# Euro savings or not?



## Barnes& (17 Nov 2011)

I am English and my wife is Spanish. We live in Spain. For a number of years we have been saving hard with an aim to get out of the renting market and into the buyers market. We have just shy of 100,000 euros in a Spanish bank account. No bank will give us a mortgage as I am self-employed and my wife is currently on a temporary contract. Our concern is the growing Euro crisis and whether or not our savings would be better off somewhere else. We have an open bank account in the UK which is currently unused. 
My question is this:
No one knows what is going to happen to the Euro but, as far as I understand (and I am by no means an expert here - just an avid news reader), Spain _could_ end up leaving the Euro which I think would mean a return of a new devalued peseta. Should we move our money into GBP? or something else?


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## kennyb3 (17 Nov 2011)

Go seek independent financial advice with some of that €100k. There is no one right answer. If you get into GBP you ve big FX risk.


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## PolkaDot (17 Nov 2011)

My thinking is that it probably would be better to have moved your savings to GBP or USD in the event of the Euro collapsing (or a country leaving it and reverting to their own currency etc.)

But if this doesn't happen and the Euro survives, then your savings may devalue when you move them back to Euro.

It's a bit of a gamble. I have been mulling over what to do for several months now.

Possible idea is to spread your savings over several currencies.


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## PatK (19 Nov 2011)

I have to agree with PolkaDot on moving at least some of your money out of Spain.
Spain is a peripheral country and if the total of countries using the Euro becomes smaller then Spain will likely be one of the countries expelled or voluntarily leaving. 
100k in Spain mite be devalued to around 60k worth of todays Euro.
Best of luck


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## horusd (19 Nov 2011)

GB £ is being undermined right now with Quantative Easing. UK economy is heavily reliant on Eurozone. This should factor into your thinking. With the greatest respect I would ignore PatK's comment. There are no mechanisms to expel countries from Eurozone, and there is no possible way of lucidly commenting on any putative valuation of a re-issued Spanish currency. These are wild and unhelpful speculations. 

It will be in your interest to ensure your savings are in healthy banks, no matter what way the cat jumps, so this also should be a matter you consider closely. A spread of the money around several strong banks will help.


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## PatK (20 Nov 2011)

I agree with horusd that the UK is printing a lot of GB £, and therefore increasing the risk of their currency being devalued. However I stand by my comments about moving some money out of Spain so that not all of your eggs are in one basket. There are many posts on AAM about people opening up bank accounts in DB and other German banks as these are considered the safest in the Eurozone. Events are moving very fast in Europe and IF Spain leaves the € then their new currency will NOT be as strong as Germany and could be devalued by around 40%. Again, these are only my opinions and I don't have a crystal ball. 
It is probably best to seek independent advice as it seems hard to know what to do with cash in these uncertain times.


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## Lightning (20 Nov 2011)

On a side note, I can't get over the amount of posts & threads here and conversations I have had with people on taking their money out of the EUR or opening German bank accounts lately. 

'Deposit Flight II - The EUR Flight' is well and truly in progress. The consequences of this second wave of the deposit flight is likely to be much more serious that the 40%+ of deposits that were taken out of Irish banks, during the 'Irish bank deposit flight', in the latter half of 2010, especially if it becomes pan European.


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## capilano (20 Nov 2011)

It would be interesting to know just how much money has been transferred to Germany from all over Europe. I don't hear Angela complaining about that!


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## The Ghoul (20 Nov 2011)

CiaranT said:


> On a side note, I can't get over the amount of posts & threads here and conversations I have had with people on taking their money out of the EUR or opening German bank accounts lately.
> 
> 'Deposit Flight II - The EUR Flight' is well and truly in progress. The consequences of this second wave of the deposit flight is likely to be much more serious that the 40%+ of deposits that were taken out of Irish banks, during the 'Irish bank deposit flight', in the latter half of 2010, especially if it becomes pan European.


Where are the figures that show deposit flight is well and truly in progress? I googled eurozone + panic + savers and this was one of the first links that came up. Article from 10 days ago.
http://www.reuters.com/article/2011/11/10/europe-deposits-idUSL5E7MA0DI20111110

There's a difference between talking about moving savings and actually doing it. The average depositer may worry about his euro savings but he's also unsure about the alternatives.

Moving money to a euro account in Germany in anticipation of eurozone chaos and a return to a strong deutschmark is a speculative strategy. There are exchange rate risks, conversion costs and potential opportunity costs (lower interest rates) associated with opening offshore accounts in different currencies . We've seen what happened with the Swiss Franc recently, it was being recommended as a "safe haven" by Jill Kerby as late as 17th July, now she's referring to it as "wallpaper" - exaggeration on both counts in my view. 

I expect that we haven't heard the last of the bad news about the dollar and sterling - the mainstream media only appear able to focus on one disaster epic at the one time and that is currently the Eurogeddon Apocalypse but this may change in the future. What are those who opened sterling accounts in NI due to blind panic going to do then? Run around like headless chickens looking for the next safe haven?


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## horusd (20 Nov 2011)

capilano said:


> It would be interesting to know just how much *money has been transferred to Germany from all over Europe*. I don't hear Angela complaining about that!




True. The reason its being transferred is because people trust the Germans to manage money effectively. They have good reason to. Germany is the focal point because other countries, like our own, have so spectacularly failed in housekeeping. Nobody told Bertie, the electorate believed a pot of gold lay under a hammer, and apparently nobody told Bertie he was supposed to manage the economy either. The domino's of EU gov't's keeling over lately may be the beginning of a European return to fiscal riightousness as spendthrifts get the boot. But I wouldn't bet my house on it.


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