard of, that the economy falls here to dangerous levels now or in near future.
That is not, that i mean, everything is so to speak perfect in regard of economy, far from that, because i'm and was always critical to the according ongoings, ie. loans and wages stagnate or merely decreased for a not little part of employee-people, that is an issue, but still, the people usually are far from being really poor.
I personally see merely only one real bad item ie. in the metropols in Germany, that is extreme increasing immobile prices and rents, so ie. students and some lower income groups cannot afford to live anymore in the big city centers or overall within the big cities and must look for the mere outer locations of big cities, more in comparison to the past, as that is a tendency for a longer time now.

And back to topic (in relation but): Afaik, it is merely stated, commonly, that Germany is the country that holds the EU together (with France) plus in principle keeps the Euro currency still quite stable, in the past and currently. But there, i'm not an expert, and thus i leave the discussion now (again).

Except my friend that France is currently the 'Sick man of Europe', who really has only been avoiding greater repercussions by 'hiding' behind the state of Italy and Spain (I.e. out of the media and markets 'special' attentions)

Emmanuel Macron had been in his new job less than 48 hours when he dropped his bombshell. Picked by François Hollande to be economy minister after a row over austerity prompted a reshuffle, the young investment banker suggested that France could consider an end to its hallowed 35-hour week.Was this Hollande's "Clause IV moment", analysts wondered? Was the French president about to show his commitment to economic reform by abandoning a totemic policy, as Tony Blair did on becoming Labour leader in 1994?
Not really, it emerged.
Laurent Berger, head of France's largest trade union, the CFDT, made it clear that organised labour would not tolerate the scrapping of the 35-hour week. Macron, he said, had "made a mistake" and, as far as the unions were concerned, "the subject is closed".
That seemed to go for the government too, which quickly rowed back from Macron's suggestion. A spokesman for the prime minister, Manuel Valls, said: "The government has no intention of going back on the legal length of the working week."
Another view was that France is having its "sick man of Europe" moment. In a crowded field, the eurozone's second-biggest economy has beaten off the challengers for the crown of the most problematic country on the continent.
Spain and Greece have held this dubious honour – as did Britain, of course, in the 1970s. Italy has held it off and on for decades; there was even a brief period when the mantle fell on Germany. Now it is France's turn under the spotlight.
The symptoms are clear enough. Unemployment is more than 10%; the country has not managed two successive quarters of economic growth since Hollande arrived at the Elysée Palace more than two years ago. Weak growth is putting a strain on the public finances. Its industry is less competitive than that of neighbouring Germany, which has led to job losses and factory closures.

http://www.theguardian.com/world/201...latable-remedy

Then of course there latest issue of a rejection of the EU budget (Bearing in mind the UK which tends to have quite a good record of adopting all EU policies and advice quickly until recently- despite protests! would have been hanged over this):

http://www.nytimes.com/2014/10/14/bu...ch-budget.html
http://www.telegraph.co.uk/news/worl...e-with-EU.html

http://blogs.reuters.com/anatole-kal...ances-economy/

Meanwhile the UK which has arguably been seen as actually less 'shakey' than Germany's current economic position (the UK being the fastest growing G7 economy)

Britain's economy is growing faster than those of every other major developed country, the International Monetary Fund has disclosed.

http://www.telegraph.co.uk/finance/e...Fund-says.html

FOR the American and British economies it has been a long road out of the woods, but the journey is nearing its end. America’s unemployment rate fell below 6% in September. Britain’s economy, where output was up 3.2% in the year to June, is growing faster than any other big rich country’s. Central bankers are counting the days until they can raise interest rates.
Virtually everywhere else, however, the news is grim and getting grimmer. The euro zone, the world’s second-biggest economic area, seems to be falling from a feeble recovery back into outright recession as Germany hits the skids. Shockingly weak industrial production and export figures mean Germany’s GDP is likely to shrink for the second consecutive quarter—a popular definition of recession. Japan, the world’s third-biggest economy, may also be on the edge of a downturn, because April’s rise in the consumption tax is hurting spending more than expected. Russia’s and Brazil’s economies are stagnant, at best. Even in China, still growing at a suspiciously smooth 7.5% a year, there are worries about a property bust, a credit bubble and a fall in productivity (see article).

http://www.economist.com/news/leader...3956ea65f756e0

Which is nice for a change! The UK and US being part of only a few countries who are doing relatively well. Germany while your right that it's not collapsing, is starting to feel the burden of propping up the Euro-zone single handedly. Something which with France in such a state, is very much a sole burden (And of course with the potential UK exit in 2017, we're looking at the EU's 2nd/3rd major economy (depending on how you view France) so Germany will be very much the sole pillar of the EU, especially if France continues to play at the UK's traditional role of ducking around the EU.

To bring this seg-way shamelessly back on the topic though, i'd put forward that with this view in mind, i think long-term struggling 'southern' economies would find it easier to up and leave the EU, especially as it might seem like a good deal for the big players- Less economic strain of Germany having to prop up a wider more disparate EU and deal with a petulant France.

[DaVinci]

Lets talk about all that in say 1-2 or 3 years. Atm., there are many factors which influence the economy merely to worse tendencies in continental europe (boring to list up all ongoing current crisis'); while as you say, US and UK coming out of the hole now, i suppose, that other relevant countries would follow that tendency, slowly but. And it might be, that Germany suffers a bit more in the next due time, but, and that's important, it is absolutely stable here due to the last years up-tendency (even if current stock market analysis' etc. say negative this year for expected growth, there is still an inner market that works, and export won't break never ever totally, even the disgusting growth rate isn't dangerous in any way, so i rather refuse to take over "recession" here, i for one do not feel anything about that, still vice versa in my branch, example, my order book is full for the next year, and i expect to get even much more orders, when i want overall still more, i have no other choice to hire more experts merely to team-up to provide the work, the building et al market is with big spreading character btw.). And also, it can be, that the positive tendency for US and UK has a refreshing effect for all markets, that's what i rather expect, since we are just not of a non-global economy, plus the Russia item (although not so super relevant in reality as some might think, that's merely also a psycho factor) might be solved soon as well. Anyway, as you might know, the stock market esp is dependent of big psychology effects, one can interprete that also as partly irrational - but as said, ie. Germany is not only dependent on that part of the economy, vice versa, ie if something smells after crisis' from outside's influence, esp private sector might invest into immobiles and other apparently secure values, ie. you won't believe how much money the private sector is holding back atm. although intrest rates are extreme low. And government, although under high money-pressure, even wants to realise (what it must also) a black zero. Nonetheless, what's still valid here is the long grown tendency of a shrinked middle-class while the economy makes a good business all in all, i hope that'll change somehow, politics at least go into this direction. Btw., i like it that UK comes back to a proper stand, hopefully it'll use it to make something for the common people as well, same for the US, after all, we know all (?), that a shrinking middle-class is not so good for the economy/society longterm.

Back to topic: Also the real thread's theme here, it is exactly dependent on the next years economy outcome, i rather expect, if the EU in whole works economically properly (again), then all that jazz about leaving/breaking will be dust in the wind.

[fkizz]

Read on some newspapers that we've had deflation for 8 months in a row here in Portugal.

which means lower prices, technically more competitive, but the social pain is high, and much slower adjustment than with currency devaluation.

Nonetheless a huge lesson was learned, to all those portuguese who thought EU was salvation, the golden cash cow, and that nationalism is bad by itself, that wanting to have a productive industry is bigoted nationalism, that foreigners always want our best and the portuguese our worst, those portuguese got perhaps the lesson of their lifetimes on that regard. At least that was learned, I hope.

Embarrasses me but I've seen and met several people thinking so for several years.

I also send my recognition to the Wolfgang Schäuble as a master chess player, either him or his staff behind, or both, they did a brilliant play in bouncing back the euro that was meant to tame the hated Bundesbank and the Mark, and to contain the power of the re-united germany with the eastern part.

However that does not mean I see them as friends or allies.. But still, for germany even when to be lagging economically and still getting such a financial boost and amount of trust; while boosting back france, I'm impressed, I have to give the german minister finance staff some credit for their ability.

We need to get something similiar here in Portugal.. That Schäuble fellow seems interesting.

[Knight of Heaven]

Nonetheless a huge lesson was learned, to all those portuguese who thought EU was salvation, the golden cash cow, and that nationalism is bad by itself, that wanting to have a productive industry is bigoted nationalism, that foreigners always want our best and the portuguese our worst, those portuguese got perhaps the lesson of their lifetimes on that regard. At least that was learned, I hope.

That doesnt seem Portuguese mentality at all imo. Productive industry was always an aim and goal, we werent able to do it with EU funds, and we wont be able to do it without it regardless, that seems more in tune with portuguese reality.
In fact most people think EU funds were just wasted on stupid things and ventures like you know tecnoformas retarded German Submarines deals where the good Germans showed us that they are as corrupt as the southern european "brethren" and god knows what.
It is a more complex issue, then simply Nationalism bad and europeism good... never felt that was the case either, but whataver.
In fact when you look at the political setting, it was the left that you so often trash that was more cautious and vocal towards EU then the right... Just look at the traditional stances of PCP, and BE... and then the stance of CDS and PSD...

And what you realy think that we learned as a Portuguese with all this? from what i see is basicaly a great disbelief and discredit on all politicians, and political system with no exception, people just dont vote, or when they vote, they do in blank, or they vote in ficticious characters, that they do so chose... i know a guy who voted for "batatinha"...

Exception maybe you know the demagoge Marinho Pinto, who does his number in the morning talk shows, with his usualy popular rethoric, sometimes xenophobic and homophobic rants that we know so well, atacking the European parlament and the salaries of the politicians there, while at same time being one of them its so ridiculous that is funny. No man! politicaly it is irrelevant what we learn or we didnt learned, because we dont realy have much choice anyway. Or rather we only have bad choices.
Economicaly speaking there wont be much chances in the near and medium future, because we simply dont have much room anyway.

[DaVinci]

I just wanna add, that when countries leave the euro-zone or even the EU, it will cost immediately working-places (that's what i hear by all proper experts, except by the ones who wanna leave the euro-zone or EU) - there is apparently no cure for any country in a leave of the EU or euo-zone, vice versa probably.

Also, in general, economy imo. and in my experience (and i'm 48 after all), works in curves, ups and downs, so as the EU zone (and western world) is/was in a down tendency for a while, the up tendency must come, perhaps not immediately, but it'll happen ... (hopefully, i'm merely an optimist, but still also realist).

[Mayer]

Also, in general, economy imo. and in my experience (and i'm 48 after all), works in curves, ups and downs, so as the EU zone (and western world) is/was in a down tendency for a while, the up tendency must come, perhaps not immediately, but it'll happen ... (hopefully, i'm merely an optimist, but still also realist).

Gee, the slogan 'just wait till it will be better' is probably very popular among the masses of unemployed in the EU. No wonder you are ranting about populists whose ideas are much more appealing.