Macedonia & Greece: Name Issue

[Risto the Great]

The EUR is certainly floating but the value of each member country's contribution is effectively fixed by the EUR value. The USA has had a miserable time lately, yet the devalued USA dollar has meant a very quick turnaround for them. How can Greece devalue it's EURO as opposed to a strong Germany for example?

[Currency Trader]

. First you claimed that EU membership would produce economic prosperity and now you have admitted that EU membership has nothing to do with economic prosperity.

Each member country is ressponsible for its own fiscal policy and budgeting, taxation - That means economic growth is partly due to its own structure and implementation.

Nonetheless, being a member of EU does not mean there will not be any growth or prosperity as you seem to suggest with the following comment:

there is abundant evidence that none of these will occur

Can you provide the abundant of evidence that there will be no economic growth, investments etc for Macedonia to join EU?


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[Currency Trader]

The EUR is certainly floating but the value of each member country's contribution is effectively fixed by the EUR value. The USA has had a miserable time lately, yet the devalued USA dollar has meant a very quick turnaround for them. How can Greece devalue it's EURO as opposed to a strong Germany for example?

Can you elaborate what you mean by each country's "contribution" is effectively fixed by the EUR value? Just so I don't misunderstand you.

What "contribution" are you referring to, and how is this fixed?

When you say that U.S devaluation of USD has meant a very quick turnaround, can you point to growth statistics showing a dominant connection between the value of USD and U.S growth?

Greece can't devalue the Euro and that's hurting them as their economic structure, competition is poor relative to Germany or other EU members using EUR.

[George S.]

CT can you elaborate the advantages of macedonia joining the eu as to the disadvantages of not joining the eu.I personally beleive macedonia should stay put & not join the eu.What is it that macedonia will get if they join the eu??There's heaps of countries that don't want to join the eu for various reasons.

[Vangelovski]

Can you provide the abundant of evidence that there will be no economic growth, investments etc for Macedonia to join EU?-

Here's some FDI statistics for Bulgaria, which joined the EU in 2007. What was happening before 2007 and what happened after 2007?

http://www.investnet.bg/bulgarian-economy/EconomicDashboard/KeyEconomicIndicators/ForeignDirectInvestment/FDIAnnualData.aspx

Below is a link for Bulgaria's GDP growth rate. How does it fare since EU membership in 2007?

http://www.investnet.bg/bulgarian-economy/EconomicDashboard/KeyEconomicIndicators/RealGDP/GDPAnnualData.aspx

Maybe you can also tell us what has happened to the unemployment rate since 2007 below:

http://www.google.com/publicdata?ds=z9a8a3sje0h8ii_&met=unemployment_rate&idim=eu_country:RO&dl=en&hl=en&q=romania+unemployment+rate#met=unemployment_rate&idim=eu_country:BG

[Risto the Great]

Can you elaborate what you mean by each country's "contribution" is effectively fixed by the EUR value? Just so I don't misunderstand you.
What "contribution" are you referring to, and how is this fixed?

It is not the best word, I admit. But each EU member country using EUR sits in the world arena with a degree of inflexibility that does not apply to most other nations. It's ability to interact economically on an international scale is hampered as a consequence.

When you say that U.S devaluation of USD has meant a very quick turnaround, can you point to growth statistics showing a dominant connection between the value of USD and U.S growth?

Are you trying to suggest it is not helpful to have a lower value currency in times of recession? You want me to prove it? I understand the USA has improved economically over recent months. I am sure the devalued dollar is doing it no harm. Look it up.

Greece can't devalue the Euro and that's hurting them as their economic structure, competition is poor relative to Germany or other EU members using EUR.

So what you are saying is that you agree with me. Good. By squeezing the Greek population in every way other than messing with the EURO exchange rate, the deflation and recession will become even more severe and I cannot see how Greece (as an example) will be able to sustain itself. I do not fancy Macedonia's chances if it was in the same predicament. Do you?

Just to be sure, you are an EU advocate and recommend entry at any cost. Is this correct? Don't worry I am not referring to entering as FYROM (we have more than enough of those morons), but more to do with financial conditions. ?

[George S.]

CT how is macedonia going to benefit firstly from changing their name & then joining the eu,
how is that of any benefit.A small poor country like macedonia could be even still smaller & poorer for it.Where's the pie in the sky BS.Personally the biggest problem i see is countries will be responsible for the deficits other countries get in eg spain,ireland,greece.I don't think a small poor country like macedonia should join for many reasons appart for beng loss of sovereignity to the eu.Originally they said that the eu would create jobs.Well they closed the doors on bulgarians looking for work in other countries.Bulgaria has gone a retrograde step.

[Currency Trader]

Vangelovski

Here's some FDI statistics for Bulgaria, which joined the EU in 2007. What was happening before 2007 and what happened after 2007?

http://www.investnet.bg/bulgarian-ec...nnualData.aspx

I would hope that this is not your "abundance" of evidence that no growth will materialize for Macedonia.

Anyhow, prior to joining EU, Bulgaria had to fulfill a number of EU standards for qualification. As they were positioning the country for accession, their FDI grew. That's what you see in the chart prior to 2007.

You ask what happened after 2007 as FDI started to decline? The same that happened to other European countries - As the great financial crisis of modern times started to evolve from the U.S in second half of 2007, risk aversion and flight-to-safety started to spread. Equity markets, economic growth and FDI was on the brink of collapse. As result, besides U.S, European countries were in serious trouble.


Vangelovski

Below is a link for Bulgaria's GDP growth rate. How does it fare since EU membership in 2007?

http://www.investnet.bg/bulgarian-ec...nnualData.aspx

EU membership did not cause the decline of Bulgarias GDP growth rate. The modern day of financial crisis did - Every now and then economic growth will peak and a recession of various magnitudes will appear. Structural imbalances may also lead to recessions, just like the case with Greece, Spain or Portugal - Nonetheless, Bulgaria has rebounded since Q4, 2009.


Vangelovski

Maybe you can also tell us what has happened to the unemployment rate since 2007 below:

http://www.google.com/publicdata?ds=...=eu_country:BG

Yes, I can - Unemployment increased due to the aftermath of the financial crisis in U.S - Bulgaria is currently lagging other countries as the recovery takes place. In fact, many EU countries including new members since 2004 (Latvia, Estonia, Slovakia, Czech Republic, Malta, Lithuania etc) have seen their peaks in unemployment since early 2010.

The average EU unemployment (Feb data 9.5%) have also peaked.


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Having said that, would you be so kind to provide solid factual back-up for your claim that Macedonia will not see any growth or investment for joining EU?




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[Currency Trader]

RtG

It is not the best word, I admit. But each EU member country using EUR sits in the world arena with a degree of inflexibility that does not apply to most other nations. It's ability to interact economically on an international scale is hampered as a consequence.

If the exchange rate is of concern, they don't have to adopt it. Some countries have choosen not to use EUR but still be part of EU. Secondly, one of the main purposes to use a single currency was to facilitate trade within the union. The biggest trading partners for many new EU countries are within EU.

Third, countries that rely heavily on the ability to devalue or manipulate their exchange rate for the sake of economic growth, are probably weak in the first place. Domestic consumption or economic structure is not as strong as it should be, or domestic competition is poor relative to other nations.


RtG

You want me to prove it? I understand the USA has improved economically over recent months. I am sure the devalued dollar is doing it no harm. Look it up.

You are explicitly saying that the devalued USA dollar has meant a very quick turnaround for U.S - In other words, thanks mainly to the weak U.S dollar, growth in US made a very quick turnaround.

I'm asking you to point to growth statistics showing a dominant connection between the value of USD and U.S growth?



RtG

So what you are saying is that you agree with me. Good. By squeezing the Greek population in every way other than messing with the EURO exchange rate, the deflation and recession will become even more severe and I cannot see how Greece (as an example) will be able to sustain itself. I do not fancy Macedonia's chances if it was in the same predicament. Do you?

What I'm saying is that Greece's troubles are due to its own negligence, faulty statistics, poor competition, and miserable fiscal discipline. Even if Greece had the chance to devalue the currency, it would do no good in the long term as the reality of such gross negligence would eventually reach the surface.

The faulty with EU, lies with their enforcement structure. To oversee that each and every member follows the rules and regulations and standards of reporting statistics. Obviously, EU have not had any direct control over fiscal discipline other than certain deficit limits. But even this is slowly changing with penalties.

Macedonia has to prove that they are much more structurally organized and responsible for their governance of state finances and institutions.
Emperical research shows that there is a link between the quality of national institutions and economic growth.



RtG

Just to be sure, you are an EU advocate and recommend entry

That is correct - Macedonia has a large geographical market in their backyard.

[Currency Trader]

CT can you elaborate the advantages of macedonia joining the eu as to the disadvantages of not joining the eu.I personally beleive macedonia should stay put & not join the eu.What is it that macedonia will get if they join the eu??There's heaps of countries that don't want to join the eu for various reasons.

For starters, look at the development of the new EU members in central and eastern Europe. Prior to officially joining EU in 2004, they had undergone considerable trade liberalisation since early 1990s, which has increased their trade significantly.

Membership brings further trade liberalisation regarding sensitive sectors (agriculture, steel, services) and non-tariff barriers as well as a possible reduction of transport costs.

Furthermore, research point to FDI inflows as key driver for economic growth in central and eastern European regions in the second half of the 1990s. These countries later joined EU in 2004. Foreign investors regarded these countries as up-and-coming with structural improvements such as low cost production, skilled workforce and EU adapted standards.

I'd say the biggest opportunity lies with trade and FDI, followed by EU industrial standards of national institutions that contribute to economic growth - But bare in-mind, Rome was not built overnight. New members will develop differently depending on a host of variables, such as political maturity, goverance of institutions, legislation, fiscal discipline, skilled labour force, attractive taxation etc.

[Risto the Great]

CT,
Here is a nice extract of research from a previous period in USA's history:

http://www.aabri.com/manuscripts/09250.pdf

ABSTRACT
Falling exchange rates cause a decline in the value of the U. S. dollar, increasing import prices and reducing export prices. These relative price changes create income and substitution effects. This study uses an econometric model of the U.S. economy, developed using 1960-2000 data, to assess the relationship of recent changes in the exchange rate to changes in demand for imports and exports. The study finds the positive effects of export growth and substitution toward domestic goods, more than offset the negative effects on real income of higher import prices resulting from the 2000-2008 decline in U.S. exchange rate. The paper estimates the declining exchange rate (16.4%) stimulated exports and domestic consumer demand sufficiently to add 3.7% to total GDP growth over the period, and significantly decreased the trade deficit ($187.2 billion) from what it otherwise would have been. This decline in the trade deficit and the increase in domestic savings from higher incomes increased U.S. owned assets by an estimated $114 billion compared to what they would otherwise have been.

Unless you are denying there is a solid link between exchange rates and foreign trade, I think you are flogging a dead horse.

If the exchange rate is of concern, they don't have to adopt it. Some countries have choosen not to use EUR but still be part of EU. Secondly, one of the main purposes to use a single currency was to facilitate trade within the union. The biggest trading partners for many new EU countries are within EU.

Yeah, I don't think Macedonia will be using EURO for quite some time. But its EU debt will be in EURO currency. How will that change Currency Trader? My guess is that foreign debt will triple at the very least. Do you think Macedonia can handle it? Most of the economically piss weak EU nations can't. Further, the notion of having to contribute to funds for bailing out other fallen nations (Greece is a good example) surely will go down like a lead balloon.

Why will trade increase within the union? What makes you believe it will improve with EU entry? What about the prospects of trade improving without EU entry. It already is. Macedonia would be continue to be more cost competitive if Macedonia stays out of the union and would not be burdened with the layer of red tape that the EU is known for. Sounds like a plan.

What I'm saying is that Greece's troubles are due to its own negligence, faulty statistics, poor competition, and miserable fiscal discipline. Even if Greece had the chance to devalue the currency, it would do no good in the long term as the reality of such gross negligence would eventually reach the surface.

The reality you describe would not have happened "eventually". The reality would have been close to immediate without the buffer of the EU. It did not help anyone frankly.

Macedonia has to prove that they are much more structurally organized and responsible for their governance of state finances and institutions.
Emperical research shows that there is a link between the quality of national institutions and economic growth.

There is no evidence whatsoever that Macedonia has the ability you describe above. Yet the EU is desperate for a piece of Macedonia's action (or should I say un-mortgaged assets) lately. Macedonia should play harder to get.

Macedonia has a large geographical market in their backyard.

Unless a very large asteroid hits, I suspect Macedonia won't be moving soon irrespective of EU entry or not.


You support EU entry. This means you support the EU parliamentary resolutions on Macedonia. You also support the notion of bailing out other EU members. You also support the rampant debt escalation that will be inevitable with EU entry. You can't pick what you like about EU entry because they all come as one package. It is beyond dreadful if you ask me. If you are going to reply to anything in this post, please ensure you reply to my section in bold above as well.

[Risto the Great]

Here is a protestation about some of the EU resolutions described above:

http://macedoniantruth.org/forum/showthread.php?t=2929

Let me know what you disagree with.

[Vangelovski]

Anyhow, prior to joining EU, Bulgaria had to fulfill a number of EU standards for qualification. As they were positioning the country for accession, their FDI grew.

I know about the 2007 financial crisis. The point of those links was to get you to admit the above (again). EU membership has nothing to do with economic growth, it is economic reforms within that particular state. Membership itself does not guarantee anything. In fact, it can lead to dependence on socialist subsidisation and the creation of non-competitive economies as we have seen across Greece, Spain, Portugal and dare I say even Italy and France.

[Currency Trader]

RtG

CT
Here is a nice extract of research
Unless you are denying there is a solid link between exchange rates and foreign trade

This research ONLY shows that the exchange rate can have a contributing effect on growth. It does not prove that exchange rates are the dominant link or key driver for economic recovery thru foreign trade.

Let me remind you what you stated:

“The USA has had a miserable time lately, yet the devalued USA dollar has meant a very quick turnaround for them”

Your statement says that the quick recovery was due to devalued USD – Implying that export or foreign trade has been the dominant agent for growth - This is incorrect - In modern times, U.S growth is based on domestic consumption which accounts for nearly 70% of total GDP. Influencing household consumption is consumer credit growth, accommodative monetary policy, asset growth, future expectations, and jobs.


**************

RtG

But its EU debt will be in EURO currency. How will that change Currency Trader? My guess is that foreign debt will triple at the very least. Do you think Macedonia can handle it? Most of the economically piss weak EU nations can't

How much is the EU debt for Macedonia?

Every country has some form of debt on their national balance sheets, so why should Macedonia not have any debt, even if the debt is in EUR?

For what reasons will the foreign debt triple?

Obviously, any kind of debt increase would have to be carefully considered to avoid imbalances that may lead to higher cost of capital. But that is up the government to decide, just like any other nation. Debt is not a bad thing if it’s handled properly.

Macedonia will probably receive financial funds from EU on regional development, the so-called ERDF, ESF and Cohesion funding. These funds are provided for countries like Macedonia and are used to develop economic structures, creating jobs, research and innovation, and infrastructure investments. These funds are much needed and would support Macedonians development.


***************

RtG

Why will trade increase within the union? What makes you believe it will improve with EU entry?

For starters, look at the development of the new EU members in central and eastern Europe. Prior to officially joining EU in 2004, they had undergone considerable trade liberalization since early 1990s, which has increased their trade significantly.

Membership brings further trade liberalization regarding sensitive sectors (agriculture, steel, services) and non-tariff barriers as well as a possible reduction of transport costs.

Furthermore, research point to FDI inflows as key driver for economic growth in central and eastern European regions in the second half of the 1990s. These countries later joined EU in 2004. Foreign investors regarded these countries as up-and-coming with structural improvements such as low cost production, skilled workforce and EU adapted standards.

I'd say the biggest opportunity lies with trade and FDI, followed by EU industrial standards of national institutions that contribute to economic growth - But bare in-mind, Rome was not built overnight. New members will develop differently depending on a host of variables, such as political maturity, governance of institutions, legislation, fiscal discipline, skilled labor force, attractive taxation etc.


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RtG

What about the prospects of trade improving without EU entry. It already is

At what rate is the trade improving?

Secondly, as previously aforementioned, EU market is huge and there are advantages and opportunities that should not be missed out.


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RtG

Macedonia would be continue to be more cost competitive if Macedonia stays out of the union and would not be burdened with the layer of red tape that the EU is known for

What layer of red tape from EU would make Macedonia less competitive?


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RtG

The reality you describe would not have happened "eventually". The reality would have been close to immediate without the buffer of the EU. It did not help anyone frankly.

What do you mean that Greece’s negligence would not have happened “eventually”?


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RtG

There is no evidence whatsoever that Macedonia has the ability you describe above.

Macedonia is on the road to improve their state structures and institutions. They have made significant progress as determined by EU commission for membership. That is a good step in the right direction – this proves that they are able to reform and implement the foundation for better future. I’d say there is evidence of progress and ability to get things done, even though there has been some internal squabble as of late.


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RtG

I suspect Macedonia won't be moving soon irrespective of EU entry or not.

Macedonia is need of optimists and can-do people, not pessimists.

***********


RtG

You support EU entry. This means you support the EU parliamentary resolutions on Macedonia. You also support the notion of bailing out other EU members. You also support the rampant debt escalation that will be inevitable with EU entry. You can't pick what you like about EU entry because they all come as one package

You seem to be seeing everything in black and while.

Just because one supports EU entry, it doesn’t mean you have to support all resolutions. For logical reasons, there are good and there are bad resolutions. Just like in any other country, including yours. Each and every resolution will have to be judged independently and objectively. While bailing out other EU members is a bad thing, it will have to be judged upon the bigger picture. The risks for and against, and the conditional measures following a bail out.

It appears that EU has listened to financial markets and taken constructive steps to combat too much debt accumulation.



*

[Risto the Great]

This research ONLY shows that the exchange rate can have a contributing effect on growth. It does not prove that exchange rates are the dominant link or key driver for economic recovery thru foreign trade.

Let me remind you what you stated:

“The USA has had a miserable time lately, yet the devalued USA dollar has meant a very quick turnaround for them”

Your statement says that the quick recovery was due to devalued USD – Implying that export or foreign trade has been the dominant agent for growth - This is incorrect - In modern times, U.S growth is based on domestic consumption which accounts for nearly 70% of total GDP. Influencing household consumption is consumer credit growth, accommodative monetary policy, asset growth, future expectations, and jobs.

Are you in favour of fixed exchanged rates CT? Most people agree it is preferable to float rates. The benefits are obvious and immediate. The USA has gained from the lower exchange rate. I personally contributed to the USA economy today by purchasing a new Gibson Les Paul. See how much I like the USA at this exchange rate! The weak EU countries are effectively hamstrung because they do not have this economic policy tool to work with. Keep arguing about for the sake of it. No big deal.

How much is the EU debt for Macedonia?

Every country has some form of debt on their national balance sheets, so why should Macedonia not have any debt, even if the debt is in EUR?

For what reasons will the foreign debt triple?

Obviously, any kind of debt increase would have to be carefully considered to avoid imbalances that may lead to higher cost of capital. But that is up the government to decide, just like any other nation. Debt is not a bad thing if it’s handled properly.

Macedonia will probably receive financial funds from EU on regional development, the so-called ERDF, ESF and Cohesion funding. These funds are provided for countries like Macedonia and are used to develop economic structures, creating jobs, research and innovation, and infrastructure investments. These funds are much needed and would support Macedonians development.

Jeez, who the hell are you? Captain EU? The debt will increase, there is absolutely no doubt. Bulgaria is a decent example. Debt will triple. If it doesn't, the benefits you espouse won't happen. It is the only way you will get them, don't be so naive.

Read about the regional funding and what happened to Romania. Can you say "jobs for the boys" and "nouveau riche"

For starters, look at the development of the new EU members in central and eastern Europe. Prior to officially joining EU in 2004, they had undergone considerable trade liberalization since early 1990s, which has increased their trade significantly.

Membership brings further trade liberalization regarding sensitive sectors (agriculture, steel, services) and non-tariff barriers as well as a possible reduction of transport costs.

Furthermore, research point to FDI inflows as key driver for economic growth in central and eastern European regions in the second half of the 1990s. These countries later joined EU in 2004. Foreign investors regarded these countries as up-and-coming with structural improvements such as low cost production, skilled workforce and EU adapted standards.

I'd say the biggest opportunity lies with trade and FDI, followed by EU industrial standards of national institutions that contribute to economic growth - But bare in-mind, Rome was not built overnight. New members will develop differently depending on a host of variables, such as political maturity, governance of institutions, legislation, fiscal discipline, skilled labor force, attractive taxation etc.

Quite frankly, the above paragraph is such wankery I don't know what to say. New members LIKE MACEDONIA have zero political maturity, zero governance of institutions etc etc ... put ZERO in front of all of the above things EXCEPT for taxation. The taxation rate will go through the roof to pay back the debt you are not sure will exist for some bizarrely naive reason.

At what rate is the trade improving?

Secondly, as previously aforementioned, EU market is huge and there are advantages and opportunities that should not be missed out

Prove to me that trade will improve by more if Macedonia joins the EU.

I like Bulgaria:

What layer of red tape from EU would make Macedonia less competitive?

What is Macedonia's trade advantage with EU countries right now? It does not have to follow the same labour laws and it has flexibility that will not exist when it is subjected to the same regulations as all of the other EU countries. Nobody is saying Macedonia should not try to implement better industry practices by the way.

What do you mean that Greece’s negligence would not have happened “eventually”?

What I said. It would have immediately been reflected in a currency downfall. The EU buffer would not have propped up its lies for so long.

Macedonia is on the road to improve their state structures and institutions. They have made significant progress as determined by EU commission for membership. That is a good step in the right direction – this proves that they are able to reform and implement the foundation for better future. I’d say there is evidence of progress and ability to get things done, even though there has been some internal squabble as of late.

Look at that, all this improvement without succumbing to the EU and their vision for Macedonia. Macedonians can even travel to these countries more easily nowadays.

Macedonia is need of optimists and can-do people, not pessimists.

The EU is EXTREMELY optimistic about it what it can do to Macedonia.

You seem to be seeing everything in black and while.

Just because one supports EU entry, it doesn’t mean you have to support all resolutions. For logical reasons, there are good and there are bad resolutions. Just like in any other country, including yours. Each and every resolution will have to be judged independently and objectively. While bailing out other EU members is a bad thing, it will have to be judged upon the bigger picture. The risks for and against, and the conditional measures following a bail out.

It appears that EU has listened to financial markets and taken constructive steps to combat too much debt accumulation.

Do you think you will just get the "good stuff" when joining the EU? No attacks on sovereignty, not massive debt .... just the "good stuff".

Yes, I will see everything in black and white. If we rely on "grey", there is far too much room for confusion. In my 2 colour world, I see Macedonia's EU induced fragility becoming even worse as they implement their strategies to further reduce the sovereignty of the nation.

You did not address the actual EU resolutions at all. You should. If you are Macedonian you would feel ill about their wishes in relation to Macedonia. If you are Macedonian and you can see beyond that because it suits your bigger picture, then you and I are ideologically opposed. But take a look at Bulgaria if you want a pretty picture of the magic that the EU creates. The difference between Macedonia & Bulgaria is that the EU wants to see Macedonia change its name, become a federalised state based on ethnicity .... as well as being hocked up to the eyeballs.

How grey is the above for you? EU at any cost ay? Sounds like UMD stuff to me ..... refer to "jobs for the boys" if you ask me.