Irish Euro vs French Euro

[seesaw]

It looks like the whole scramble for foreign euro bank accounts is a waste of time. I think the idea that in the event of a breakup an account in France/Germany/Netherlands with an Irish address would be converted to punts is what would most likely happen.
Its similar to people initially moving their money from Irish owned banks in Ireland to foreign banks in Ireland and then realising they still weren't safe.
The only way out of that scenario is to transfer out of the euro and run the exchange risk.

 

[Troy McClure]

Thats an interesting article Swyper. However nowhere in it does it mention moving money from Euro to Euro. From the below quote from the article I would have thought it is looking at money going outside the Eurozone.

"The European Commission is working with Switzerland and Greece stop what it believes is an ongoing exodus of money from Greek bank accounts into Swiss and other offshore banking centers, the EU official said."

 

[Swyper]

Thats an interesting article Swyper. However nowhere in it does it mention moving money from Euro to Euro. From the below quote from the article I would have thought it is looking at money going outside the Eurozone.

"The European Commission is working with Switzerland and Greece stop what it believes is an ongoing exodus of money from Greek bank accounts into Swiss and other offshore banking centers, the EU official said."

I guess for me, it's not so much what the article says, but what it is pointing to in terms of possibilities and precedent. If you think that the EU/ECB is going to be happy filling Irish banks with Euros which later on get converted to pre-devaluation punts (with the EU/ECB taking the FX loss), while Irish residents pour money into German banks waiting for a devaluation, then you should go ahead and put money into your German bank account.
In my view, it is a very easy thing to do once the Swiss/Greek precedent has been set.

Let's look at it from the other side. If the European authorities did NOT do this, then they would effectively be rewarding those who magnified an existing crisis. If Irish borrowers get a huge write-down in debt through the conversion of debt to pre-devaluation punts, then you can be sure that the cost of that is going to pushed to Irish savers through the same mechanism. Otherwise it would, in effect, be German taxpayers paying for Irish debt write-down by the backdoor.

For me, putting all your money into German (or worse, French) deposit accounts is not a good hedge. A diversification across non-Euro denominated cash and assets is the best way to diversify if you think Ireland and the Euro will divorce.

 

[44brendan]

This discussion can't be for real!! Does anybody really think that in the event of a Euro break up that German/French issued notes will be more valuable than Irish issued notes. This is a surreal concept and has absolutely no basis in fact.

 

[Troy McClure]

Brussels wont mind as long as some Euro bank is getting the deposits. Do they expect taxpayers here to bail out large Euro banks and not be able to use them. It would also, and I am open to correction, break the law as it stands in Europe.
It would be lunacy as if this were true it would cause a cash run on banks. There would be bags of cash buried all over the place.
I think this is a timely rumour started by an Irish bank official..

 

[Troy McClure]

This discussion can't be for real!! Does anybody really think that in the event of a Euro break up that German/French issued notes will be more valuable than Irish issued notes. This is a surreal concept and has absolutely no basis in fact.

I dont thing your getting the point. If there is a breakup there will be a devaluation here. The notes 'in hand' will be worth the same but there would like be a devaluation of debts and savings in banks. In stronger countries their newer currency would likely appreciate.

 

[Swyper]

Brussels wont mind as long as some Euro bank is getting the deposits. Do they expect taxpayers here to bail out large Euro banks and not be able to use them. It would also, and I am open to correction, break the law as it stands in Europe.
It would be lunacy as if this were true it would cause a cash run on banks. There would be bags of cash buried all over the place.
I think this is a timely rumour started by an Irish bank official..

I think you're making the mistake of assuming they give a rats ass about the Irish taxpayer.

And "the law" is the worst argument that this wouldn't happen. There's no law that allows the ECB to lend to countries. So what does it do? It lends to the IMF who lend to eurozone countries. There is no law that allows for the forced conversion of Irish-based eurozone deposits into punts. We're in a zone where events are infinitely faster than the ability of the law to catch up.

If the European authorities *don't* impose any forced repatriation of deposits, then it would be a huge giveaway to Irish borrowers at the expense of European taxpayers. With Italy and Spain now in our boat, that will not be allowed to happen.

 

[Ethan 1]

I'm just keeping all the notes I have that their serial number start with a Z, cos they are apparently German euro notes. So if the euro goes I'll have their currency.

I hope you mean X or you have just accumulated a large amount of €'s from a country with no Govt.

http://en.wikipedia.org/wiki/Euro_banknotes

 

[elcato]

I hope you mean X or you have just accumulated a large amount of €'s from a country with no Govt.

I wrote that wikipedia page as well. I just want others to be fooled so I'm the only one to get the 'right' euro notes. Shh now.

 

[shnaek]

Let's look at it from the other side. If the European authorities did NOT do this, then they would effectively be rewarding those who magnified an existing crisis.

Rewarding those who magnified the crisis? That would never happen. Sher haven't even the people who created the crisis been held to account.

 

[Ethan 1]

I wrote that wikipedia page as well. I just want others to be fooled so I'm the only one to get the 'right' euro notes. Shh now.

Writing a wiki page is good but what really impressed was you've hacked the ECB

http://www.ecb.int/euro/banknotes/html/index.en.html

Any chance you could drop a few zeros from our account, quiet a few would help

 

[Swyper]

Interesting one:

"On Friday, Merrill Lynch became the latest to issue a report exploring what would happen if countries were to exit the euro and revert to their old currencies. If Spain, Italy, Portugal and France were to start printing their old money again today, their currencies would most likely weaken against the dollar, reflecting the relative weakness of their economies, Merrill Lynch calculated. Currencies in the stronger economies of Germany, the Netherlands and Ireland would probably rise against the dollar, according to the analysis."

http://www.nytimes.com/2011/11/26/b...eakup-of-the-euro-zone.html?pagewanted=2&_r=1

 

[Time]

Well people in Greece are empting their bank accounts and hoarding Euro banknotes in case the Euro is suddenly withdrawn. There will be no warning at all of any re-denomination.

 

[Swyper]

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