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This may have perked up alot of interest to our cousins and cousins second removed (UK and Ireland respectively) as the global recession has garnered increasingly interesting news and response regarding how the international community has come to the aid of nations troubled by financial woes.

Ireland, as previous mentioned in a prior thread- has all but caved in to international support regarding a multi-billion euro bailout by the eurozone coupled with an overhaul by the IMF delegates who are now as we speak setting the terms for how Ireland will recover fiscally.

The trend has been that small countries that have become too laden with debt and in danger of going under (or may destabilize the market, currency, or international market) have been bailed out by larger entities.

Iceland- had its three major banks sink. Money sitting in Icelandic banks from other nations has been difficult to extract. Nationalizatio of at least one bank occured. Government members who once rejected EU membership voted overwhelmingly to try and enter thre eurozone. The IMF and other nations (Russia, Poland, Netherlands, ect.) have agreed to bailout Iceland at the cost of future revenues from the country.

Greece- spending freely, borrowing regularly, and bookeeping found to be horribly mismanaged. After this revelation, the debt crisis of the country soared to epic proportions, prompting a response that including an IMF/EU backed backout that essentially handed the policy making for the financial aspects of the country over to an austerity measure aimed at raising taxes and cutting public worker compensation and wages.

The trend has been a much more coordinated response to the financial crisis. However, for each country that cannot stand on its two legs, the bailouts have increasingly taken the reins of the fiscal policy from the countries in fiscal debt away and handing it over to foreign control.

I leave it open to you Dakka-ites to give your opinion on the matter or to give your interpretation on this matter.

Guardian News-

http://www.guardian.co.uk/commentisfree/2010/nov/21/ireland-bailout-economy-imf-euro

http://www.guardian.co.uk/business/2010/nov/21/six-days-that-humbled-ireland

Small countries with borders delineated by totally irrelevant geographical features (rivers) or increasingly irrelevant cultural differences (all of the EU) need not actually be separate. False social and economic differentiation creates weakness and enables corruption while making it difficult to effectively combat largescale issues. The EU is a prime example of how fragmented government doesn't work alongside economic fluidity. The obvious counterpoint being the united states which has reliably responded to economic hardship with reduced differentiation between subregions (states) and has seemingly always been better for it (arguably until now at least, when the bottom risks falling out due to an inability to work through it's own dated and highly obstructive political system).

ShumaGorath wrote:Small countries with borders delineated by totally irrelevant geographical features (rivers) or increasingly irrelevant cultural differences (all of the EU) need not actually be separate. False social and economic differentiation creates weakness and enables corruption while making it difficult to effectively combat largescale issues. The EU is a prime example of how fragmented government doesn't work alongside economic fluidity. The obvious counterpoint being the united states which has reliably responded to economic hardship with reduced differentiation between subregions (states) and has seemingly always been better for it (arguably until now at least, when the bottom risks falling out due to an inability to work through it's own dated and highly obstructive political system).

So you believe the smaller fragmented political units of a much larger political entity has undermined the ability of all participants to react to the financial crisis?

WarOne wrote:

ShumaGorath wrote:Small countries with borders delineated by totally irrelevant geographical features (rivers) or increasingly irrelevant cultural differences (all of the EU) need not actually be separate. False social and economic differentiation creates weakness and enables corruption while making it difficult to effectively combat largescale issues. The EU is a prime example of how fragmented government doesn't work alongside economic fluidity. The obvious counterpoint being the united states which has reliably responded to economic hardship with reduced differentiation between subregions (states) and has seemingly always been better for it (arguably until now at least, when the bottom risks falling out due to an inability to work through it's own dated and highly obstructive political system).

So you believe the smaller fragmented political units of a much larger political entity has undermined the ability of all participants to react to the financial crisis?

I believe that the size but more importantly the global international integration of modern economics has made it difficult for small actors to make financial regulations and decisions that can have a meaningful impact, especially when they lack the capitol to do so. Ireland is a case in point, it simply doesn't have the muscle to deal with it's problems alone, and while the EU certainly does they are two separate entities. This would have been far less of an issue 50 years ago when the majority of economies were local, but thats not something that we're ever going to go back too. Globalization is a dispersed centralization of global economics, as a governments most important job is the enforcement of laws, and as financial laws are the most important thing to a functioning global economy, governments need to be better able to act on a global scale. Piecemeal responses to trouble just don't work any more.

I am way too buzzed for this right now.

Radix omnium malorum avaritia.

I'll post in more detail on this topic when I have a bit more time, so this is a brief outline of what I think.

- Shuma is broadly correct, however the cultural differences in Europe can't be dismissed too easily because they are pretty entrenched in culture. It's a bit like saying the US would be awesome as a communist state if everyone did everything right- it's not too useful.

-However, when a small, irresponsible country (because not all small countries are suckfailing in the recession, just the corrupt and irresponsible ones) crashes and burns and must be bailed out with TAXPAYER MONEY from another nation, well, then I believe that other nation has every goddamned right to make demands. I am FURIOUS that we need foreign money again, and disgusted at the attitudes of some of my countrymen in regard to this. Just take the reins away from us, we're obviously not culturally mature enough to handle independance. This may be because of the legacy of colonialism and civil war but it's still a bloody fact.

I'll post in more detail on this topic when I have a bit more time, so this is a brief outline of what I think.

- Shuma is broadly correct, however the cultural differences in Europe can't be dismissed too easily because they are pretty entrenched in culture. It's a bit like saying the US would be awesome as a communist state if everyone did everything right- it's not too useful.

They also don't really exist. They exist because of borders, not because the cultures those borders represent are particularly different.

Europe is basically funded by several big, stable northern nations including Germany, France and the UK.

The UK doesn't have to pay a lot into the save the Euro fund because we aren't in the Euro.

Chancellor Merkel somehow persuaded the Germans to bail out Greece.

They are pretty much fed up with the idea that they should slave on to the age of 65 paying high taxes so that Greeks can pay low taxes and retire on a full pension at 52.

The Germans might be persuaded to save Eire, because it is a small country with a relatively small debt. They aren't going to save Portugal, Spain and Italy as well.

Kilkrazy wrote:The Germans might be persuaded to save Eire, because it is a small country with a relatively small debt.

True. The bailout fund is a really big number when you look at the Irish economy, but not a very small number when you look Europe as a whole.

They aren't going to save Portugal, Spain and Italy as well.

I believe the hope is that propping up Greece and Ireland is likely to make it less likely that Spain and Italy will fall over.

sebster wrote:

Kilkrazy wrote:The Germans might be persuaded to save Eire, because it is a small country with a relatively small debt.

True. The bailout fund is a really big number when you look at the Irish economy, but not a very small number when you look Europe as a whole.

They aren't going to save Portugal, Spain and Italy as well.

I believe the hope is that propping up Greece and Ireland is likely to make it less likely that Spain and Italy will fall over.

How does the economic situation look in the other countries in the eurozone that bear watching.

I heard that Italy was doing okay, but then again...

It could be one small step before it becomes a Weimar Republic:

It is hard to tell what is happening in the Italian economy because a lot of it is off the books.

Or transacted in cheese.

dogma wrote:Or transacted in cheese.

Nice find dogma. It will now go to the thread about it (and other things).

dogma wrote:Or transacted in cheese.

So awesome.

This is a system of finance I can support fully.