UK slides back into recession in first double dip since 1970s

[lem34]

Am quite happy. hopefully more quantitative easing and low interest rate lead to lower sterling against euro and we will export more to Europe. This Tory dominated regime was never gonna get it right. Look at that idiot chancellor what experience did he have other than patronage

 

[Hello_10]

Am quite happy. hopefully more quantitative easing and low interest rate lead to lower sterling against euro and we will export more to Europe. This Tory dominated regime was never gonna get it right. Look at that idiot chancellor what experience did he have other than patronage

sir, there are two type of economies, one is called 'doing good' and other 'not doing good'. and again we may categorize them by emerging/ developing economies or emerged/ developed economies. but here you are discussing about 'dirty' economies, the pigs/ PIIGGS economies, who earn less and spend more. and one day, a country like Germany will finally kick these all the pigs from EU...........

 

[Hello_10]

sir, there are two type of economies, one is called 'doing good' and other 'not doing good'. and again we may categorize them by emerging/ developing economies or emerged/ developed economies. but here you are discussing about 'dirty' economies, the pigs/ PIIGGS economies, who earn less and spend more. and one day, a country like Germany will finally kick these all the pigs from EU......

when UK fallen into double dip recession for last two quarters and it is now clear that they won't be able to take their economic size of mid 2008, ever, I had predicted in my one post of this thread that Great Britain is the 'Pig Ranked 2' after Greece among the PIIGGS economies. have a look on the current status of ranked 1 pig, Greece, and we know UK would be just next to Greece, by this year or within next 2-3 years, but Greece is just a start and one by one all these pigs will come on the path of Greece, its written in the destiny of these pigs like Britain, its their fate, as below:

19 May, 2012, Reuters

ATHENS/LONDON: In Athens, the homeless are on the streets in growing numbers, soup kitchens feed twice as many people as a year ago, and the poor are diving into garbage bins in search of scrap they can sell.

Greece is close to breaking point as it struggles with austerity targets set by creditors, but this is just a foretaste of the nightmare of unrest, hunger and even anarchy that could engulf the debt-crippled nation if it is forced out of the euro.

If the exact economic impact of such a move is hard to nail down - newly issued drachmas devalued by up to 70 percent, runaway inflation, a banking meltdown, a collapse in trade - the implications for ordinary Greeks crushed by the debt crisis are even harder to predict.

Without international bailout cash, salaries and pensions would go unpaid and violence, political extremism and uncontrolled emigration could quickly follow.

After voting inconclusively for parties that opposed foreign-imposed austerity, including the neo-Nazi Golden Dawn, Greeks head to the polls again in a month's time. This election is being portrayed internationally as a referendum on the single currency, even if Greeks do not yet see it that way.

A Greek exit from the 17-nation euro zone, or "Grexit" as some economists have called the once unthinkable eventuality, risks turning the nation into what would be close to a failed state on the edge of the European Union, one of the most prosperous societies the world has ever known.

Greece imports 40 percent of the food it consumes, nearly all of its oil and natural gas and much of its medicine. It has long been clear to some commentators that there could be trouble ahead.

Confronted with post-exit turmoil, foreign suppliers would simply put up the shutters until the situation becomes calmer, leading to acute shortages of basic commodities, which could fuel serious civil unrest, according to Bank of Greece Governor George Provopoulos.

Even if Greece did manage to import limited amounts of food and other basics, they would be cripplingly expensive.

Provopoulos warned as long ago as December that a return to the drachma would be "real hell", with Greeks forced to resort to barter during the transition period between the two currencies, "trading a kilo of olive oil for three kilos of flour".


"NIGHTMARE SCENARIO"

"There will be shortages in basic staples. Without fuel, the army and the police would not be able to move their vehicles. After a long period, things will return to a better balance. But during the first transitional phase we would be experiencing a nightmare scenario," Provopoulos said.

A former finance minister, Yiannos Papantoniou, saw trouble ahead nearly a year ago: "Greece would not be able to support 11 million people so there will be huge emigration flows," he told Reuters Insider television last July. "Disruptions, social disruptions will come. I would say a regime of total anarchy."

Last year 23,800 Greeks emigrated to Germany alone, 90 percent more than the previous year , German data show and Greeks are queuing up to learn German.

Most economists agree the austerity measures Greece is labouring under offer it little hope of recovery near term, and some argue that if it leaves the euro, it could export its way back to health on the back of a vastly devalued currency.

Nightmare foretold if Greece heads for euro exit - The Economic Times

 

[lem34]

I do hope you are right. I would stand to gain from it lol

 

[Hello_10]

sir, there are two type of economies, one is called 'doing good' and other 'not doing good'. and again we may categorize them by emerging/ developing economies or emerged/ developed economies. but here you are discussing about 'dirty' economies, the pigs/ PIIGGS economies, who earn less and spend more. and one day, a country like Germany will finally kick these all the pigs from EU...........

World Bank data suggest that the UK is a net remittance-receiver

The UK is a receiver as well as a sender of remittances. As shown in Figure 1, the World Bank estimates suggest that since the mid-1990s the UK has been a net-remittance receiver. The main countries from which remittances are sent to the UK include Australia, the United States and Canada (World Bank 2010). Real remittance inflows (inflation adjusted) for the UK have increased by an annual average of 6% since 1989, reaching close to GBP 4,647 million in 2009. However, these inflows represent a small share of the UK GDP (about 0.3% in 2009). The UK occupies the fourteenth place in the world in value of remittances received and the sixth place in Europe.

From 1989 to 2009, remittance outflows from the UK increased by an annual average of about 4% in real terms, reaching close to GBP 2,352 million in 2009.

The UK accounted for around 7% of annual remittances to Bangladesh in 2010 (about GBP 533 million) and about 10% of annual remittances to Pakistan during that year (about GBP 627 million)

Bangladesh and Pakistan occupy the seventh and eleventh positions respectively in terms of the global inflow of remittances

Migrant Remittances to and from the UK | The Migration Observatory

its interesting to see that out of total GBP 2,352 million remittance outflows from Britain, around GBP 1.1bil goes to just two countries, Pakistan and Bangladesh. while Britain itself is the 14th largest receiver of remittances of the world right now and Pakistan and Bangladesh on 7th and 11th place?

 

[livingdead]

Yup..that's the worry...but let's see how it goes once we come there..thnxs for sharing your thoughts though....

If you have experience you still can hope to get job. And no, there is no preference to white people in general.
It is not as bad as it was in 2008-09.

 

[Zabaniyah]

^^^^^^^^^^^^^^^^6
That's bad...i might have to go there for about 2 years due to my company needs...My wife is prepsring for her CFA level 3 and her exam is due on 3 June 2012...We were hoping that being a post grad in economics and all the three levels under her belt it would be easy to get a job....obviously it is silly to ask for jobs when economy is in recession but i will appreciate if anybody from UK can give a more clear picture about how the job market is going on there...

Unless you are a British citizen, it's almost impossible to get a career job as a foreigner. Their economy is very stagnant at the moment.

I've known a distant relative of mine who has an MBA from a highly reputed UK university two years ago, and he still couldn't find a career job over there.

My brother (who is already a UK citizen) on the other hand found a career job after graduating with a bachelor degree.

If not impossible, it'd be difficult.

 

[Hello_10]

sir, there are two type of economies, one is called 'doing good' and other 'not doing good'. and again we may categorize them by emerging/ developing economies or emerged/ developed economies. but here you are discussing about 'dirty' economies, the pigs/ PIIGGS economies, who earn less and spend more. and one day, a country like Germany will finally kick these all the pigs from EU...........

as in this Video, we can see that Germany is not willing to give his hands to others who are going in water. and the same news we are getting as below also:


Why a German bailout will make euro zone worse?

MUNICH: Although Europe may seem far away from the economic life of the average American, the fate of the euro zone weighs heavily on the United States economy. Pension funds have invested in bonds issued by southern European states, while banks and insurance companies have underwritten a sizable fraction of the credit-default swaps protecting investors against default.

It's no wonder, then, that President Obama is urging Germany to share in the debt of the euro zone's southern nations. But in doing so, he and others overlook several critical facts.

For one thing, such a bailout is illegal under the Maastricht Treaty, which governs the euro zone. Because the treaty is law in each member state, a bailout would be rejected by Germany's Constitutional Court.

Moreover, a bailout doesn't make economic sense, and would likely make the situation worse. Such schemes violate the liability principle, one of the constituting principles of a market economy, which holds that it is the creditors' responsibility to choose their debtors. If debtors cannot repay, creditors should bear the losses.

If we give up the liability principle, the European market economy will lose its most important allocative virtue: the careful selection of investment opportunities by creditors. We would then waste part of the capital generated by the arduous savings of earlier generations. I am surprised that the president of the world's most successful capitalist nation would overlook this.

This does not mean there can be no systematic risk-sharing between the states of Europe. But for that to happen, the countries should first form a common nation, with a constitution, a common legal superstructure, a monopoly on power to ensure obedience to the law and a common army for external defense.

Otherwise, there is nothing to counter the strong centrifugal forces created by redistribution schemes, which would inevitably lead to political eruptions that would threaten the stability of the Continent. The European Union has enjoyed a long period of stability because it abstained from sizable interregional redistribution. This period would end if we redistributed incomes or debt without creating a United States of Europe.

Unfortunately, not one of these conditions is met in Europe today and won't be in the foreseeable future, because the euro zone countries, above all France, are unwilling to give up sufficient sovereignty.

Even a European nation, however, should not socialize debt, a lesson demonstrated by the United States in the 19th century.

When Secretary of the Treasury Alexander Hamilton socialized the states' war debt after the Revolutionary War, he raised the expectation of further debt socialization in the future, which induced the states to over-borrow.

This resulted in political tensions in the early 19th century that severely threatened the stability of the young nation.

It took the experience of eight states and territories going bankrupt in the 1830s and 1840s for the United States to shed socialization. Today no one suggests bailing out California, which is nearly bankrupt but is expected to find its own solutions.

Criticism of bailouts in general does not mean, however, that Europe should eschew immediate help to crisis-stricken southern European countries. While help to avoid insolvency is dangerous, help to overcome brief liquidity crises is justified. The European Economic Advisory Group, an international think tank, has proposed providing liquidity help in the first two years of a crisis, with selective defaults according to maturity and socialization of excessive losses thereafter.

We are, however, already in the fifth year of generous liquidity help to Europe's uncompetitive members. Since late 2007, the European Central Bank has helped with an international shift of refinancing credit, also known as Target credit, from the core euro states to the periphery, to which the German Bundesbank has contributed $874 billion. Greece's and Portugal's entire current account deficits were financed that way.

Moreover, since May 2010, the E.C.B. has bought more than $250 billion in government bonds, while nearly $500 billion has come from rescue programs and help from the I.M.F. Add to that two European rescue funds, and you have a total of $2.63 trillion.

It is unfair for critics to ask Germany to bear even more risk. Should Greece, Ireland, Italy, Portugal and Spain go bankrupt and repay nothing, while the euro survives, Germany would lose $899 billion. Should the euro fail, Germany would lose over $1.35 trillion, more than 40 percent of its GDP. Has the United States ever incurred a similar risk for helping other countries?

Why a German bailout will make euro zone worse? - The Economic Times

 

[Hello_10]

Why Germany, not Greece should exit eurozone

NEW YORK: All the debate about the pros and cons of a Greek exit from the euro area is missing the point: A German exit might be better for all concerned.

Unless Europe's leaders take some kind of radical action, such as adopting and executing some of the many reform ideas they have floated, the currency union is headed for disintegration .

The problems of Greece, Ireland and Portugal have spread to Spain, the fourth-largest economy in the euro area. Italy is probably next. The other members of the currency union can't afford to bail them all out.

Further loans will serve only to exacerbate the fundamental problem of too much debt and add to the growing enmity between the strong northern tier and its wards to the south. Without healthy economic growth -- and Europe is now back in a recession -- multiple countries will have to restructure their sovereign debts.

Greece's agonizing two-year restructuring experience suggests that doing several more would be extraordinarily difficult , if not impossible. A Greek exit from the currency union would make the situation even worse.

There is no mechanism to decide , or deal with, whichever nation might be next, and even that presumes that exits could be managed. The more terrifying prospect is that the other afflicted countries might exit in an uncontrollable panic, complete with bank runs, failures and general disarray.

The accompanying repudiation of hundreds of billions of euros in debt would overstrain the European financial system, even Germany's .

The global economy would be paralyzed as everyone wondered which domino would be next to fall. What, then, might a German exit do? With integration and multiple restructurings so unlikely and withdrawal of the weak members so fraught, it might actually be the best of all available options.

A single, powerful nation would have the best shot at executing a relatively swift exit that would be over before anyone could panic. No agonising over who exits and who doesn't.

Stripped of its German export powerhouse, the euro would depreciate sharply, but would not become a virtually worthless currency, as, for example , any re-issued Greek drachma surely would. With the euro devalued, a Greek exit and devaluation would be relatively pointless.

So, no contagion or bank runs. With new exchange rates making all the non-euro financial havens prohibitively expensive, and with the threat of forced conversion into devalued national currencies removed, depositors in southern Europe would lose their impetus to run.

Why Germany, not Greece should exit eurozone - The Economic Times

 

[Hello_10]

sir, there are two type of economies, one is called 'doing good' and other 'not doing good'. and again we may categorize them by emerging/ developing economies or emerged/ developed economies. but here you are discussing about 'dirty' economies, the pigs/ PIIGGS economies, who earn less and spend more. and one day, a country like Germany will finally kick these all the pigs from EU...........

emergency action revealed to tackle 'worst crisis since second world war'
Thursday 14 June 2012

Sir Mervyn King announces emergency measures to help UK banks and boost business lending by at least £80bn

Sir Mervyn King has announced emergency measures to help banks and boost business lending after a warning from George Osborne that the "debt storm" raging on the continent had left the UK and the rest of Europe facing their most serious economic crisis outside wartime.

In a joint proposal between the Bank of England and the Treasury, banks will receive cut-price funds provided they pass on the benefits to their business customers.

This new "funding for lending" scheme could provide an £80bn boost to loans to the private sector within weeks and alleviate growing fears of a second slump since the start of the financial crisis in 2007.

In a second scheme the Bank will begin pumping a minimum of £5bn a month within the next few days into City institutions to improve their liquidity.

With one Spanish minister warning that the future of Europe could be decided within hours, both the governor and the chancellor used the backdrop of another day of financial and economic turbulence in the eurozone to express deep concern about the threat to Britain posed by Europe.

As interest rates on Spain's 10-year borrowing hit the 7% level and Angela Merkel insisted she was running out of patience with her fellow eurozone policymakers, King told a City audience at the Mansion House, London, that there was a "large black cloud of uncertainty hanging over not only the euro area but our economy too, and indeed the world economy as a whole".

Osborne said things were likely to get worse in the eurozone before they got better and insisted that the time for decisions had come. Strongly defending the government's handling of the economy, the chancellor said it had been the hard-won credibility built up over the past two years that had allowed the Treasury and the Bank to take action.

Thursday night's announcements were designed to shore up confidence before this weekend's elections in Greece, seen as a possible trigger point for a new phase in Europe's debt crisis.

In a speech to parliament in Berlin presaging a fortnight of crucial elections and summitry in Europe, an exasperated Merkel bluntly told the rest of Europe to get real about the crisis, dismissed calls for Berlin to share responsibility for other euro countries' debt, and rejected charges that Germany was not doing enough to stabilise the euro.

"Germany's strength is not unlimited," Merkel warned. "The way out of the crisis in the eurozone can only be successful if all countries are capable of recognising the reality and realistically assessing their strengths."

Merkel's uncompromising remarks came as Spain's foreign minister, José Manuel García Margallo, said: "The future of the European Union will be played out in the next few days, perhaps in the coming hours."

According to a report in the Spanish newspaper El País, García Margallo said: "The three months that [IMF boss Christine] Lagarde gave is possibly too long."

García Margallo called on the European Central Bank to buy Spanish bonds, and there was market speculation that the central bank had stepped in as the yield on the 10-year bond fell back below the 7% mark that had sent alarm bells ringing in the financial markets. In a dig at Germany, he added: "If the Titanic sinks, it takes everyone with it, even those travelling in first class."

Merkel expects to come under pressure when the G20 group of developed and developing countries meets for its summit in Mexico on Monday.

"Once again Germany will be the centre of attention," the German chancellor said, adding that some of the formulas being proposed for saving the euro using German money would simply amount to illusory short-lived fixes condemning Europe to a future of high debt and economic mediocrity.

Spanish government sources said the European council president, Herman Van Rompuy was due to meet Spanish prime minister Mariano Rajoy, Merkel, Italy's Mario Monti and French president François Hollande at the G20. Barack Obama, who has been pressing eurozone countries to act quickly to sort out the debt crisis, was also expected to meet the five eurozone leaders in Mexico. David Cameron may also join the meeting.

King raised the prospect on Thursday night that the eurozone would not emerge from the crisis intact. Noting that funding costs for UK banks were already going up as a result of the problems faced by the weaker nations of monetary union, the governor said: "Any significant redenomination of their currencies, or a default on domestic debts, would, both directly and as a result of the consequences for all our economies, put a dent in the capital position of our banks. As a result, investors demand a higher risk premium on loans to banks, pushing up the cost of borrowing for homeowners and businesses."

Underlining his concern about the pressures on UK financial institutions, the governor said Threadneedle Street would provide as much cash as banks required "given the turbulence ahead".

Osborne said the Bank and the Treasury were taking co-ordinated action to inject new confidence into the financial system and support the flow of credit to the real economy.

"We are not powerless in the face of the eurozone debt storm. Together we can deploy new firepower to defend our economy from the crisis on our doorstep. The government, with the help of the Bank of England, will not stand on the sidelines and do nothing as the storm gathers."

Debt crisis: emergency action revealed to tackle 'worst crisis since second world war' | Business | The Guardian