Bailouts could bankrupt Germany itself

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www.telegraph.co.uk/finance/financetopics/financialcrisis/8160999/EU-rescue-costs-start-to-threaten-Germany-itself.html

Time to stop handing out money to governments and banks which have screwed up.

The euro isn't worth the suffering of millions. Let currencies leave; legislate to allow them to convert their debt to the new (old) currencies. Let the banks who made bad bets take haircuts on the devaluation.

Countries with otherwise sensible fiscal policies like Germany and Britain (now that we have a government committed to cutting excessive public spending) are putting themselves at risk.

hudd, that would be difficult, what connection at a fiscal level is there between Greece and Germany. At the time of the formation of the Euro Greece was in some aspects almost a third world country compared to Germany.

The first thing that needs to happen is the stability and growth pact needs to be adhered to no ifs no buts. The Commission needs to keep a far closer eye on each members sovereign debt far more closely than they have done.

If it suits the French to break the rules they will and they will cock a snoot (good eh :o ) at the commission. Only the small countries will "get a slap".

I agree the larger countries have been very bad for doing this and the complacency of politicians across Europe has been a very large contributing factor to the problem.

I would add that I don't think its fair to blame the euro for the crisis only for the threat of contagion. Many countries outside of the eurozone most notably this one have terrible problems with sovereign debt and structural deficits due to fiscal irresponsibility

hudd, our debt has a 14 year maturity we are nowhere near as bad off as the Tories and Fib Dems say we are.

We were on the credit rating agencies watchlist, have a structural deficit that is 12% of GDP and have annual debt interest payments of £40 billion rising to £60 billion in the next few years and that is with the austerity measures. The fiscal situation is dire and needs urgent action.

Dont agree our debt is like a broken finger and the government is removing the arm at the elbow to cure it.

BTW the credit ratings agencies have a piss poor record of accuracy, Lehman Brothers comes to mind

There is a very broad consensus that our structural deficit needs to be reduced, the EU,IMF,OECD have all said so. Add to that the BoE Governor/major business leaders as well as the tories,lib dems,ukip and some Labour figures as well.

It does need to be reduced but nowhere near as fast and deep as we are doing the social damage and misery caused will be immense.

Those who caused the problems have got away scot free.

We need to eliminate the deficit to restore business and investor confidence in our economy, the international capital markets are not very forgiving once confidence is lost. Also the longer we have the deficit the more we will have to pay servicing the interest on it.

So the international capital markets are more important than our own fellow citizens as far as I am concerned the international capital markets can get in the queue.

The international capital markets have the power at the moment because we owe so much money on them and they have the potential to push the interest rates on our Government bonds up and leave us needing the IMF.

But, if we don't reduce the deficit (not the national debt - different issue) then we will need to borrow a lot of money next year to balance the books. We need to borrow that from the international capital markets, unless you can think of someone else with 50 billion plus kicking around?

So, telling the international capital markets to get in the queue while we keep spending is going to stop them from lending us any more money, or only doing it at a highly increased rate of interest.

We spend more money than we make every year. We're in no position to be snotty with the money lenders. When we're not running a deficit any more THEN we can look at the national debt and think about reducing that and the speed at which we should do that but we're not even in a position to think about that yet.

The markets can't/won't get in the queue as we owe a fortune on them and we need to borrow off them to finance this years government spending which they won't or will put the interest rates up if they have no confidence that we have any intention/plan to pay the deficit back.