PIGS and the election: who will be helped?

Well we've had four bailouts now for the PIGS in Europe. Total bailout has been in excess of 350 billion Euros, or has rivaled the bailout in the USA in 2008.

(1) One way this could effect the US election is that the US government may start printing even larger number of $100 banknotes to fill the need for hard currency in Europe. I am not saying that is either good or bad, but it may start an emotional reaction that Ron Paul might use.
(2) Another way is general fear and malaise in world trade which could surpress the slow comeback in America.
(3) A third way is that it may take some of the heat off Obama. Seen in light of a collapsing world financial system, it may make what is happening in America seem relatively calm by comparison.


PORTUGAL
Population: 10.8 million
Gross domestic product (2011): (EURO)171 billion
Debt as a percentage of GDP (2011): 108 percent
Bailout amount: (EURO)78 billion in May 2011
Bailout reason: Poor economic performance, even during boom times elsewhere in Europe, is at the heart of Portugal's problems; as with Greece, investors began demanding high interest rates to lend money to the country, which was seen as risky, as it became clear it had taken on too much debt.
———
IRELAND
Population: 4.7 million
Gross domestic product (2011): (EURO)156 billion
Debt as a percentage of GDP (2011): 108 percent
Bailout amount: (EURO)67.5 billion agreed to in November 2010.
Bailout reason: Ireland's rescue of its own banking sector proved too onerous to shoulder and pushed its deficit to a modern European record.
———
GREECE
Population: 10.8 million
Gross domestic product (2011): (EURO)215 billion
Debt as percentage of GDP (2011): 165 percent
Bailout amount: (EURO)110 billion in the first May 2010 rescue package. A February-March 2012 deal gave Athens another (EURO)130 billion in loans and shaved (EURO)105 billion off its national debt by asking private investors to accept losses on the Greek bonds they hold.
Bailout reason: Greece's astronomical debts threatened to bankrupt it when investors began demanding higher and higher interest rates to lend them money. The second bailout envisions Greece's debt dropping to 120.5 percent of GDP by 2020—but some think even that high figure is overly optimistic.
———
SPAIN
Population: 47 million
Gross domestic product (2011): (EURO)1.1 trillion
Debt as a percentage of GDP (2011): 68.5 percent
Bailout amount: Estimates range from (EURO)40 billion to (EURO)100 billion, but amount will not be set until Spain completes audits of its banking sector. Spain can tap as much as (EURO)100 billion, but de Guindos said that figure provides an ample safety margin. Importantly, Spain's bailout does not include public finances.
Bailout reason: Spain's smaller banks serving the domestic market are struggling under the weight of (EURO)185 billion of troubled property assets after a real estate boom went bust. Its largest international banks are not expected to need support. The government is also being forced to pay prohibitively high interest rates to issue debt and refinance existing debt, the country is in its second recession in three years and unemployment is nearly 25 percent, the highest in the eurozone.

Supposedly if Italy gets on the list [PIIGS?] that'll sure be uncharted waters.

The Stock Market should react well to the latest news?

Quote: odiousgambit

Supposedly if Italy gets on the list [PIIGS?] that'll sure be uncharted waters.

The Stock Market should react well to the latest news?

Italy was a G-7 nation and to have it fail would be beyond major. IMHO we are going to see a domino effect, hopefully France is the firewall. Too many years of too many governmnet handouts. Check out Dick Morris on Europe. He stated that Europe still had a working-spirit in the 20s and 30s. In the 50s they just rebuilt what was there before under the Marshall Plan and its followups. But now they just don't want to work, they want to take time off since their taxes are so high.

If it happens, look for it to help Romney. Obama will be preceived to both have "let it happen" and will just call for more lending and spending, austerity is a dirty word to him. With so many Americans having to cut back personally they don't want to hear that governments cannot.

Yes, but the game's afoot. Italy is not the bag-holder. The EU Financial System is... same with Greece and Spain. The EUFS *will* collapse, its just a question of how much money gets handed over to the PIIGS.

If you stop feeding them, then what???? The PIIGS take their ball and go home?, war? guerilla tactics?. Some soveign Nations go insolvent, with mass population exit?
No-one's going anywhere, and thats the plan... kick the can down the road until judgement day. For Greece, thats gonna be a bloody, violent, revolution, with a new framework of government. THe Grecian corruption is total, and insidious. Spain already has an estimated 20% unemployment, and Portugal roughly the same. Looks like an underground economy in these five nations, no matter how one slices it.

my 2 pfennings

Be careful Suspension fever reigns now in the forum.

That should be " my 2 Pfenninge "

Assuming the bailouts continue:

I completely understand people who say it will have no effect on the election, but I don't understand any of you thinking it will help Romney. These bailouts stabilize the region (albeit for a short time). The average American will only see the stock markets rise, exports to Europe continue, and an overall better economy (as compared to a default or Eurozone implosion). As usual, this would help the incumbent Obama.

Although it's a house of cards, history has shown it doesn't matter until the big bad wolf comes and blows the house down.

Quote: ahiromu

Assuming the bailouts continue:

I completely understand people who say it will have no effect on the election, but I don't understand any of you thinking it will help Romney. These bailouts stabilize the region (albeit for a short time). The average American will only see the stock markets rise, exports to Europe continue, and an overall better economy (as compared to a default or Eurozone implosion). As usual, this would help the incumbent Obama.

Although it's a house of cards, history has shown it doesn't matter until the big bad wolf comes and blows the house down.

+1. Glad i looked before writing.

Quote: AZDuffman

Italy was a G-7 nation and to have it fail would be beyond major. IMHO we are going to see a domino effect, hopefully France is the firewall. Too many years of too many governmnet handouts.

I wonder if there is a comeback position at all. Sometimes I think of nations like Ukraine, Belarus, Moldavia, as simply doomed. They have no representation anywhere in the modern economy, and there is no way to catch the G-20 nations.

But if Greece has been part of the EMU, then it votes to leave the zone, when and how does it ever come back in?

If you are not one of the four Great Powers of Europe, then your representation on the G-20 consists of the lone EU representative. The EU representative must be primarily concerned about the members of the EMU.

EU Nation not in Euro	Currency	Population millions
United Kingdom	pound	62 (Individual G-20 representation)
Sweden	krona	9
Denmark	krone	6
Czech Republic	koruna	11
Poland	złoty	39
Hungary	forint	10
Latvia	lats	2
Lithuania	litas	3
Romania	leu	19
Bulgaria	lev	7