# A very good read on the European economic crisis



## cds usa (Jan 4, 2011)

European Sovereign Debt Crisis: Overview, Analysis, and Timeline of Major Events | Enterprising Investor

I thought I needed to share, it puts things in perspective.


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## PeteandSylv (Sep 24, 2008)

A very interesting read, thank you.

It underlines the absurdity of the financial structure that the EU was set up with with no testing or policing of compliance. It also outlines the impossible debt situation that the EU now exists with as a whole.

Unfortunately it doesn't contain the magic answer of how to solve this mess.

Pete


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## cds usa (Jan 4, 2011)

Each country having its own currency would help a lot!


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## PeteandSylv (Sep 24, 2008)

cds usa said:


> Each country having its own currency would help a lot!


That's an interesting point of debate.

Given that all payments into the EU and all subsidies from the EU would then go through an exchange rate for the relevant countries, the net payments would vary as according to the strength of the countries currency. But which currency would the EU bank account operate in? Would this result in weaker currencies paying more and/or receiving less as a result of their exchange rate?

Pete


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## cds usa (Jan 4, 2011)

Yes but for many countries it was a good option given the varied economic strength of each. Greece for example traditionally got out of these bad times by printing more dragma, thus devaluing its currency, raising inflation but its people didn't feel as poor. Not an ideal solution but for some countries a possibility. 
Cyprus protected its currency by controlling imports and having an almost closed economy now they have to follow EU rules with uncertain benefits
I hope they don't really think that raising the vat to 18% is the answer!


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## PeteandSylv (Sep 24, 2008)

cds usa said:


> Yes but for many countries it was a good option given the varied economic strength of each. Greece for example traditionally got out of these bad times by printing more dragma, thus devaluing its currency, raising inflation but its people didn't feel as poor. Not an ideal solution but for some countries a possibility.
> Cyprus protected its currency by controlling imports and having an almost closed economy now they have to follow EU rules with uncertain benefits
> I hope they don't really think that raising the vat to 18% is the answer!


I didn't think of Cyprus as a closed economy. The island has to import large amounts of goods and materials including coal for power that cannot be produced here. The country appeared rich because British money was pouring in to buy properties which the British allowed/encouraged to become overpriced. The banks do not deal with debt realistically here and treat it as an asset even when it is unrecoverable. This together with the loans to Greek banks has been the downfall of the economy. The Government carried out no regulation of the banks and is still in denial of their responsibility. Now that money is short the bloated, overpaid and generally idle public sector is a significant drain on cash which is why the Troika particularly focussed on it.

Pete


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## cds usa (Jan 4, 2011)

Yes I agree that the banks were largely unregulated but that was also a good thing, they attracted lots of offshore capital. The government is definitely clueless and in denial. Between the loans to Greece and the blown up power plant there is no money left. Bring on the natural gas, unless of course they give it away!


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## jshshr (Nov 2, 2012)

I dont think the problem has to do with regulation. Overregulation only creates a bigger monopoly, as in uSA now, where a few large banks control 6-70% of banking business and the regulatory barriers to
new competitors is too costly.
I dont think government is clueless either. I think they do whatever is convenient for them and short term that means getting reelected. No other short term priority.
One of the big problems in europe is that there is little real integration . Coomunications, labor mobility, tax systems are still representative of the pre EU times with very little integration. making a phone call or mailing a letter form italy ot spain is INTERNATIONAL cost, for example.
moving form one EU country to another to work can be a cumberosme regulatroy experiecne.


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## PeteandSylv (Sep 24, 2008)

jshshr said:


> moving form one EU country to another to work can be a cumberosme regulatroy experiecne.


I don't think so from the numbers that have flooded into the UK. Freedom of movement and employment for EU citizens is so easy now and allows poorer countries' workers to move, earn and send money "home". I wonder what the cost of this invisible export is.

Pete


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## jshshr (Nov 2, 2012)

I was looking more at the barriers to moving in countries like Spain, Italy, France. Not sure about UK.
Also you are right that these are genrally citizens from poorer countries with low level skills.
If EU wants to compete with USA, where there is total labor mobility between states, then they need to revamp the whole system. Should not be any barriers at all


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## PeteandSylv (Sep 24, 2008)

jshshr said:


> I was looking more at the barriers to moving in countries like Spain, Italy, France. Not sure about UK.
> Also you are right that these are genrally citizens from poorer countries with low level skills.
> If EU wants to compete with USA, where there is total labor mobility between states, then they need to revamp the whole system. Should not be any barriers at all


Could you explain what barriers you are referring to? There is free movement for EU citizens throughout the EU.

Pete


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## jshshr (Nov 2, 2012)

Sure.

When I lived in USA i could take a job in any of the 50 states freely. one country.
Moving from Germany to Spain and wanting to set up a company , invest and hire a few people
i run into a bearocracy.
1. First I need to get a local residence certificate from the local comunity.
2. I need to get a EU certificate because a EU citizen cannot stay in Spain more than 3 months without it,
cannot set up a company nor register wiht local tax authorities (not considered a RESIDENT).
3. To get that certificate need to make an appointment online but they give you a choice of 3 dates , often 2 month out. so if you travel for business you have a problem.

So my new business is delayed for months.
many other issues laso but that is just an example.
so there is freedom of movement but anyone with a usa or canadian passport has almost exactly the same freedom. what has the u accomplished? nothing


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## Guest (Nov 2, 2012)

cds usa said:


> Each country having its own currency would help a lot!


It has not helped US much or...

Anders


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## Guest (Nov 2, 2012)

jshshr said:


> Sure.
> 
> When I lived in USA i could take a job in any of the 50 states freely. one country.
> Moving from Germany to Spain and wanting to set up a company , invest and hire a few people
> ...


There is one BIG difference. US is still ONE country, EU is 27 independent countries, not a federation like US


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## cds usa (Jan 4, 2011)

Actually it has, also being able to regulate currency and bank rates helped. The us fed does a very good job of it. I'm not saying it's going to make everyone rich. But it may help avoid measures that hurt the population more.
Unfortunately all the austerity measures hurt the lowest earners the most and that applies to Europe and the US equally. The rich are still rich and the poorer not only get poorer but there is less help from both state and private money. The only positive that comes out of it is the illegal immigrants end up moving to greener pastures.


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## cds usa (Jan 4, 2011)

Vegaanders said:


> There is one BIG difference. US is still ONE country, EU is 27 independent countries, not a federation like US


I totally agree, we cannot, nor should we want to make Europe into one. And the EU was never designed to do that.


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## jshshr (Nov 2, 2012)

CDS USA
I agree with you 100% about the lowest earners getting hurt the most . I believe that specific issue is worse in USA as many have no decent access to healthcare like everyone in EU does. Big problem in USA.
The advantage of the USA for lower earners is the upward mobility potential. 

With respect to making europe into one, I thoguht that was the general idea of the EU. Having just a common currency accomplishes little with respect to making the EU a competitor of USA or, in the future, China.


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## David_&_Letitia (Jul 8, 2012)

jshshr said:


> CDS USA
> With respect to making europe into one, I thoguht that was the general idea of the EU. Having just a common currency accomplishes little with respect to making the EU a competitor of USA or, in the future, China.


Making Europe into one seems to be the general idea as far as the Brussels Eurocrats are concerned, along with Germany and France who believe that they will be in control. We in the UK joined the EEC (European Economic Community) after a referendum in 1973. However, after Maastricht, we had no internal discussion or choice in the formation of the European Union (EU) which resulted it the loss of sovereignty. The EU is a pipe-dream. Twenty seven disparate nations with differrent languages, history, culture and political systems - each with it's own unique problems all forming a Union? As Robert Cooper put it, the EU has "become a highly developed system for mutual interference in each other's domestic affairs"


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## cds usa (Jan 4, 2011)

David_&_Letitia said:


> Making Europe into one seems to be the general idea as far as the Brussels Eurocrats are concerned, along with Germany and France who believe that they will be in control. We in the UK joined the EEC (European Economic Community) after a referendum in 1973. However, after Maastricht, we had no internal discussion or choice in the formation of the European Union (EU) which resulted it the loss of sovereignty. The EU is a pipe-dream. Twenty seven disparate nations with differrent languages, history, culture and political systems - each with it's own unique problems all forming a Union? As Robert Cooper put it, the EU has "become a highly developed system for mutual interference in each other's domestic affairs"


Since this is the first true crisis the EU faces it will be interesting to see if it weathers the storm. The most disturbing aspect to me is that they can't react fast enough as a group so it's harder to stop losses.
China will own us all at the end


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## jshshr (Nov 2, 2012)

Well, i guess in hindsight for the UK it was very beneficial that they didnt join the EU. 
you are probably right about a pipe dream. it all sounds very good but
with 27 different countries and each with its own political parties probably
impossible to make it work.
I guess Germany is the big beneficiary of the EU for their export growth.
What I see as a small businessman is that Europe cost stucture, labor laws , etc make it uncompetitive.


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## Guest (Nov 3, 2012)

I think you meant UK did not join Euro, because as I know they are still very much a EU member

And yes, Germany are a benificiary from EU but also the country that pay most money to all other members.

And never forget what EU was all about from the beginning, a way to avoid that Germany and France should be involved in a war again. And even if that would be the only benefit, I would support it. Europe have had enough of wars

Anders


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## PeteandSylv (Sep 24, 2008)

jshshr said:


> Sure.
> 
> When I lived in USA i could take a job in any of the 50 states freely. one country.
> Moving from Germany to Spain and wanting to set up a company , invest and hire a few people
> ...


Your example is slightly different. There is freedom of movement that allows EU workers to move to a different EU country and be employed there. What you have described is the setting up of a legal entity, a company, and becoming an employer. As an alien you had to comply with the legal requirements for this. I am sure a similar thing would apply to an EU citizen wanting to set up a company in the US.

Pete


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## jshshr (Nov 2, 2012)

Hi
Actually , even as non resident, anyone can set up a company (it is called LLC, limited liability company)in USAin 24-48 hours online and get a tax id number, open bank account, etc.

This does not give you resident permission but can certainly start operating.

very simple process . I heard some nordic countries were also like that but i am not sure.
that is probably why htere is 40% unemplyment in Spain and 8% in USA


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## PeteandSylv (Sep 24, 2008)

jshshr said:


> Hi
> Actually , even as non resident, anyone can set up a company (it is called LLC, limited liability company)in USAin 24-48 hours online and get a tax id number, open bank account, etc.
> 
> This does not give you resident permission but can certainly start operating.
> ...


Actually Spain's unemployment rate is 25% but I take your point although the cause in Spain is a little more complicated than you suggest.

I am surprised that an alien can set up a company so easily in the US having known of and read about the issues with getting work permits.

Pete


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## Guest (Nov 4, 2012)

PeteandSylv said:


> Actually Spain's unemployment rate is 25% but I take your point although the cause in Spain is a little more complicated than you suggest.
> 
> I am surprised that an alien can set up a company so easily in the US having known of and read about the issues with getting work permits.
> 
> Pete


Its not more complicated in Cyprus either. You can set up a Ltd (same as LLC ) online if you want, with bank account, address etc. If you buy a shelf-company it takes 24 hours. Can be bought and operated by anyone from day one. Also possible in UK i think.

Anders


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## PeteandSylv (Sep 24, 2008)

Vegaanders said:


> Its not more complicated in Cyprus either. You can set up a Ltd (same as LLC ) online if you want, with bank account, address etc. If you buy a shelf-company it takes 24 hours. Can be bought and operated by anyone from day one. Also possible in UK i think.
> 
> Anders


OK. So it seems that setting up a company is not difficult anywhere and as such is a completely separate issue to worker mobility.

As I understand it there is complete freedom of movement for EU citizens within the EU and the right to work in any EU country goes with this. Which is what I said originally in response to jshshr.

Pete


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## Guest (Nov 4, 2012)

PeteandSylv said:


> OK. So it seems that setting up a company is not difficult anywhere and as such is a completely separate issue to worker mobility.
> 
> As I understand it there is complete freedom of movement for EU citizens within the EU and the right to work in any EU country goes with this. Which is what I said originally in response to jshshr.
> 
> Pete


I fully agree, that is one of the good parts with EU.

Anders


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## jshshr (Nov 2, 2012)

I beg to disagree
Again the freedom of right to work exists but there is a bureacucracy , at least in countries like Spain and Italy, which requires a person to go through a process of acquiring documentation ALLOWING them to work . Not automatic like WITHIN USA, for example btween states.
This process can take months to accomplish.
As I said before getitng an appointment n Spain to get the UE Residence (required to work, open bank account, etc ) takes 6-8 weeks.


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## Veronica (Apr 5, 2008)

jshshr said:


> I beg to disagree
> Again the freedom of right to work exists but there is a bureacucracy , at least in countries like Spain and Italy, which requires a person to go through a process of acquiring documentation ALLOWING them to work . Not automatic like WITHIN USA, for example btween states.
> This process can take months to accomplish.
> As I said before getitng an appointment n Spain to get the UE Residence (required to work, open bank account, etc ) takes 6-8 weeks.


What I want to know is what on earth employment in Spain has to do with Cyprus?
This is the Cyprus forum so what happens in other countries is totally irrelevant.


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## Guest (Nov 4, 2012)

jshshr said:


> I beg to disagree
> Again the freedom of right to work exists but there is a bureacucracy , at least in countries like Spain and Italy, which requires a person to go through a process of acquiring documentation ALLOWING them to work . Not automatic like WITHIN USA, for example btween states.
> This process can take months to accomplish.
> As I said before getitng an appointment n Spain to get the UE Residence (required to work, open bank account, etc ) takes 6-8 weeks.[/Q
> ...


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## jshshr (Nov 2, 2012)

Sorry.
Maybe i am on the wrong forum if this is Cyprus. I thought it was about EU

Vegaanders: Sorry i wasnt clear.
I wasnt comparing the issue of European citizens wanting to live and work in USA.
I was comparing USA citizens moving within USA to European citizens moving withing European countries. 
Much simpler for USA citizens to move and work within USA than for Europeans within Europe.


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## Guest (Nov 4, 2012)

jshshr said:


> Sorry.
> Maybe i am on the wrong forum if this is Cyprus. I thought it was about EU
> 
> Vegaanders: Sorry i wasnt clear.
> ...


But you are wrong. Its no problem for EU citizens to move inside EU. buy a ticket, land and start working. Necessary registrations can be made later

Anders


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## jshshr (Nov 2, 2012)

Well. that might be the case if you are an employee with a work contract.
But if you are a small businessman wanting to set up a new company you need to get the
UE permission from Spain and the accompanying tax ID number, which can take a few months. 
You cannot do it without that process.


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## Veronica (Apr 5, 2008)

jshshr said:


> Well. that might be the case if you are an employee with a work contract.
> But if you are a small businessman wanting to set up a new company you need to get the
> UE permission from Spain and the accompanying tax ID number, which can take a few months.
> You cannot do it without that process.


As I said earlier, what happens in Spain is not relevant on the Cyprus forum. You do not need permission to start a business in Cyprus if you are an EU citizen unless it is the sort of business that even a Cypriot needs a licence for. You just need to register for tax, social insurance, vat etc and everything is fine.
If you wish to compare what happens in Spain with the USA please do so on the Spain forum and not on the Cyprus forum. 
Thank you


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## Guest (Nov 4, 2012)

jshshr said:


> Well. that might be the case if you are an employee with a work contract.
> But if you are a small businessman wanting to set up a new company you need to get the
> UE permission from Spain and the accompanying tax ID number, which can take a few months.
> You cannot do it without that process.


I opened a company on Tenerife year 2000. I came directly from Sweden and it all took about 1 month. For me normal, I am sure it would take longer time in my homecountry Sweden. But as said before, on Cyprus it take only 24 hours if you want, and everyone can do it, eu citizen or not.

Anders


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## PeteandSylv (Sep 24, 2008)

jshshr said:


> Well. that might be the case if you are an employee with a work contract.
> But if you are a small businessman wanting to set up a new company you need to get the
> UE permission from Spain and the accompanying tax ID number, which can take a few months.
> You cannot do it without that process.


You need to stop confusing these 2 cases.

Being an employee seeking a job is entirely different to setting up your own company.

I actually thought this had been made clear in previous replies.

Pete


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## jshshr (Nov 2, 2012)

PeteandSylv said:


> You need to stop confusing these 2 cases.
> 
> Being an employee seeking a job is entirely different to setting up your own company.
> 
> ...




Yes. You are right about that. AGREE.
My point is complicating the setting up of new companies creates HIGH unemployment as samll businesses are what create jobs.


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## Veronica (Apr 5, 2008)

jshshr said:


> Yes. You are right about that. AGREE.
> My point is complicating the setting up of new companies creates HIGH unemployment as samll businesses are what create jobs.


You still seem to be confusing Cyprus with Spain
It is NOT complicated to set up a small business in Cyprus.
It took us a matter of days to set up a Ltd company with absolutely no problems at all.

Please stop talking nonsense as you patently DO NOT know how things work in Cyprus.

Thank you


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## PeteandSylv (Sep 24, 2008)

jshshr said:


> Yes. You are right about that. AGREE.
> My point is complicating the setting up of new companies creates HIGH unemployment as samll businesses are what create jobs.


I wonder if that assertion can be backed up with facts.

In all the years I was self-employed or was a director of my own companies, the majority of my customers were small businesses both established and start-ups. I never once heard of anyone not setting themselves up in business due to the bureaucracy of doing so.

Pete


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## Guest (Nov 6, 2012)

PeteandSylv said:


> I wonder if that assertion can be backed up with facts.
> 
> In all the years I was self-employed or was a director of my own companies, the majority of my customers were small businesses both established and start-ups. I never once heard of anyone not setting themselves up in business due to the bureaucracy of doing so.
> 
> Pete


And for me it should be SOME bureaucracy so not all start without any idea of running a business. Can cost much money for state and partners

Anders


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## Da Funk (Jun 5, 2010)

Veronica said:


> What I want to know is what on earth employment in Spain has to do with Cyprus?
> This is the Cyprus forum so what happens in other countries is totally irrelevant.


If that is the case why do I consistently see the same names continually comparing Cyprus to the U.K.? In my opinion there is a very biased group on here particularly between Cyprus and the U.K. and even so with the East and West of the island. With Paphos always being the best in comparisons and Cyprus being the best when the same names continually compare it to the U.K.


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