Euro Area

[Fragony]

But we aren't dependent, we have a stable economy, just about everything that goes to Europe goes through our hands first, I don't see how we can't return to it, people are also likely to invest in it for assurance, small but still too big to fall.

[gaelic cowboy]

But we aren't dependent, we have a stable economy, just about everything that goes to Europe goes through our hands first, I don't see how we can't return to it, people are also likely to invest in it for assurance, small but still too big to fall.

Well it all depends on how strong the currency will be after leaving as I said earlier if it goes below the Euro it will destroy your economy as you will owe more than you can pay back. You would have to default the debt basically if it weakened and that might cause problems when returning to the bondmarkets, for a few years the Netherlands could be practically barred from market funding if you defaulted.

[Fragony]

Well it all depends on how strong the currency will be after leaving as I said earlier if it goes below the Euro it will destroy your economy as you will owe more than you can pay back. You would have to default the debt basically if it weakened and that might cause problems when returning to the bondmarkets, for a few years the Netherlands could be practically barred from market funding if you defaulted.

No that won't happen, there is only one harbour in Europe that can empty these ships, we can give the sanctions. The guilder could be a temple of security.

(edit disclaimer I know absolutely nothing about economy)

[Tellos Athenaios]

Dutch debt isn't our biggest problem right now. Reason being: we *did* clear out our old debts before this new madness started, and unlike Ireland we still got a proper economy (as long as Germany, the UK, and France [in order of importance] have one so do we). In fact, you might remember that way back the finance ministries of the Netherlands, Sweden, etc. were kinda annoyed with “Heinz” and his French cousin for not being fiscally responsible according to the Maastricht treaty: they felt it set a bad example PIIGS would copy and fail to keep up with.

[gaelic cowboy]

Well then you have to think who buys Dutch goods is it Germany, France etc or is it someone else. If it is Germany and you pull out but they don't you would have to weaken the currency and this would severely affect your banking sector as it likely owed lots by the PIIGS.

If Germany pulled out and you did too you would have to try to ensure the currency was always below Germany but above the Euro. Thats if the euro existed anymore of course, which it would in some kind of form in order to service the debt.

If Netherlands is not exposed to a large amount of PIIGS debt and Germany pulled out then you could pull out take a small hit on debt and then follow the new D-Mark.

edit disclaimer obviously if Germany was not your main trading partner none of the previous thought experiment can happen.

[Fragony]

Thought experiments are cool. We really don't need the EU, so why wouldn't we say kthxbye. German and French industry needs what is shipped here. Good luck building that

[Vladimir]

BBCA has pretty much decided that Europe is falling back into another recession and that America is experiencing an economic resurgence. Has anyone seen anything on the national level to confirm this?

[Vladimir]

So is Germany trying to keep these countries in the Euro to artificially keep the price of their exports down? It seems like their products would get a lot more expensive if the Euro shed the dead weight.

[Vladimir]

You people are making me sad. I love tasty fish and it's a shame to read that so much is wasted. I can only imagine how bad the situation is in Japan.

[Tellos Athenaios]

Well then you have to think who buys Dutch goods is it Germany, France etc or is it someone else. If it is Germany and you pull out but they don't you would have to weaken the currency and this would severely affect your banking sector as it likely owed lots by the PIIGS.

Which would severely piss off direct Dutch competitors, for much the same reason an artificially cheap Yuan annoys the USA (despite the fact that an artificially cheap Yuan means a lower cost of living in the USA as well) so much. As for our banking sector, the real problem for the ING group was the USA/UK (which is part of what they focus on being insurance/securities kinda company), for the Rabobank no problems (being based on domestic accounts & housing finance mainly in the Netherlands itself), the ABN/Amro/Fortis got taken over by the state and the DSB group went bust.

If Germany pulled out and you did too you would have to try to ensure the currency was always below Germany but above the Euro. Thats if the euro existed anymore of course, which it would in some kind of form in order to service the debt.

That is basically what the case was before the Euro, with a brief spell of guilder > mark during the mid 90's when the Netherlands actually ran a budget surplus owing to a boom. Essentially the Netherlands is every bit as solvent as Germany is (possibly more so) but the Netherlands does not have the sheer economic muscle of 80 odd million Germans with a devoted Turkey & Balkan fanbase to cheer them on.

If Netherlands is not exposed to a large amount of PIIGS debt and Germany pulled out then you could pull out take a small hit on debt and then follow the new D-Mark.

Well a large amount obviously. Would not be surprised if it was mainly Irish debt through ties with the UK, and Spanish debt as well. But it is mostly the French and German banks which bought the PIGS (minus Ireland), and a lot of PIGS amongst each other for instance. (Spain owning Ireland owning Greece that kind of thing.)

edit disclaimer obviously if Germany was not your main trading partner none of the previous thought experiment can happen.

The real reason why the Netherlands cannot pull out has to do with the fact that the Netherlands heavily depends on those free flows of goods, capital and people -- transportation being what the Netherlands has been built around for hundreds of years and what determines the difference between a boom or a slow year, between a slow year or a recession. While in theory the Netherlands can do without the EU, the difference between having an EU and not having an EU (or at least having those treaties which ensure our economy can take full advantage of reduced overhead in dealing with different countries) ends up much, much more severe.