Big changes in Europe

**Ceashels** · 05-24-2010, 07:54 AM

Fiscal crises threaten Europe's generous benefits - Yahoo! Finance

I find the information in here astounding... not only for what most countries in Europe are cutting, but for what they had established as the norm to begin with.

Big cuts are coming to the unemployment, maternity and retirement programs.

Six weeks of vacation a year. Retirement at 60. Thousands of euros for having a baby. A good university education for less than the cost of a laptop.

The system known as the European welfare state was built after World War II as the keystone of a shared prosperity meant to prevent future conflict. Generous lifelong benefits have since become a defining feature of modern Europe.

Now the welfare state -- cherished by many Europeans as an alternative to what they see as dog-eat-dog American capitalism -- is coming under its most serious threat in decades: Europe's sovereign debt crisis.

Deep budget cuts are under way across Europe. Although the first round is focused mostly on government payrolls -- the least politically explosive target -- welfare benefits are looking increasingly vulnerable.

"The current welfare state is unaffordable," said Uri Dadush, director of the Carnegie Endowment's International Economics Program. "The crisis has made the day of reckoning closer by several years in virtually all the industrial countries."

No debates please....

**jas** · 05-24-2010, 08:35 AM

Very interesting indeed.

**imagine** · 05-24-2010, 08:52 AM

Ouch, That is going to hurt.

Discussions/whining happen here when schools cut activities because of the budget. Imagine what it would be like if it was more of your total was of life.

"The system known as the European welfare state was built after World War II as the keystone of a shared prosperity meant to prevent future conflict. "
I do have to wonder though what will happen when this system has changed will there be future conflict.

Just some quick thoughts of the top of my head.

**Greebo** · 05-24-2010, 09:04 AM

As I understand it, the protests in Greece have been over the bankrupt Gov't declaring that they needed to cut benefits. Apparently the Greek people wish to have their cake and eat it too.

Reality is about to give the entire European economy a real smack in the arse, if you ask me.

**daughter of pearl** · 05-24-2010, 09:13 AM

It's very scary. Most of my family is in England, and it's a big worry.

Great Britian has easily as much debt as Greece, it just hasn't yet had the impact it has had in Greece.

Interestingly, and I can't source this, but I read somewhere that both Denmark and Great Britian negotiated "opt out" clauses when they joined the EU...not clear what that would look like in reality?

Like a national prenup?

"Sorry it didn't work out, France and Germany and the rest of you, but I'm leaving now and taking my Beatles CD's and my land."

**Luckybustert** · 05-24-2010, 10:56 AM

Some very interesting "lessons learned" there. I've always found the benefits that were established rather shocking, too. There is no free ride, in my opinion.

**Darlene** · 05-24-2010, 12:47 PM

US economy is like a house of cards waiting to fall also. The government spends money we don't have on bailouts and a googleplex of social programs instead of budgeting, cutting back & cutting out.
Less government & more, much more personal responsibility & self reliance is what I want to see.

**Dutchie** · 05-25-2010, 03:22 AM

Our election is coming up in 2 weeks and our new government will also have to make MAJOR budget cuts to pay for the bailout that we also had of our banks (Dutch bank ING among others) and Greece. Our deficit is expected to rise to 6% (source Dutchnews.nl)

The TV debates have already started and the only thing that all parties can agree on is that HUGE cuts will have to be made.

I have listed some of the things that are being 'thrown out there' regarding what could possibly happen.

- cutting student financing so that any money students get will become a loan instead of a grant (at the moment it is always a loan up to when you get your degree then it becomes a grant). The amount at the moment is around $ 120 if you live at home and
$ 270 if you don't live in the family home.

- Doing away with mortgage tax relief (to various extents).

- Raising the pension age gradually from 65 to 67.

- Raising income tax (just what we need). Our top income level is 52%. They want to raise it to 60.

- At the moment we have healthcare which is compulsary. It is a sort of national private insurance with a basic insurance costing around $ 110 pp per month (from the age of 18 upwards - free before then) and you can expand this with just about everything - for a price. Unfortunately the basic insurance is being stripped yearly on what it covers so an extra insurance is usually always necessary.
For the last few years we have had a deductible of around $ 180/200 pp per year. Some of the parties want to raise this to around ... wait for it..$ 900 pp per year.

If all of these measures come into force then it would make a difference of at least around $ 1,200 per month for us.

Because of his position in the company my dh does have 6 weeks paid vacation per year. The norm is about 4 weeks.

We also have full paid sick leave for however long is necesssary. For example a colleague of dh's had a heart attack last Oct. He gradually started work per March and has just now started again full time. He never missed one penny of his salary - he was paid in full. However should he not be able to come back to work a rule is implicated after a certain amount of time. (I'm not sure how this works.)

We do not get money when a child is born. We do get an allowance from the government after a child is born each 3 months till the child is 18. (I think it is now about $120 per 3 months.)
Our health insurance covers the cost of a nurse/housekeeper to come in for 7 days after the baby is born to look after the house/mother/baby/other children in the family. If you are in the hospital for this time, then this service doesn't apply.

Our university fees are around $2000 per school year with books on top of that. This is regardless of which school you go to - law school/med school etc. However there are more and more private schools sprouting up which can charge what they like. Our youngest son went to a private college which cost us $10,000 per school year (various reasons for this).

We are coming closer and closer to banning the Islamic veil being worn in public places. Belgium I believe has already passed this. We have a couple of candidates who are great advocates of this rule.

Our unemployment benefit is 70% of the last pay for up to (I believe) 1 year. In this time they have to apply for jobs. This is checked all the time.

I have been following the EU euro problems with a lot of interest and have been dicussing this with my eldest son (former ecomonics major at uni). I too didn't understand why we just didn't let them 'suck it up' in Greece (a lot of the population thinks this).
It seems that the rest of the EU (and possibly the rest of the world too with the 'knock-on effects') would be in deep trouble if the Greeks went bankrupt because of international investments there - among many other things.

As mentioned, it is felt that Portugal could be next. In fact there is - what is called - the 'PIGS' countries. Portugal, Ireland/Italy, Greece, Spain.
According to my son, he isn't so afraid for Spain (don't ask me why) but has great fears for Portugal and Italy. Ireland it seems is also not out of the woods.
Interesting times wouldn't you say.

It won't matter what happens in our elections on June 9th, it is going to cost us a LOT of money.

**mek42** · 05-25-2010, 07:36 AM

Originally Posted by daughter of pearl

...

Interestingly, and I can't source this, but I read somewhere that both Denmark and Great Britian negotiated "opt out" clauses when they joined the EU...not clear what that would look like in reality?

...

Not sure about the EU, but Great Britain and at least two of the Scandinavian countries have maintained their individual currencies and are not on the Euro.

We in the states shouldn't be too harsh on Greece; we have a very similar situation brewing with California in our own backyard.

Do any of the Canadian provinces have particularly bad debt problems also?

Does anyone know of any websites that comparatively track things like GDP and debt load of at least the G20 if not more countries?

**Lora88** · 05-25-2010, 07:44 AM

One of the last conversations I had with my dad was about the economy He was having a really good day and was quite on point I asked if he had any advice about finances He said "watch Europe" if it goes bad there look out and hold on I said anything else and he said Yeah "Use your head for something besides a Hat rack" lol he had a great sense of humor. God I miss him I so wish he was here

**Bournecrazy** · 05-25-2010, 03:29 PM

One of the big things that has happened lately with the UK and government is that they bought out a scheme ages ago to set up child trust funds for newborns giving them 250 at birth and another 250 when they reach the age of 7 and wasnt accessable until they reach 18, which i think is a great plan but they have said they are getting rid of this 'benefit' if you like to call it that as of the end of 2010.

Many people have mixed views about this - mainly the ones who benefit and those who don't.

This is a new formed government so there is probably more changes to come (better or worse)

**Dutchie** · 05-26-2010, 02:45 AM

Originally Posted by Bournecrazy

One of the big things that has happened lately with the UK and government is that they bought out a scheme ages ago to set up child trust funds for newborns giving them 250 at birth and another 250 when they reach the age of 7 and wasnt accessable until they reach 18, which i think is a great plan but they have said they are getting rid of this 'benefit' if you like to call it that as of the end of 2010.

Many people have mixed views about this - mainly the ones who benefit and those who don't.

This is a new formed government so there is probably more changes to come (better or worse)

I watched the State opening of parliament yesterday on the BBC - really liked it.
We have more or less the same thing each Sept.

The benefit that you mention above - is the new government going to get rid of it or was it only meant to run till the end of this year anyway? Was this on top of any other benefits for families or was this it?

**Dutchie** · 05-26-2010, 03:02 AM

Originally Posted by mek42

Not sure about the EU, but Great Britain and at least two of the Scandinavian countries have maintained their individual currencies and are not on the Euro.

We in the states shouldn't be too harsh on Greece; we have a very similar situation brewing with California in our own backyard.

Do any of the Canadian provinces have particularly bad debt problems also?

Does anyone know of any websites that comparatively track things like GDP and debt load of at least the G20 if not more countries?

As far as I know, Sweden, Norway and Denmark do not have the Euro plus of course the UK.

I don't know if this is what you were looking for but here is a link with a LOT of info
GDP Gross Domestic Product Projections 2000, 2010, 2020, 2030, 2040, geographic.org Courty Profiles - Economy, Geography, Climate, Natural Resources, Current Issues, International Agreements, Population, Social Statistics, Political System, Flags, Ma

**britbunny** · 05-26-2010, 04:21 AM

Originally Posted by Dutchie

The benefit that you mention above - is the new government going to get rid of it or was it only meant to run till the end of this year anyway? Was this on top of any other benefits for families or was this it?

Hi,

It was good to see the Queen out and about wasn't it!

The Child Trust Fund was introduced about 8 years ago as an attempt to get people to save, every newborn received £250 for the fund that could then be added to by the parents. Another £250 payment was made when the child reached age 7 iirc. It was a big thing of Gordon Brown's, he is very focused on getting children out of poverty.

There was no statute that it would be abolished at the end of this year, but it was obviously going to be one of the first things to go. AFAIK there have been no changes to other child benefits, this savings account was on top of what we used to call "family allowance".

**Dutchie** · 05-26-2010, 10:05 AM

Originally Posted by britbunny

Hi,

It was good to see the Queen out and about wasn't it!

The Child Trust Fund was introduced about 8 years ago as an attempt to get people to save, every newborn received £250 for the fund that could then be added to by the parents. Another £250 payment was made when the child reached age 7 iirc. It was a big thing of Gordon Brown's, he is very focused on getting children out of poverty.

Yes, it was.
Doesn't she go out much now?
We have a royalty programme each week where we see what our royals have been doing - always nice to watch.

Regarding the Child Trust Fund, I can imagine that it was a godsend for a lot of children and their parents but did it have restrictions so that the parents could only add to it and not take money out?

We use to have something like this. It was a special savings account into which a maxiumum per year could be saved and at the end of a certain amount of years, the government would add 10%.
It ended a long while ago - unfortunately.