Portugal is a 3rd world country
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7 May 2011, 17:55
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Journals
Time to wake up hairyarms
EU would be little bit of a lesser joke if all the poor nations would be excluded. That means nations like Portugal.
Your country is in a deep financial crisis and judging by some of the posters in Xfire, it seems like you have no idea about it but instead you go on like bragging like you are doing good. Open your eyes jesus christ...
EU would be little bit of a lesser joke if all the poor nations would be excluded. That means nations like Portugal.
Your country is in a deep financial crisis and judging by some of the posters in Xfire, it seems like you have no idea about it but instead you go on like bragging like you are doing good. Open your eyes jesus christ...
Our government? You've got to be kidding.
win for germany
WIN FOR EVRYONE ( countys wich are in EU , not the broke ones )
win for u
It just depends on the future whats smarter! And since noone can look in the future nobody knows.
thats the fact
watch the beginning and 6:16
thxxxxxx
over 60% is jobless ther so
just i dont trust negros
"
AlienWare on 07/05/11, 18:23:46 PM | Report | Reply
beeing jobless is good life?:D
over 60% is jobless ther so "
and germany need to stop giving money
all countys who have problems are trying to get into EU , to get money
portugese = negros wount be avaible , 2 much drugs
i have more faith in portugal paying it back than in greece
Their debt is denominated in euro. If they leave the eurozone their debt burden will increase by atleast another 50 or 100% because their new currency would be complete worthless. This way, the german/french banks will have to swallow up at least 70-80% of the losses on their greek/portuguese bunds because they cant pay it with their worthless new currency. This will create only another banking crisis. The difference is this one will be even worse then the last one.
Oh, and if portugal & greece go outside the eurozone they can enjoy living 3rd world living standards. Have fun buying oil and other commodities on the world markets with a worthless currency.
Yea, way to go!!
Not.
Matter of opinion and there are only bad options !
Wouldn't be surprised if in the summer there would be also Spain and Italy in same situation.
Aslong as Greece & Portugal don't default on their debt we (Finland, Germany, etc...) will earn money on it through a risk premium.
My solution is this:
Restructure Greece's debt. Prolonge the timespan to pay off their debt, lower the interest rate a bit and let's see if that's enough. If it's not, take a 10-20% haircut on Greece's debt. At least it's better to lose 10-20% on your Greek bunds then to lose 70-80% on it if they default and/or leave the eurozone.
Another solution is eurobunds but then again, the PIIGS could abuse this situation because all the added debt is european debt (instead of national debt now) and is basically guaranteed by every eurozone member. A lot of control is needed in this case because the northern, richer countries would give up their low interest rate (which is a massaive advantage) in favour of a european rate (which would be low aswell but leaves a higher risk because of the lack of fiscal responsibility from the southern countries).
Still I think that solution isn't right cause it only makes a new bankcrise happen and cause moral hazard problem.
Interest rate for Greece is atm 16,4(at wed) and might be a even bit higher for portugal? So much how much other EU countries get if they borrow money to Greece & Portugal? Is it EU's bank normal rate (2,152 atm) + premium which countries want.
E: Those solutions would use too much power since EU isn't going to be state or is it? I would like not to let EU to control finland's governement more(as I am agaisnt EU in principal yet it is bad but must for countries like Finland). Only my opinion, but like I said there isn't good solution for this, only bad ones and those will cause new problems :)
I wouldn't do a haircut now. Maybe in 1 or 2 years when the european banks have a higher fractional reserve because at the moment a lot of banks are still in problems writing off their real estate losses from Ireland, etc... In a couple of years they could be financially in a much better position and absorb the 10-20% loss on greek bunds more easily.
You just have to look at the yields of your country (for Germany it's 3,21% now) the time the bail-out fund was created. Add a 2% risk premium and another 1% sort of 'punishment' premium because a bail-out fund isn't supposed to be something you can always fall back on, it should be avoided at all costs. It's difficult to find numbers but at first it was between 5 and 7% but it could have been alreay renegotiated downwards because it's still too high for Greece. The 2% risk premium is what countries like Finland and Germany get as profit for taking the risk as being an intermediary.
Well that is one option, but there is also big chance that Greece & Portugal can't stand on their own feets and they are going down faster. And basically I think thet can't cut down their social system (tbh I don't know what kind of system they have in comparison with Finland)since the first "saving money" is going to their old creditors and AFTER THAT they have to cut down their money using.
Ye I know what that is but since I don't real numbers didn't want to say those. There is still that problem that Greece & Portugal might get in bankrupt and we wouldn't get back any money. But ye might be only solution even if I don't like it at all. That saving money is only first part of the problem and after that there are still a lot of problems. And it is another cause
There could be 2 things you were talking about :p
Inflation. The main priority for the ECB is to tackle a too high inflation. Why does the ECB raise the intrest rate? Because now the banks can borrow from the ECB at a lower rate, basically free money. That money is poured in the economy but obviously when so much money go so fast in the economy, you create inflation. What the ECB does is to try and make sure the eurozone members are not addicted to cheap money and tackle inflation. On the other hand a higher interest rates makes borrowing more expensive and so the PIIGS will have to pay more to borrow from the markets.
If you were talking about Greece leaving the eurozone and losing the value of their new currency, it's quite easy. Greeks would put their savings into safe, stable currencies like the euro and dollar instead of seeing their savings become worthless and investors would run away because let's face it, not many investors would have confidence in a new greek currency when the country just defaulted, eh? :p
And yea, there is a possibility that Greece & Portugal can't pay the intrests on their growing debt. That's why the Greek debt needs to be restructured so they have more time to pay back the bailout money + at a lower rate. Otherwise they can't pay it at all and can only default. At the same time, reforms need to be made, less corruption, higher income and try to get out of it like this. If not, we should lower the debt burdon a bit otherwise we see no money back at all. This would be catastrophic for the banks all over europe who lend money to them + if they can't, the taxpayers again.
Hard to explain, but I think this crisis will only be part of new crisis since is it quite likely that other countries will fall down too(only my personal opinion and think there would be quite good for that). So basically I think this crisis and inflation has so much things in common so both will feed each others.
Yeah that is completely true, but I wouldn't kick Greece out. It just drags other countries into problems which thet have, inevitably created themself. Tbh this problem is so complex that when you find new solution there is only 10more problems. And like I said before this is best solution from 2 which both are bad :D. So there isn't win win situation.
If Greece & Portugal can't pay back their debts and IF Spain and Italy go down as well. Rest of EU countries have huge problems and most likely some of them will go down or at least will have severe problems on handling this situation. Like you said changes has to be made but not sure what those should be. Maybe euro should be connect with US dollar, no idea(tbh that was quite stupid idea but nvm!).
I think that this problem is really big and really few understands how it is going to effect on us( like these journals in crossfire are just so randoms).
I gave my solution in my first comment to you.
Italy & Spain are bigger countries and so have a bigger population and tax base to fall back on. Smaller countries are more vulnerable. Still it's possible yes but there are more parameters then just the debt that counts. Height of your debt, the evolution of your debt (is it increasing fast or not?), deficit, saving rate of a country (italians save a lot), is the debt mostly towards foreign countries or is the debt mainly in the hands of domestic people (eg. japan), in the case of belgium: having a government, growth prospective, unemployment, size of economy, etc... All these parameters are used to measure the credit rating of a country. If the credit rating get slashed like which happened a lot to Greece, Ireland & Portugal, you pay more to borrow from the markets which will in turn increase your costs etc.. You got the perspective against you, investors will lose confidence and sell their bunds = higher costs and your in a downwards spiral. This can happen fast.
Difficult to say if Italy or Spain will follow. Italy most likely not, Spain maybe, depending on the above parameters. The most important parameters is the evolution of spain's deficit, it's economic growth, unemployment rate and how healthy the spanish banks are. The EU can't afford to bail out Spain so the IMF will step in (well, both EU & IMF) but if spain needs to be bailed out this can lead to big trouble. They are a much bigger economy then portugal, greece or ireland and so this will have more influence on world markets/trade, etc..
If you have read all my comments in this journal, you'll have learned a lot about economics :)
you need to go back to school :D
However as a Brit with a double digit IQ I guess you are living proof that there are exceptions.
its like arguing with chimps on here so i do it no more.
idiots.
greetz
:DDDDDDDDDDDDDDD
One reason why wikipedia is free.
Switch to a resource based economy.
Problem fixed.