To be worried about all this Euro crisis stuff

[hiddenhome]

Seriously, what's the worst that might happen to the UK?

What if loaves of bread end up being £100 or the banks refuse to give us our money?

Are we safe in our beds?

MoreBeta, couldn't agree with you more. And the msm has hardly asked any hard questions, they bleat lamely about the 'markets' demanding this and that.

What happened to democratic processes...?

Do we retain any degree of safety because we still have the £ and not the Euro?

How come we have so much debt, but we're still considered low risk?

The collapse of the EU economy will affect the global economy which having the £ will not really shield us from.

hidenhome - the UK has a lot of debt but the markets consider the UK a lesser risk than say Greece or Italy.

As market opertors say, its mostly a question of choosing the least ugly sister at the ball. Investing in UK Govt debt is considered relatively safe - compared to most other countries.

hiddenhome, because we've promised to be prudent and the markets believe us.

Yes, we have safety in that we are closer to the democratic process (decision makers about our economy are the ones we actually vote for). Also, we don't - in theory - have to meet the Euro debts. We are also in a more flexible position as the masters of our own destiny.

But on the other hand, if Europe goes to bollox then our biggest customer has pretty much just gone bust. And all our other customers aren't in the best place for buying much stuff either. So we'll be affected.

In the UK we're relatively fortunate in that the markets are convinced by the Tory programme of spending reform and so - to those who blame 'the cuts' - we have managed to keep the interest on any borrowing right, right down, thus saving a lot of money. The Labour government left behind a big hole in the economy, made a heap of unkeepable promises, and we are now seeing the disaster that a more extreme version of this type of spending in what's going on in Southern Europe.

Good points LemonDifficult

There's a lovely clip on Youtube of Farage telling van Rompuy, Barroso and Rehn that this is their fault, that they are unelected, that what happened in Greece and Italy was undemocratic and disgraceful and why does van Rompuy think he has the right to tell the Italians that action not elections are needed.

He was applauded by other MEPs at the end.

That was the clip Amicassa - it's brilliant.

The Farage clip is brilliant. It has 50,000 hits.

The truth is that the EU crisis cannot be solved except by mass defaults on all/most of the Govt debt of the weaker economies and that means banks will fail as the own most of it.

Saw that clip shared on FB - its brilliant!

OP, if you can darn, knit, skin rabbits and turn acorns into coffee you'll be fine.

darn - tick
skin rabbits - have dh for that
acorns into coffee - tick

How come we have so much debt, but we're still considered low risk?

The key word there is "considered". In other words, the markets think we're safe. In current times, it's less about the actual details but what the markets THINK.

For example, Italy's debt is fairly high but unlike Greece and ourselves, they've actually been very prudent over the years. So why are they in trouble? It's because their economic growth has been crap for years and they've not made any attempts to sort this out. Therefore the market sentiment is that they won't be able to sustain their debts soon.

That's why it was absolutely imperative that the new government showed the markets that we are/were serious in sorting out our finances. Because our finances prior to the Tories coming in were as messy as Greece's. The key differences were that we have a much bigger economy which gives us more leeway and the flexibility to set our own interest rates and devalue if needed.

I would argue that the key difference is that we are not in the Euro and thus have a national bank that can and will act as lender of last resort, unlike the ECB.

There have been some very interesting comments made today, one of which was that once financial and political union have been driven through, the Euro 'crisis' will disappear.

I do hope that Cameron hasn't been signing us up to all sorts of things during his meeting with Merkel, and that further integration is a red line that he won't cross. We should be looking to either get out of the EU, or at the very least, have a massive renegotiation of the relationship. I do not like the increasingly federalist tone emanating from Brussels and can't see it leading anywhere benign. Replacing elected politicians with technocrats does not bode well, and neither does the new ESM treaty which ha been drawn up.

This has been a real eye opener for me. Can I ask where I should be reading to learn all this? What should I be reading? Who should I be reading?

I hate the helplessness that this situation makes me feel and it is made worse by my ignorance.

Amici, brilliant clip!

scaryteacher I agree. The prospect of further intergration is terrifying. The people of this country have no appetite for that at all. I hope Cameron has a backbone and shows some wisdom.

Alliwantisaroomsomewhere I listen to the Today programme each morning on Radio 4.

I guess you could start reading The Times or Financial Times, but I find a lot of what's going on too complicated and need a simpler explanation. The BBC television news doesn't give many explanations out, it just reports on what's going on, hence all my questions.

We deserve to be better informed I think.

Thanks, Hiddenhome. Yes I agree with what you say about the BBC news. They report what is happening but there are no explanations or basic "lessons" on what it all means.

I will have a listen to Today on Radio 4 when I can (work part time and study part time).

?Are the taxes raised inadequate for running the country??

Yes. In the UK almost every year the amount raised in taxes is less than the amount the government spends. The difference is called the deficit, and it has to be covered by borrowing.
This graph www.guardian.co.uk/news/datablog/2010/oct/18/deficit-debt-government-borrowing-data#zoomed-picture shows that the 2010 deficit was about £150,000 million. The problem with some countries is that their deficits got so big it stopped being credible that they'd be able to repay them. Of course if you don't think someone can repay you either you don't lend them the money or your charge a higher interest rate to cover the risk they won't pay. So the countries like Greece and Italy get to the point where either they can't borrow enough money to cover their spending or they get it at such a high rate that more and more of their money goes on paying interest. (It all gets more complicated, but too late at night to go into details...)

When you ask if the government guarentees investments it depends what you mean by investments. Savings in a bank account are guaranteed up to £85,000 per person (see here for details) www.moneysavingexpert.com/savings/safe-savings but there's no guarantee on things like shares.

And on what happens if everyone goes to take their money out of the bank, well for starters if they tried that there simply wouldn't be enough notes and coins to do it. Hard cash is only a small proportion of the money in the country.

Morebeta's dead right about the EU overthrowing democratically elected governments - and with barely a whimper of protest. In Greece, of all places, where they invented democracy FFS. The unelected people they have installed aren't just bureaucrats, they are all ex-financiers - all part of the group who caused the problem in the first place. Papademos, an unelected former banker, forced on the Greeks. Mario Monti, a former European commissioner, is heading a government of 'experts' - no elected politicians, just experts - in Italy.

I won't be crying over Berlusconi's body, but how come the West is so keen on democracy in places like Libya, and so quick to chuck it out in places like Italy and Greece?