Subject: »PIIGS - economics problems

debt is not something like elf from fairytales, so nobody see him and he is still eating your food and so...

Good one, rumpelstiltskin :)

everybody here is talking about debts like.... system mistake, it is not my debt, why should pay it.... like it is some "elf" ... :-)

I will go to bank today and I will tell them that I am not gonna pay back my loan, cos I never see him and It is not mine :-DDD

(it is sad, but I am looser, I dont have any loan :-( )

I absolutely agree with your point of view. Not returning your debt with intention is actually stealing. If you borrow money and then you decide not to return it, you are a thief. You can always fall into problems and have a hard time returning the money, but then you are in a position to be humble and beg for some debt to be forgiven. But you simply cannot just arrogantly say that you will not return it. That's called stealing.

Maybe they just hope for what a Belgian (Francophone socialist) minister (Guy Mathot) once said:

"La dette publique, on ne sait pas comment elle est arrivée, mais elle disparaîtra d'elle-même."

Translation: "The public debt, we don't know where it came from, but it'll go away by itself."
(edited)

Why Italy is not Greece:
(and why I think Italy can not go to bancrupcy now)

- Average maturity of Italy bonds are much longer as in Greek case. So currently higher interests will make big problem for country later, not now.
- Italy is big economy, income from tax are nice and can solve Italian problems even with higher interests of current bonds.
- It is not just state debts, maybe 50% is from private sector so government has diversified risk.
- Italy has various resources of wealth, and 4th biggest storage of gold on the world.

But yes, I think they are after USA and Japaneses country with biggest debt, so they just have to turn around in domestic policy and start solving their problems.

good too :-)

"The public debt, we don't know where it came from, but it'll go away by itself."

Why admins didnt change yet the name of that topic.>?It should be called ''economy theories and views by economic scientists rumpil and rubinho.

Why? 'We' (rumpil has about a lot of things a different opinion than me, so 'we' is quite strange) don't forbid others to put their opinions here. I just try to show you why your point of view is completely wrong. Not paying your debt is theft. Nothing more, nothing less. Your government spent too much, so now, it'll have to spent way less and you'll have to accept it. I'm past the point I do actually care what the Greeks want. I don't mind how you pay, as long as you pay.

and it can not be called with "we" cos you are belgian, it is "inadmissible" :-DD

Translation: "The public debt, we don't know where it came from, but it'll go away by itself."

That attitude is like a paraphrase of Louis XV: "Après moi, le déluge" ("After me, the flood").

You probably have discussed everything in this topic.

Not paying your debt is theft, okay, I can see why you claim this.

What I think is strange in this game is the interest rate that some countries have to pay. In my view interest rate is based on 2 things.

1) The bank has to make money. Interest will have to be higher than inflation.
2) Interest is use to cover the risk. Loaning money to a country that can not be trusted comes at a higher risk, so interest is higher.

Now, what happens is that banks come up with the higher interest. I understand. But when the country, that couldn't be trusted in the first place, then can not repay their loans, other governments give the money to the bank? So high interest, so high income, but no risk, taxpayers in other countries will cover. Easy way of making money there...

In case of Italy: Italy has proved to be reliable in the past. They have high debts, but if the interest rate doesn't become too high, there's no problem whatsoever.

So, banks create the problem here. If Italy goes bust because of the problem created by the banks, the banks should be the ones to suffer the consequences.

Ohw and the power of credit rate agencies is way too big... Now France is the next victim, who follows....
(edited)

It is about free market, banks can do what they want. Italy can still ask "another" bank for help :-).

And one more thing, if Italy exceed safe level of debt then they are in risk everyday so, yes bank can play a game with them but it was their choose go to that risk level of debt.... EU said more than 60% of GDP is forbidden, so pls. dont blame banks, it is free market. Every state have own state bank, so where is problem :-) ?

I am not saying that it is good, but it is just free market. It is mistake of government in first place, that is all.

Exactly. It's a free market and economy is all about trust. When you don't trust your business partner you will either not do business with him or you will secure your interest (interesting synonim here) in any way you can. Higher interest only means lower trust of creditors in Italian government. Italian government should do a better job in generating that trust and/or borrow less money.

which countries have primary surpluses?
almost non

what countries will have problems if they suddenly stopped lending?
almost all

it is about bad system called democracy. These economics failures would be never here if governments are responsible. But people will never vote mostly politician party which are responsible, people will mostly vote for parties which promise you better life.... and this is why democracy is bad....

Now, what happens is that banks come up with the higher interest. I understand. But when the country, that couldn't be trusted in the first place, then can not repay their loans, other governments give the money to the bank? So high interest, so high income, but no risk, taxpayers in other countries will cover. Easy way of making money there...

That's why eventually, the country (that couldn't be trusted) has to repay the other countries. Otherwise, there is no responsibility for the countries and its politicians. "If you can't pay back your debt, we'll do that for you."

In case of Italy: Italy has proved to be reliable in the past. They have high debts, but if the interest rate doesn't become too high, there's no problem whatsoever.

It's a matter of trust in Italy. There is not a lot of it. Italy is responsible for that.

So, banks create the problem here. If Italy goes bust because of the problem created by the banks, the banks should be the ones to suffer the consequences.

The banks don't determine the interest rate alone. It's the market who determines it. So technically, you're asking the market to pay for the non-government of Italy.

Ohw and the power of credit rate agencies is way too big... Now France is the next victim, who follows....

Agree.