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UK May Never Fully Recover if Greece Exits Euro!
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Michael R
May 19, 2012, 9:03:13 PM5/19/12
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Top forecaster says Britain would face long recession as key Greek
Leftist Radical frames crisis as people v capitalism.
A Greek exit from the single currency threatens to plunge Britain into
a second recession equal in ferocity to the record postwar slump of
2008-09, according to the expert responsible for the government's
economic forecasting.
Robert Chote, chair of the Office for Budget Responsibility, who was
speaking to the Guardian as world financial markets staggered to the
end of a week that rekindled memories of the collapse of Lehman
Brothers in 2008, warned that there was risk that a fresh downturn
would do irreparable damage to the UK. Britain has made up less than
half the ground lost when output plunged by more than 7% in 2008-09,
and Chote said there was a risk that "you go down and you never quite
get back up to where you started".
In a separate exclusive interview, Alexis Tsipras, the increasingly
powerful 37-year-old Greek politician now regarded by many as holding
the future of the euro in his hands, told the Guardian that he was
determined "to stop the experiment" with austerity policies imposed by
Germany. He described the tax increases and spending cuts as a "crime
against the Greek people".
The leader of the Syriza party, whose success in last month's general
election has led to political paralysis in Athens and a second general
election, said he wanted Greece to stay in the euro, but was fighting
capitalism. "On the one side there are workers and a majority of
people, and on the other are global capitalists, bankers, profiteers
on stock exchanges, the big funds. It's a war between peoples and
capitalism ... it is the international financial system, and more
especially banks, that are gaining most".
The head of the UK's OBR said the deepening crisis in the eurozone
could force him to tear up his forecasts, made only two months ago,
that Britain would post modest growth of 0.8% this year. "The concern
is that you end up with an outcome in the eurozone that creates the
same sort of structural difficulties in the financial system and in
the economy that we saw in the past recession, and that has
consequences both for hitting economic activity in the economy, but
also its underlying potential," said Chote.
With economic output in the UK still 4% below its peak level when the
recession began in early 2008, the prime minister and the governor of
the Bank of England, Sir Mervyn King, have expressed concern in recent
days about the vulnerability of Britain to the eurozone.
Chote said he was particularly concerned about the possibility that a
second deep recession would leave permanent scars. "That means not
just that the economy weakens and then strengthens again – it goes
into a hole and comes out – but that you go down and you never quite
get back up to where you started."
Shares in London closed down for a third week, with the jittery mood
in financial markets pushing the FTSE 100 below 5,400 for the first
time this year. German and French stock markets were also depressed,
with even the much-anticipated stock market debut of Facebook in New
York failing to lift spirits.
Greece's caretaker prime minister, Panagiotis Pikramenos, said the
German chancellor, Angela Merkel, had suggested in a phone call to the
Greek president, Karolos Papoulias, on Friday that Greece hold a
referendum on its continued membership of the single currency
alongside next month's elections, in an apparent attempt to encourage
voters to back mainstream parties who support the current austerity
programme.
The German government said that no suggestion of the kind had been
made. But the Greek government was insistent, and said that Pikramenos
had rejected the suggestion because he does not have the power to call
a referendum.
Merkel's finance minister, Wolfgang Schäuble, said the eurozone crisis
could last two more years, while financial market speculation that
Greece's days in the euro were numbered cast a shadow over the annual
gathering of leaders of the G8 western industrial nations at Camp
David. Canada's prime minister, Stephen Harper, voiced his frustration
at Europe's leaders, demanding tough action to tackle the crisis.
In Brussels, the European commission denied comments by Europe's trade
minister, Karel de Gucht, that preparations were being made for
Greece's departure from the single currency.
Meanwhile, analysts at Deutsche Bank predicted that the weak state of
Ireland's banks could result in the former Celtic tiger requiring a
second bailout, and in Spain there were reports that the government
would call in Goldman Sachs to help sort out its banks after 16
suffered credit downgrades on Thursday.
In an echo of the months leading up to the Lehmans collapse, Mike
Smith, chief executive of Australia and New Zealand Banking Group,
said the turmoil in the eurozone meant Australian banks were being
frozen out of money markets when seeking funds.
Chote said there were so many uncertainties around what might happen
with Greece and the eurozone that trying to produce firm predictions
was not "particularly helpful".
But the OBR has tried to quantify the impact of a disorderly sovereign
debt restructuring in the eurozone on Britain – and the figures make
grim reading. Britain would be plunged into recession for two years,
according to the OBR analysis, published in its most recent economic
and fiscal outlook report. There would also be deflation and
unemployment would reach almost 11% by 2013-14, with debt subsequently
reaching more than 90% of GDP.
Chote said these projections were of limited value because the
eurozone crisis could develop in so many different ways. "For example,
one issue would be, do difficulties in the eurozone make it cheaper or
more expensive for the UK government to borrow?" he said. "If it makes
investors more nervous about risk in general, it might make it more
expensive. If they see the UK as more of a safe haven, it might make
it less expensive."
Source:
http://www.guardian.co.uk/business/2012/may/18/uk-greece-exits-euro
Leftist Radical frames crisis as people v capitalism.
A Greek exit from the single currency threatens to plunge Britain into
a second recession equal in ferocity to the record postwar slump of
2008-09, according to the expert responsible for the government's
economic forecasting.
Robert Chote, chair of the Office for Budget Responsibility, who was
speaking to the Guardian as world financial markets staggered to the
end of a week that rekindled memories of the collapse of Lehman
Brothers in 2008, warned that there was risk that a fresh downturn
would do irreparable damage to the UK. Britain has made up less than
half the ground lost when output plunged by more than 7% in 2008-09,
and Chote said there was a risk that "you go down and you never quite
get back up to where you started".
In a separate exclusive interview, Alexis Tsipras, the increasingly
powerful 37-year-old Greek politician now regarded by many as holding
the future of the euro in his hands, told the Guardian that he was
determined "to stop the experiment" with austerity policies imposed by
Germany. He described the tax increases and spending cuts as a "crime
against the Greek people".
The leader of the Syriza party, whose success in last month's general
election has led to political paralysis in Athens and a second general
election, said he wanted Greece to stay in the euro, but was fighting
capitalism. "On the one side there are workers and a majority of
people, and on the other are global capitalists, bankers, profiteers
on stock exchanges, the big funds. It's a war between peoples and
capitalism ... it is the international financial system, and more
especially banks, that are gaining most".
The head of the UK's OBR said the deepening crisis in the eurozone
could force him to tear up his forecasts, made only two months ago,
that Britain would post modest growth of 0.8% this year. "The concern
is that you end up with an outcome in the eurozone that creates the
same sort of structural difficulties in the financial system and in
the economy that we saw in the past recession, and that has
consequences both for hitting economic activity in the economy, but
also its underlying potential," said Chote.
With economic output in the UK still 4% below its peak level when the
recession began in early 2008, the prime minister and the governor of
the Bank of England, Sir Mervyn King, have expressed concern in recent
days about the vulnerability of Britain to the eurozone.
Chote said he was particularly concerned about the possibility that a
second deep recession would leave permanent scars. "That means not
just that the economy weakens and then strengthens again – it goes
into a hole and comes out – but that you go down and you never quite
get back up to where you started."
Shares in London closed down for a third week, with the jittery mood
in financial markets pushing the FTSE 100 below 5,400 for the first
time this year. German and French stock markets were also depressed,
with even the much-anticipated stock market debut of Facebook in New
York failing to lift spirits.
Greece's caretaker prime minister, Panagiotis Pikramenos, said the
German chancellor, Angela Merkel, had suggested in a phone call to the
Greek president, Karolos Papoulias, on Friday that Greece hold a
referendum on its continued membership of the single currency
alongside next month's elections, in an apparent attempt to encourage
voters to back mainstream parties who support the current austerity
programme.
The German government said that no suggestion of the kind had been
made. But the Greek government was insistent, and said that Pikramenos
had rejected the suggestion because he does not have the power to call
a referendum.
Merkel's finance minister, Wolfgang Schäuble, said the eurozone crisis
could last two more years, while financial market speculation that
Greece's days in the euro were numbered cast a shadow over the annual
gathering of leaders of the G8 western industrial nations at Camp
David. Canada's prime minister, Stephen Harper, voiced his frustration
at Europe's leaders, demanding tough action to tackle the crisis.
In Brussels, the European commission denied comments by Europe's trade
minister, Karel de Gucht, that preparations were being made for
Greece's departure from the single currency.
Meanwhile, analysts at Deutsche Bank predicted that the weak state of
Ireland's banks could result in the former Celtic tiger requiring a
second bailout, and in Spain there were reports that the government
would call in Goldman Sachs to help sort out its banks after 16
suffered credit downgrades on Thursday.
In an echo of the months leading up to the Lehmans collapse, Mike
Smith, chief executive of Australia and New Zealand Banking Group,
said the turmoil in the eurozone meant Australian banks were being
frozen out of money markets when seeking funds.
Chote said there were so many uncertainties around what might happen
with Greece and the eurozone that trying to produce firm predictions
was not "particularly helpful".
But the OBR has tried to quantify the impact of a disorderly sovereign
debt restructuring in the eurozone on Britain – and the figures make
grim reading. Britain would be plunged into recession for two years,
according to the OBR analysis, published in its most recent economic
and fiscal outlook report. There would also be deflation and
unemployment would reach almost 11% by 2013-14, with debt subsequently
reaching more than 90% of GDP.
Chote said these projections were of limited value because the
eurozone crisis could develop in so many different ways. "For example,
one issue would be, do difficulties in the eurozone make it cheaper or
more expensive for the UK government to borrow?" he said. "If it makes
investors more nervous about risk in general, it might make it more
expensive. If they see the UK as more of a safe haven, it might make
it less expensive."
Source:
http://www.guardian.co.uk/business/2012/may/18/uk-greece-exits-euro
Alexander Arnakis
May 19, 2012, 11:43:57 PM5/19/12
to
On Sat, 19 May 2012 18:03:13 -0700 (PDT), Michael R
<mrmic...@gmail.com> wrote:
>Top forecaster says Britain would face long recession as key Greek
>Leftist Radical frames crisis as people v capitalism.
>
>A Greek exit from the single currency threatens to plunge Britain into
>a second recession equal in ferocity to the record postwar slump of
>2008-09, according to the expert responsible for the government's
>economic forecasting.
>
Then the conclusion should be that Britain should move heaven and
<mrmic...@gmail.com> wrote:
>Top forecaster says Britain would face long recession as key Greek
>Leftist Radical frames crisis as people v capitalism.
>
>A Greek exit from the single currency threatens to plunge Britain into
>a second recession equal in ferocity to the record postwar slump of
>2008-09, according to the expert responsible for the government's
>economic forecasting.
>
earth to keep Greece from leaving the euro, by paying so that
austerity can be eased. All the European countries should do likewise.
Far cheaper for them in the long run than to do nothing and thereby
force Greece to exit.
Michael R
May 20, 2012, 3:42:05 AM5/20/12
to
> Then the conclusion should be that Britain should move heaven and
> earth to keep Greece from leaving the euro, by paying so that
> austerity can be eased. All the European countries should do likewise.
> Far cheaper for them in the long run than to do nothing and thereby
> force Greece to exit.
Your conclusions are wrong because you are a dumb extremist.
> earth to keep Greece from leaving the euro, by paying so that
> austerity can be eased. All the European countries should do likewise.
> Far cheaper for them in the long run than to do nothing and thereby
> force Greece to exit.
Alexander Arnakis
May 20, 2012, 8:22:21 AM5/20/12
to
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