Euro Zone Crisis as an "Issue of Familial Relations"

[yp]

Found this article interesting; it represents the Euro Zone as a family and the crisis as the issue of how to solve financial matters among the members of the clan. Starring:

 

- " Greece as the wayward uncle who never seems to settle down and who keeps asking for a little money to tide him over"

 

- "Germany is the slightly priggish older brother, who ...  usually relents in the end."

 

- and others.

 

http://blogs.reuters.com/edward-hadas/2012/06/13/the-euro-crisis-as-family-drama/

 

Sorta helped my young, feeble mind get a slightly better understanding of the crisis with some mildly amusing analogies and history :D

[scorpioncapital]

Nobody says it but Germany is equally to blame in this crisis. For a decade, they have been overstating their exports. The greeks cooked their books, but in my mind, the Germans did too. 40% of their exports went to their Euro friends. But since the money to pay for that was partly a fiction/vendor financing, then German exports was partly a fiction. The difference is they got the money in Euros up front and now don't want to give part of it back - that's money that should never have been made because the buyers of the goods didn't actually have the money to buy them.

[yp]

  On 6/15/2012 at 4:31 PM, scorpioncapital said:

Nobody says it but Germany is equally to blame in this crisis. For a decade, they have been overstating their exports. The greeks cooked their books, but in my mind, the Germans did too. 40% of their exports went to their Euro friends. But since the money to pay for that was partly a fiction/vendor financing, then German exports was partly a fiction. The difference is they got the money in Euros up front and now don't want to give part of it back - that's money that should never have been made because the buyers of the goods didn't actually have the money to buy them.

 

Forgive me, but I'm not sure I fully understand what you mean.

 

If Germany provided the goods and took equivalent value in euros, isn't that fair exchange?

 

Or do you mean in more of a moral sense because those other countries would be required to take debt to repay Germany for its exports?

[yp]

  On 6/15/2012 at 5:19 PM, yp said:

  Quote

Nobody says it but Germany is equally to blame in this crisis. For a decade, they have been overstating their exports. The greeks cooked their books, but in my mind, the Germans did too. 40% of their exports went to their Euro friends. But since the money to pay for that was partly a fiction/vendor financing, then German exports was partly a fiction. The difference is they got the money in Euros up front and now don't want to give part of it back - that's money that should never have been made because the buyers of the goods didn't actually have the money to buy them.

 

Forgive me, but I'm not sure I fully understand what you mean.

 

If Germany provided the goods and took equivalent value in euros, isn't that fair exchange?

 

Or do you mean in more of a moral sense because those other countries would be required to take debt to repay Germany for its exports?

 

I just looked up vendor financing on Investopedia; I see what you mean now. They're basically buying their own product, until such a time that the other EU countries return the value of the exports.

I can see how there could be issues with this. There's no cash flows; just deferred payments.