# Future of the Eurozone?



## BrianP (Sep 6, 2011)

My wife and I are considering moving from South Africa to Cyprus next year with a view to semi-retirement. This would mean converting most of our retirement savings into Euros. We would like to continue working but it would not be critical if we didn't get work. Given the present situation in Europe does anyone have a view on what is likely to happen if :-

Greece defaults in a major way?
The Eurozone disintegrates?
How is it going to affect Cyprus?

I have heard rumours that Germany has already started printing Deutchmarks - is this the way it will go and if so what will happen to the Euro as a currency?

I know that no-one can predict with absolute certainty, but you guys are closer to the action than we are and I would appreciate some alternative views on the situation.

I look forward to any comments.


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## Veronica (Apr 5, 2008)

BrianP said:


> My wife and I are considering moving from South Africa to Cyprus next year with a view to semi-retirement. This would mean converting most of our retirement savings into Euros. We would like to continue working but it would not be critical if we didn't get work. Given the present situation in Europe does anyone have a view on what is likely to happen if :-
> 
> Greece defaults in a major way?
> The Eurozone disintegrates?
> ...


Hi Brian, welcome to the forum.
As you say it is impossible to predict with any certainty what will happen, but we are toldby people we know in the financial sector that Cyprus is secure no matter what happens. The banks will suffer if Greece defaults but they will not go under as they have ample assets. 
The big thing which should work in Cyprus favour is the oil and gas which has been found offshore. The revenue from this once it starts coming will ensure that Cyprus has good future.

Regards
Veronica


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## BrianP (Sep 6, 2011)

Thanks Veronica for the input. I've been following the forum for a couple of months now and so I'm not surprised that you would be the first with a helpful response!! I don't know where you find the time!

Much appreciated.

Regards

Brian


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## Veronica (Apr 5, 2008)

When I am working on my computer updating my website etc it only takes a few minutes to check the forum occassionally and answering queries. 
I am glad that you find the forum helpful. Thats what the forum is all about, trying to help people and hopefully form some good friendships as well

Veronica


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## Guest (Nov 28, 2011)

From my point of view, Germany I think 2 different scenarios are possible. Either the politicians succeed in saving all euro zone or they will create a smaller euro zone without Greece, Italy and Spain. The rumour about Germany printing new currency is ofc just that, a rumour

No now living politician want to take the consequences of going back to own currency. The result would throw europe in to a financial crisis that would make the ongoing one look like a storm in a waterjug.

Cyprus is a very tiny economy in the EU and can be quite calm I think. And as Veronica say, the new found energy will for sure help, even if I think that this is in future because it will take many years to develop and cost a lot of money only to build the infrastructure


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## finikaria (Nov 26, 2011)

I am inclined to agree with the above. I am one of the few that think the creation of the Euro was a good thing. Some fiscal tightening up needs to be done fairly quickly and in fact has already started.


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## steveg63 (Sep 5, 2010)

Dont think the powers to be will allow the Euro zone to disappear, would cost to much, I believe we will see a smaller Euro zone 'club'. The oil/gas find that Cyprus have uncapped, estimated at 3.6billion barrels, will help the economy, however this wont be at least for 2 yrs, it does give the government the chance of borrowing against a sizable asset! Your average person on the Cyprus streets wont see any change, apart from the value of the house/s rising, more building and cost of living rising.


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## parkey (Oct 26, 2011)

Hello anyone been watching the news today, Mr Cameron seems to have alienated Britain still further from most of the Euro countries. If Britain was to leave the euro zone do you think it will effect the movement of British people within europe.


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## Guest (Dec 9, 2011)

As I know UK is not in the euro zone 

But if UK would leave EU it would ofc have consequenses. UK would be treated as the other countries outside EU, with need for Visa and such. But I dont think it will happen, UK can onlz loose on such a move


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## parkey (Oct 26, 2011)

I hope you are correct vegaanders I would hate to be isolated from Europe. Strange attitude being Cornish, we are a wierd people in Cornwall UK. I just like the idea of euro freedom of movement. I have over the years jelled more with europeans than with my own people. I have a business at a local indoor market and at the run up to a very english xmas the stall that took the most money was a Cypriot couple selling stuffed olives, delicious. 
Thank you for your input.


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## rifleman (Jun 24, 2011)

parkey said:


> Hello anyone been watching the news today, Mr Cameron seems to have alienated Britain still further from most of the Euro countries. If Britain was to leave the euro zone do you think it will effect the movement of British people within europe.


Britain isn't in the "eurozone", that is the term used to mean all the nations who have the euro as their currency. So Britain can't leave it.

Britain is a member of the EU and thier is no prospect of us leaving at all. None of our major political parties want us to leave, no significant European politicians want us to leave.


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## johnsymonds (Sep 3, 2008)

finikaria said:


> I am inclined to agree with the above. I am one of the few that think the creation of the Euro was a good thing. Some fiscal tightening up needs to be done fairly quickly and in fact has already started.


I agree with you that you are one of the few.

The euro was the product of a German/French set of wishes, plus Belgium and Austria and for them, it was probably OK but as soon as it expanded to include less stable economies such as Italy, Spain, Portugal, Ireland and Greece, it became fundamentally flawed. Several of those countries probably fudged the figures to make the entrance requirements and it is now coming home to roost in a big way.

The simple fact is that a one size fits all scenario is not suitable for disparate economies. The situation was exacerbated by the inclusion of yet more countries as Cyprus, Estonia etc joined. 17 countries are simply too many for a one size fits all system to work.

The tight fiscal parameters of the eurozone do not permit weak or weakening economies to react to poor market performance by altering their own financial factors. That means that they become trapped in a spiral of depression from which it is impossible to escape. Severe austerity measure simply depress growth even further and so the spiral will continue. The only way out would be to introduce the necessary flexibility to allow the poorer economies to grow under their own steam rather than benefit in a spurious fashion from bail outs. That would mean the creation of a two speed euro (Euro Premium and Euro 2) or allow weaker countries to go back to their original currencies.

Unfortunately, the political leaders in the Eurozone have too much political capital invested in the flawed system and I cannot see anything changing soon. Therefore, it is highly likely that within the next 5-10 years, the eurozone will collapse because the leaders are too pigheaded to see the light. The best thing would be if the German people were to get fed up with bailing out every other eurozone member and force their own Government to make fundamental changes.

Thank God that UK did not join the euro as otherwise we would be in the same mess and well done to David Cameron for trying to get the other leaders to see sense and when that didnt work he opted out.


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## Guest (Jan 3, 2012)

Funny to read this. And the conclusion in the end that UK has gone well thanks to that they are not in the Eurozone. 
Someone must have been sleeping. Most experts agree that UK in the long rung is in the deppest ****. I am sure it can be fixed, but it will cost the people hell a lot more then it already has


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