Eurozone recovery runs out of steam

Ulster-Lad

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The eurozone’s economic recovery is running out of steam, a closely watched survey of industry indicated on Thursday, with continuing growth in Germany and France concealing a contraction in output in the rest of the bloc for the first time in nearly a year.

The Markit purchasing managers’ index shows growth in economic output across the eurozone fell to a 12-month low in October. However, the 53.4 reading, down from 54.1 in September, remains above the 50-point line which separates economic growth from recession.

The PMI survey – compiled by interviewing 4,000 companies in the manufacturing and services sectors across the eurozone – is consistent with recent economic data which suggest a growing chasm between the “core” economies led by Germany and the lacklustre prospects of the “peripheral” economies dealing with large sovereign debt piles.

It also highlights the exposure of the eurozone economy to slower growth in other regions, notably the US, in part driven by the appreciating euro.
FT.com / Brussels / Economy - Eurozone recovery runs out of steam

Not quite officially a double dip but downward spiralling. The EU is being propped by Germany and France at the moment who have shown strong growth while the rest of the EU declined. The problem is compounded by the appreciating Euro.

How long will they (Germans & French) tolerate us?
 


Squire Allworthy

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Ghosts of the Weimar Republic haunt Germany. Unfortunately the game afoot at the minute does not suit the hand the Germans would like to play. The Euro is grossly over valued against the dollar and Sterling. It is damaging the possibility of economic recovery.

People tend to think of Germany as an economic power house. Unemployment is around 8%. Some say it is higher and that 10% is nearer the mark. Also some of the regions have very high levels of debt. Germany needs growth as does the rest of the Eurozone and for that to happen the value of the Euro needs to fall back.


And of course there are outside considerations and those who do not want the currency to lose value.

China buying euros assets to stabilize currency-Medley | Reuters
 

ChickenBiryani

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There never was a recovery anywhere in the world. It was all just deficit spending and money printing. The artifical stimulus is wearing off and another caffeine rush is required.

The global financial system is broken, and all they have done is paper over the cracks, to keep the fiat currency ponzi scheme going, but soon it will be apparent to all that the emperor has no clothes.
 

Squire Allworthy

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There never was a recovery anywhere in the world. It was all just deficit spending and money printing. The artificial stimulus is wearing off and another caffeine rush is required.

The global financial system is broken, and all they have done is paper over the cracks, to keep the fiat currency ponzi scheme going, but soon it will be apparent to all that the emperor has no clothes.


I have a lot of sympathy for that point of view, however there are many with vested interests in trying to keep the wheels on the existing vehicle. That in turn prevents proper debate on a sensible way forward. I wouldn't for one minute advocate a return to the gold standard, but here needs to be change and the ability of governments to intervene curtailed.

However we know that governments are unlikely to rush into anything that restricts them in anyway. So we must assume more of the same.
 

Ulster-Lad

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I have a lot of sympathy for that point of view, however there are many with vested interests in trying to keep the wheels on the existing vehicle. That in turn prevents proper debate on a sensible way forward. I wouldn't for one minute advocate a return to the gold standard, but here needs to be change and the ability of governments to intervene curtailed.

However we know that governments are unlikely to rush into anything that restricts them in anyway. So we must assume more of the same.
Agreed, we are simply the sheep being led at this point. We need reform.
 

MPB

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Cassandra Syndrome

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There never was a recovery anywhere in the world. It was all just deficit spending and money printing. The artifical stimulus is wearing off and another caffeine rush is required.

The global financial system is broken, and all they have done is paper over the cracks, to keep the fiat currency ponzi scheme going, but soon it will be apparent to all that the emperor has no clothes.
+1

The governments simply either printed more money or borrowed funds and then spent it and added those figures to a plummeting GDP figure.

A 6 year old can do that. No real wealth creation just more leverage.

No doubt the fanatical Eurotron posters here will be on soon waffling about some improvement in some idiotic Purchasing Managers Opinion poll from a bunch of oligarch type corporations who have been socialised.

Where are they today?
 

FutureTaoiseach

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It is clear that the Euro is killing our exporters:
Irish Times said:
Exports fell in August, declining 4 per cent to on a seasonally adjusted basis from a month earlier.
Total exports for the month were €7.6 billion, compared with €7.9 billion in July.
However, analysts said the figures were still strong, coming after July's near-record performance. Compared to a year earlier, exports were 14 per cent higher...Bloxham's chief exconomist Alan McQuaid said the chief worry for indigenous Irish exports is the renewed weakness in the dollar and sterling, which will make it more expensive for exporters to sell their goods into the US and UK....
 
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Cassandra Syndrome

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It is clear that the Euro is killing our exporters:
The Euro is completely rancid. If we had our own currency floating it would adjust according to our needs, the right rate to export successfully and the right rate to afford the commodities that we import. It is only by mere fluke that the Euro could be at the right rate, which never happens. At €1.18 back in May / June, all the food and energy commodities were too expensive to import leading to a spike in prices, now that it is at €1.40 its too high for our exporters. The swing is too volatile for our producers and importers to maintain stability and the natural rate is never homed in on.
 

NotoriousFin

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The Euro is completely rancid. If we had our own currency floating it would adjust according to our needs, the right rate to export successfully and the right rate to afford the commodities that we import. It is only by mere fluke that the Euro could be at the right rate, which never happens. At €1.18 back in May / June, all the food and energy commodities were too expensive to import leading to a spike in prices, now that it is at €1.40 its too high for our exporters. The swing is too volatile for our producers and importers to maintain stability and the natural rate is never homed in on.
Or preferably a free-currency, so as to allow the markets to regulate the monetary system themselves ;)
 

Ulster-Lad

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Or preferably a free-currency, so as to allow the markets to regulate the monetary system themselves ;)
We should be able to regulate our own monetary system. The EU really don't care about what is good for the people of Ireland. If they did they would have put us out of the Eurozone by now.
 

FutureTaoiseach

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Hopefully this will help wake up the Irish people from their Lisbon torpor in time to defeat the Merkel-Sarkozy Pact.
 

hiding behind a poster

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We should be able to regulate our own monetary system. The EU really don't care about what is good for the people of Ireland. If they did they would have put us out of the Eurozone by now.
Oh, so doubling the cost of mortgage debt (to be optimistic about it) would be good for us? How so?
 

FutureTaoiseach

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Oh, so doubling the cost of mortgage debt (to be optimistic about it) would be good for us? How so?
It would have prevented the bubble in the first place. He's not calling for higher interest rates in 2010, but rather to return to an independent monetary-policy for Ireland. We were doing fine in 1998 and 6 months before we entered EMU (on January 1st 1999) we had 10% interest rates and just 1% inflation. For the first 5 yrs of EMU we could have done with interest rates like that. It would have kept housing-demand under control combined with a more restrictive immigration-policy and blocking EU Enlargement (as those immigrants needed somewhere to live - doh). As the German economy recovers we now face the prospect of having rising interest-rates as damaging to the deflated Irish economy as the low interest-rates were to the overheating one.
 

paulp

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It would have prevented the bubble in the first place. He's not calling for higher interest rates in 2010, but rather to return to an independent monetary-policy for Ireland. We were doing fine in 1998 and 6 months before we entered EMU (on January 1st 1999) we had 10% interest rates and just 1% inflation. For the first 5 yrs of EMU we could have done with interest rates like that. It would have kept housing-demand under control combined with a more restrictive immigration-policy and blocking EU Enlargement (as those immigrants needed somewhere to live - doh). As the German economy recovers we now face the prospect of having rising interest-rates as damaging to the deflated Irish economy as the low interest-rates were to the overheating one.
agreed, but starting from where we are now, what would you recommend?
 

FutureTaoiseach

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agreed, but starting from where we are now, what would you recommend?
A reform of the Eurozone to allow for a return to separate interest rates - or a withdrawal from the Euro outright. Iceland is starting to recover because its weak currency makes it exports cheaper in export-markets. The period of 'real growth' starting in the 1990's (as opposed to the bubble after 2001) was largely a result of devaluation of the Punt. Withdrawl from the Euro would have similar consequences. The economy is being sacrificed on the altar of European integration. It is demeaning to see our politicians engaging in constitutional-prostitution when the Euro-pimp has taken us for every penny through the €200 billion devastation of our fishing-industry, the shrinking of our economy to its 2002 size through a housing-crash largely caused by the ECB's imposition of pro-cyclical interest rates, and the 2004 Enlargement's mass-importation of cheap-labour which overheated the housing-market.
 

jimmyfour

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A reform of the Eurozone to allow for a return to separate interest rates - or a withdrawal from the Euro outright. Iceland is starting to recovery because its weak currency makes it exports cheaper in export-markets. The period of 'real growth' starting in the 1990's (as opposed to the bubble after 2001) was largely a result of devaluation of the Punt. Withdrawl from the Euro would have similar consequences. The economy is being sacrificed on the altar of European integration.
And Ireland's exports what besides hot air from politicians like Coughlan?
 


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