Can Greece (or even the Euro) be saved?

[rumborak]

So, not to anyone's surprise, Greece is not able to save nearly enough money they would need, and on top of it they will need to attract new investment. Neither is likely happening.
What's the solution? A "North Euro" as some have suggested? In my opinion it doesn't get to the heart of the problem, that being that a monetary union can not work without a unified financial policy. It's just a question of time until the next country completely mismanages their finances.

Opinions?

rumborak

[kári]

It's just a question of time until the next country completely mismanages their finances.

No, no, it's a question of time until the next country fails to keep hiding that they are.

[rumborak]

Well, yes
But there are countries that are much more transparent in their finances and less corrupt (usually the Northern ones). My point is tat even a well-kept country could quickly descend into bad finances under the right (wrong) circumstances. So, without something that keeps countries back from just spending far more money than they have, I don't see how the Euro can stay a stable unit.

rumborak

[kári]

Yeah I get what you're saying but I'm not familiar (as in I have no idea at all) about the way a country manages their finances and stuff like that. So my reaction to "without something that keeps countries back from just spending far more money than they have" is "There isn't something to keep them back?"

[rumborak]

Right now financial policy is 100% in the hands of each sovereign country. That's why Greece could keep borrowing to no end. They were supposed to report their numbers to the EU, but fudged them and that was all they needed to do to keep going.

rumborak

[kári]

So why isn't there an ... entity? yet that controls/checks/monitors the budget and spendings of each country in the EU zone?

[berrege]

More economic integration in the euro zone is the answer.

[Riceball]

I've eulogised the Euro in a couple of other threads, so I'll keep this brief(ish probably, its monday morning )

Quite simply, the way I read it, two things can happen:

a) Greece pulls a Latin-America: leaves the Euro, radically devalues its own currency and lets its economy rebalance and adjust.
b) We keep kicking the can (I hate that term) and keep hitting "crisis" points every few months until the Greek economy eventually adjusts.

The problem with Greece is that they don't actually have industry or a very strong economy, so that makes structural adjustment even harder because first they have to actually build an economy to adjust.

In regards to other stuff ITT:

 - more economic integration would be great, but the Europeans are a skeptical bunch and would see it as a power grab by Germany and France (...I guess? This is what I've read)
 - there was an 'entity' of sorts, but Greece fudged their numbers for years to keep their membership so, again, the skepticism rules that out essentially
 - greater fiscal integration, which is kind of what it being achieved through the stability fund thingo that they've set up, would be ideal. You would then be able to transfer some of the gains out of Germany and France for having the common market, common currency, strong internal migration etc to the peripheral weaker countries. Kind of like a massive federalist state.
 - talk of fiscal controls, again, would fall pretty flat (however I *kind of* like this idea)

[nikostheater]

From what i see in my country many months now,now,Greece can't be saved.
I am not too optimistic about Euro either.

[Riceball]

I'd just like to point out that following all of the stuff over the weekend, Greek one year bond yields are currently sitting above 100%.

By contrast, Australia's one year bond yields are sitting at 3.8%.