# Why would you want to move your money to Germany, I dont understand?



## tester1 (26 Nov 2011)

Ok so I understand the euro may collapse from hearsay/posts etc. 
However can someone explain why you would want to move your money to 1. Germany or 2. Spend it as another post suggests? 

The way I see it I will still need money for day to day expenses etc so I should keep my savings. 
Whatever happens my savings will be converted to our new currency???? 

Is it simply I would get more money for my savings if I had them in Germany? 

Very confusing stuff to the non financial minded?


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## Lightning (27 Nov 2011)

The basic argument is that deposits in Irish banks will get converted into a new Irish currency, while deposits in a German bank will get converted into a new German currency. The Irish currency will devalue significantly and the German currency will appreciate in value. 

All speculation. Speculation with some degree of consensus.


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## kennyb3 (28 Nov 2011)

CiaranT said:


> Speculation with some degree of consensus.


 
Which is the worrying part in itself. The more people that do it the more likely it is that there will be collaboration to identify account holders with foreign passports.


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## T McGibney (28 Nov 2011)

One person's consensus is another person's herd mentality. 

Sounds like today's version of 'get on the property ladder before it's too late'.


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## Brendan Burgess (28 Nov 2011)

T McGibney said:


> One person's consensus is another person's herd mentality.
> 
> Sounds like today's version of 'get on the property ladder before it's too late'.



Hi Tommy

There is undeniably a problem if everyone in Ireland transfers their money to a German bank account. 

But it's not correct to compare it with the property ladder which created a housing bubble. 

I see very little risk in transferring your money from an Irish bank account to a German bank account.  If the euro doesn't break up, you will be no worse off. If the euro does break up, you will be better off. If the euro breaks up and the Irish government insists that all Irish residents with German deposits repatriate them and convert them into punt nuas, you will be no worse off.


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## T McGibney (28 Nov 2011)

In the context of an Irish sovreign default and/or Euro collapse, is it beyond the bounds of possibility that Germany would choose to confiscate (or impose a ruinous levy) on funds held within their banking system by Irish residents?


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## andycole (29 Nov 2011)

JustforGroup - 

Here's a good reason for moving a porportion of one's savings outside Ireland into a Offshore Savings Account.....

If a person thinks that they may loose their job, then they may need to move into Europe to secure future employment - therefore with this in mind they will need to ensure that they will be able to avail of access to their savings. Now if Ireland defaults or whatever a Punt or whatever is not going to be of any use to somebody in this situation.

So probably the best insurance that one can take in this type of situation is to open and move savings into Offshore Savings Accounts?


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## justforgroup (29 Nov 2011)

andycole said:


> JustforGroup -
> 
> Here's a good reason for moving a porportion of one's savings outside Ireland into a Offshore Savings Account.....
> 
> ...



That's the only and most sensible reason I've read to date for moving some savings offshore.


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## Chris (29 Nov 2011)

I think Brendan summed it up best and most concise. If you move your money abroad or keep it here and nothing happens, then you have not lost out. If you move your money abroad and the Euro does break up then you benefit. If you keep your money and the euro breaks up you lose out a lot.



T McGibney said:


> In the context of an Irish sovreign default and/or Euro collapse, is it beyond the bounds of possibility that Germany would choose to confiscate (or impose a ruinous levy) on funds held within their banking system by Irish residents?


My dad taught me that desperate politicians will do desperate things, and I would put nothing beyond the realms of possibility when it comes to politicians. However, I believe that there is no precedence in the history of the FRG of asset confiscation of any kind. This was something that was done under the Kaiser and in Nazi Germany, so I would not see this as a particularly popular action.



justforgroup said:


> If I had followed the scaremonging from 2 or so years ago, my money would be sitting in some crappy Belgium account 'earning' 1% and I would have lost thousands - literally.


Two issues with this statement:
1) Interest rates in Germany and Belgium are available at 2%-2.5%
2) You are assuming that the crisis is over and that your money here is safe

The crisis that started in 2007/08 is far from over, you might be better off having kept your money here so far, but that doesn't mean that in the next years that will all be voided.


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## andycole (30 Nov 2011)

Interesting debate guys - 

In today's paper's there's a headline that states another 75,000 people are expected to emigrate from Ireland due to the present economic difficulities here. I personally think its prudent for most people to have at least a portion of their savings abroad and accessible in case its needed if they find themselves having to emigrate also. A Punt Nua or whatever would be of no use to somebody who finds themselves in this situation. But there's no doubt that our continued large scale emigration of our working population will also contribute to the ongoing Deposit flight.

And while something like this on a large scale is not going to do any favours to Ireland's Banks Deposit/Capital Base what choice do people have?


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## Brendan Burgess (30 Nov 2011)

Folks

Tester asked a simple question. 

The primary purpose of askaboutmoney is to answer such simple questions. 

If you want to debate other issues, do so in a separate thread. 

I have deleted all off topic and abusive posts.

This is a sensitive subject - but you should be able to discuss it without abusing each other and creating work for the moderators.

If someone is abusive or off-topic, please don't respond to it publicly. Use the Report Post facility and the moderators will deal with it. 

Brendan


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## Brendan Burgess (30 Nov 2011)

CiaranT said:


> The basic argument is that deposits in Irish banks will get converted into a new Irish currency, while deposits in a German bank will get converted into a new German currency. The Irish currency will devalue significantly and the German currency will appreciate in value.
> 
> All speculation. Speculation with some degree of consensus.



This is a very clear explanation of why people are moving their deposits to Germany.

To my surprise, I have heard that one of the major foreign banks have issued research to their clients suggesting that the punt nua would rise in relation to the German euro.  I don't understand this, but there is a risk that this will happen, so moving deposits to Germany is not risk-free, as I had thought. 

I remember when we broke the link with sterling - was it 1981? - the punt was expected to devalue and actually rose in value against sterling. 

Brendan


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## T McGibney (30 Nov 2011)

Brendan Burgess said:


> I remember when we broke the link with sterling - was it 1981? - the punt was expected to devalue and actually rose in value against sterling.
> 
> Brendan



Hi Brendan

We broke the link with Sterling in 1979. Jack Lynch was Taoiseach. I was only a child at the time so forgive any memory lapses but I recall that the punt did devalue by 20%-odd against Sterling and that the cost of imports shot up correspondingly very quickly.


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## Troy McClure (30 Nov 2011)

Brenadan do you have any more info on that? Do you have a link?


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## Brendan Burgess (30 Nov 2011)

T McGibney said:


> Hi Brendan
> 
> We broke the link with Sterling in 1979. Jack Lynch was Taoiseach. I was only a child at the time so forgive any memory lapses but I recall that the punt did devalue by 20%-odd against Sterling and that the cost of imports shot up correspondingly very quickly.



Hi Tommy, I went into a British bank with Irish punts a few days after and the punt was worth more than sterling. It was short lived, but the punt did rise.


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## Brendan Burgess (30 Nov 2011)

Troy McClure said:


> Brenadan do you have any more info on that? Do you have a link?



I don't. I am trying to get more information, but at this stage, it is important to note that it is possible. I would have thought unlikely but it is important to realise that you can't avoid risk completely and economists are very bad at forecasting.


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## T McGibney (30 Nov 2011)

Brendan Burgess said:


> Hi Tommy, I went into a British bank with Irish punts a few days after and the punt was worth more than sterling. It was short lived, but the punt did rise.



It must have been very short-lived Brendan. It took until the 1992/93 currency crisis for the punt to again reach parity with sterling. That was also short-lived.


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## Brendan Burgess (2 Dec 2011)

Troy McClure said:


> Brenadan do you have any more info on that? Do you have a link?



Hi Troy

I have found a reference to it here.

The research paper was done by [broken link removed]



> BofA Merrill Lynch foreign exchange strategists Richard Cochinos and  David Gray wrote in the note. If the euro broke apart, it would likely  entail a full dissolution with all countries returning to their original  currency or a partial union with only some nations exiting -- the more  likely outcome, BofA said.Under the partial breakup outcome, the  analysts projected an “initial shock” that would cause a “violent swing  in the euro,” followed by the currency settling about 2% lower on on Germany’s departure and 2% to 3% higher in the case of Spain, France and Italy leaving.
> ​
> In the less likely scenario of a total breakup, BofA said the currencies  of Germany, Ireland and the Netherlands are undervalued against the  U.S. dollar, while that of Spain, France, Italy and Portugal are  overvalued.
> ​



I don't understand it. Is it something to do with our very strong exports creating a demand for Irish currency? 

I think people would be very demoralised if they moved their money to a French bank account only to find the punt nua rising against the Franc.


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## frankmac (2 Dec 2011)

Didnt the euro rise against sterling too? And stay there. Wasnt the value of the euru to sterling around 70c to a £ in 2002?


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## elcato (2 Dec 2011)

> Wasnt the value of the euru to sterling around 70c to a £ in 2002


I recall it being that up until about 2007 before the banks started wobbling


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## paddyd (2 Dec 2011)

Brendan Burgess said:


> I think people would be very demoralised if they moved their money to a French bank account only to find the punt nua rising against the Franc.



I'm not so sure our biggest concern in the event of euro collapse and stronger punt would be those 'demoralised' few!

OP, I'm in the same boat as you, and I get the feeling we'll have a much better view into the next 12-18 months after next FRiday's leaders summit

the much-mooted fiscal union could answer the OP's question, in that you  wouldn't need to move your money to DE as the euro will be sticking around, but fiscial union will take  years, so we could go to the edge of the abyss a few more times before  this all ends ...


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## Lightning (3 Dec 2011)

The real question is will Irish voters approve fiscal union, via a referendum, even if we are asked twice. It is conceivable that Ireland will be the only EU nation to reject fiscal union. The consequence of such a sole rejection could have serious knock on effects.


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## captain-kirk (7 Dec 2011)

Reason is that it would be nice to have some money in an offshore bank account is needs be, in the event that the euro breaks up. no one is saying that you need to move all of it. but to move some would be a wise move.

reasons I think it might be a good idea to move some money to another euro country (austria, germany, france, the netherlands or luxembourg are the countries i would pick.):

1. it is a cheap way to move money out of ireland in case of euro collapse if you move it offshore now you can easily move it back if it turns out the euro is here to stay.
2. I think that it is prudent to have the ability to move money to a country like germany in our current circumstances. if you got whiff of a rumor that the changeover was going to happen you could do something.
3. germany and the above countries have stable banks.
4. If the euro collapses it might make make you some money if euro doesn't collapse well you were still making interest on it.
5. money can be transferrred over and back electronically from your computer at home. 


Caveat: I am not basing this on any professional knowledge only what i have read on the internet on forums like this and news stations.


My assumptions are as follows: 
a large German bank like DB is resonably well regulated and that its failure is unlikely
that in the event of a collapse the new deutchmark will be worth more than our punt nua quiet quickly.
we will not get a warning about the collapse of the euro (in the unlikely event that it happens).

the banks in the countries above will survive a euro collapse..   (ok now that i think of it that might be a bigish assumption)

Gold is too high to buy.

any investment i make carries a 1% government levy


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## seantheman (7 Dec 2011)

captain-kirk said:


> if you got whiff of a rumor that the changeover was going to happen you could do something.
> 
> 
> we will not get a warning about the collapse of the euro (in the unlikely event that it happens).


 
It's ok for you James T,you can probably teleport your funds quickly,What about us mere mortals,Which is it gonna be warning or no warning?


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## captain-kirk (8 Dec 2011)

seantheman said:


> It's ok for you James T,you can probably teleport your funds quickly,What about us mere mortals,Which is it gonna be warning or no warning?



Well we won't be given a warning I am basing this on the economic collapse in argentina where they just did it over night they converted everybodies money in the country into pesos even money in dollar denominated accounts was converted. the only people that had dollars after the conversion date were people who had offshore accounts.

these days an errant tweet by a politician  might be enough to send me scurrying.

but this is what i am saying if you had an account set up you could do it a trading account a bank account or even an account in one of those big online casinos (some of those have assets in the billions) 

look tbh I am the same as everyone else I don't know what is going to happen. I just heard this idea about moving some money to a german bank. What really freaked me out was reading about what happened in argentina and how everything went south there.


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