Re: Strong Currency prevents Exports
Broadway
2/26/2012 9:44:29 PM
@Street Smart, if Europe has been bullying the United States since World War II, they are mastermind actors! Because if you ask them, they'd say the US has been bullying them and telling them what to do for the last 60 years. The only country notorious for doing its "own thang" is France. Germany was practically a US colony for most of the postwar years -- and there are still plenty of US soldiers there. The UK is an American poodle, particulary in the past 10 years. And since the fall of the USSR, much of Eastern Europe has been begging to be America's buddy.
Re: Strong Currency prevents Exports
Street Smart
2/26/2012 1:35:49 PM
Depends on your definition of "foreseeable," @Value Hiker. Not this year, but within the next five years for sure. Right now, everyone has too much exposure; the world economic system as we know it truly could unravel if the EU ceased to exist.
But I honestly believe that stepping off the merry-go-round is Germany and France's long-term goal. Where's the upside for Germany? I think they've seen the future and it's nothing but an uber headache! Achtung, baby!
Re: Strong Currency prevents Exports
Value Hiker
2/26/2012 1:13:26 PM
@streetsmart, are you predicting that EU will fall apart in foreseeable future? I agree it is a tough job to unite all these different countries under one flag, but they made it. Now it will be even tougher for these countries to let EU go.
Re: Strong Currency prevents Exports
mInvestor
2/26/2012 10:07:26 AM
@StreetSmart,
Thank you, I was thinking what history we can compare to the current situation in EU. Right, the Marshall Plan is a good and recent example.
Keeping a united EU is a big challenge, and keeping a country like Greece in EU is just impossible. I like in the long run it will be good for Greece and other EU countries that Greece leaving ASAP.
Well, I am going to read about Marshall plan, it could be interesting.
Re: Strong Currency prevents Exports
Street Smart
2/25/2012 11:20:11 AM
@minvestor, I think your "prescription" for Greece to move forward is spot on. WHY is it so obvious to us and so difficult for Europe to see?
Last week I had occasion to refresh my knowledge of post-WWII European history--Marshall Plan, origins of the Cold War, US entry into Viet Nam, etc., and two things jumped out at me:
First, Europe is really good at bullying the US and we take it. Second, Europe couldn't unite to screw in a light bulb.
Honestly, I think the entire EU is living on borrowed time...
Re: Strong Currency prevents Exports
mInvestor
2/25/2012 10:34:28 AM
@PredicatbleChaos,
Yes, the salary control (or lower) will be one of methods have to be applied to help Greece. Nobody is going to like it, unfortunately it's necessary.
Devalue the currency to help on export is a common strategy, Japan and China are two examples. And since US dollar getting weak recently, the US export has been significantly improved.
If Greece stays in EU and uses euro as its currency, it's going to be difficult for Greek central bank to devalue the currency.
Plus, the economy is Greece is sigificantly different to western europe. It has been a challenge for Greece to keep up with others anyway.
My feeling is Greece will eventually leave EU.
Re: What a mess
Phoenix
2/25/2012 1:19:20 AM
@ Lenore thank you for the great summary of this messy issue. I think that one more bailout wouldn't make much of a difference. The best course of action would be for Greece to leave the EU so that they can devalue its currency and start a traditional economic recovery. If Greece plans to stay in the EU it will need to do many changes including work ethics, culture and the attitude and behaviour of its people to keep up with that of it's dominant neighbors like Germany to be competitive.
Thanks for the great update, @Lenore! In addition to being grateful for your analytical skills, I'm also grateful that Dominique Strauss-Kahn was able to step down from the IMF when he did in order to concentrate on running his alleged prostitution ring. If he were trying to oversee two sets of messy affairs, that would really be something to see!
Yes the Euro is a strong currency, but what prevents Greek companies from paying their employees 20% fewer Euro's or 30%? Some of the austerity measures are already reducing incomes for Greek workers, why can't this get Greece to the point where it can export even while it still uses the Euro?
Related topic - would you be surprised to learn that the top politicians in Greece are exempting themselves from the wage reductions they've negotiated as part of the austerity package? This is just wrong on so many levels.
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