I'm puzzled - apologies if this question's already been asked and answered.
Greece - bankrupt.
France - bankrupt.
Portugal - bankrupt.
Spain - bankrupt.
Where's all the money gone, who's got it all?

China?? and some more characters

A lot of the missing money went to pay for new-build housing developments to developers that have now decided that they will not repay their loans.

The 'banks' realise that the security offered is reducing in value and will not cover the amount lent. Even if they repossess and sell the (worthless?) property there will be expenses that will consume the remainder.

Ireland has acres of unoccupied housing and unwanted commercial premises, and, I believe, so does Spain (and, no doubt, Greece).

Other money-pits will be businesses that had 'good ideas' and borrowed money to set up and run activities that have never become profitable so their overdrafts become debts that they cannot repay.

Then there's the general public who maxed-out their credit-cards and will never be able to pay off their liabilities. Many will be forced to go bankrupt and the banks will get zilch.

Don't forget: Ireland - bankrupt

The Germans probably because everyone borrowed money to buy German products.;)

Some examples of where the money went. Rich businessmen borrow millions from a bank in order to buy shares in said bank. Shares tank and said businessmen now owes the bank millions. But they have no chance of getting it back because their property portfolio is also worthless and because they're hiding assets from the creditors.

Developer borrows millions to build houses, the money goes to paying wages and buying materials. But houses go unsold and are worthless. Meanwhile the former workers and materials suppliers go out of business from lack of work and sign on the dole. But there isn't enough tax money to pay the dole because the former taxpayers are now out of work and the government refuses to grasp the nettle of excessive public service pay and allowances. So bailout needed.

In essence, the money has gone in two directions.

Where people are being paid pensions after less service, then it's money they haven't by Northern European standards, earned.
(Percentage Employment, ages 55-59: Germany 61%, UK 69%, Italy 26%)
The money is coming from deficits (in effect, loans to Government) to go to ordinary people.
Where taxes are not paid, it is again going from Government loanees to ordinary (non) tax payers.

Where the money is associated with a bubble, such as Spanish real estate, then it's effectively gone from mortgagers (the banks) to those who sold the properties (speculators generally, and some (former) householders).

Since banks are being backed by Government, and Government bonds in southern Europe are being backed by the ECB, the money has effectively gone from ordinary northern European taxpayers to ordinary southern European taxpayers, and speculators in bubbles.

Of course, the southern Europeans have kept the northern Europeans in a job by buying Volkswagens, etc. with their pensions/salaries from non-jobs, which is nice.

I stand to be corrected, but I think that's the simplest version of the overall picture.

Rearrange the following words, adding verbs, prepositions, and articles appropriately to make a sentence :

Brussels
Trough
Snouts
Pigs
Politicians
Corrupt
Lying
Devious
Self-interested

Thank-you all for that.

Much of the money has never existed in the first place.
Once again the thing that I understood (= has to be really understandable, if someone without much knowledge in economy does).

Money As Debt 1: what money is & why we are bankers' slaves - YouTube

(Percentage Employment, ages 55-59: Germany 61%, UK 69%, Italy 26%)

Fox3, that is scary. Is the Italian figure down to actual unemployment, or to unrealistic early retirement?

State funded early retirement. I seem to remember that a teacher only needs to work about 2 terms to get a full pension in Italy.

Well this 12 year old seems to understand where the money has gone ...

Victoria Grant - YouTube


And these people also ...

97% Owned: New Documentary | Positive Money (http://www.positivemoney.org.uk/97percent-owned-documentary/)

I think we should go back to the 'gold standard'

I've been wondering: Prior to the EU, if a country, say Italy, found its products becoming uncompetitive in price with the similar products of say, Germany, Italy could have adjusted the value of its currency.

Q1: What could Italy do now? Q2: Can the EU revalue the Euro against say, the US dollar? (I know it floats, but can it be 'manually adjusted'?)

The talk in Ireland was of "internal devaluation" - reduction in wages, living standards, etc. - for the reasons you gave. In theory, of wages could come down, employers could hire more people, goods and services would cost less, and so on. It hasn't worked, for a number of reasons (in my opinion):
- Wages are not coming down by enough: skilled people are still needed here, so wages have to be maintained to stop them emigrating to Australia. Companies seem to be going to extreme lengths to avoid taking on anyone who needs any training.
- Costs aren't coming down: why would they, when so much of Ireland's trade is with other Eurozone countries where costs have no reason to come down?

A certain Prof. Krugman had a few things to say on the question of internal devaluation, here (http://krugman.blogs.nytimes.com/2012/04/25/the-unbearable-slowness-of-internal-devaluation/):
What we see is that even in Ireland, which has made the most progress, wages have fallen only slightly. Since wages have risen in the rest of the euro area (that’s the bar labeled EA17), the actual internal devaluation is bigger — about 5 1/2 percent in Ireland’s case — but still only a fraction of what’s needed.
Oh, and Germany — which should be experiencing substantial internal revaluation, a rise in its relative costs — hasn’t.
You can argue that adjustment is happening here, but it’s painfully slow — and not remotely fast enough to avert catastrophe on the current course.

As for the question of "where the money has gone", it should be pointed out that money spent on things - houses, infrastructure, cars, etc. - has not left the economy, it's just been redistributed. So that doesn't answer the question, really.

One problem as I see it is the way money hasn't been spent by those who became rich off of the housing bubbles. Instead of being spent, it was "invested" - note the quotes - and moved from country to country. The way it moved around is the subject of whole books: look up shadow banking system (http://en.wikipedia.org/wiki/Shadow_banking_system) for a taste of what I mean. Some people and institutions became extremely rich through commissions on "virtual assets", and are hanging on to their assets - not spending, keeping the money out of the economy.

So with respect to easy re and devaluation, the Euro is a problem. Is there any way around it, without ditching the Euro and its advantages?

As well as bankers, developers etc. you have to remember that all of the countries that are in the poo have had bloated public services created by Socialist politicians in order to protect their power base.

Over-manning, overpaid, inefficient, early retirement and unearned pensions have sucked the capital out of their economies. For some bizarre reason, it seems that the more civil serpents they have, the less tax they are able to harvest from the public.

A few examples; Greek citizens are supposed to pay a tax on their swimming pools and only 600 were declared in the Athens area. When the authorities resorted to Google Earth to check on this, they stopped counting at 17,000.
It has also been said that if they were to efficiently audit middle class professionals, every Doctor, Dentist and Lawyer would end up in jail.

Stop bleating and start working. Every excuse is just smoke and mirrors.

Well, the whole debate at the moment is about fiscal union: co-ordination of government fiscal policy (taxation, spending). That's the stick, and the carrot is more robust support of current debts. In plain English: if you want Brussels to bail you out of your financial mismanagement, you'll have to accept more control of your taxing and spending from Brussels.

This is a cause of some consternation here in Ireland, since the low corporation tax rate here (12.5%) is about the only reason for foreign companies to invest here. The Pharmaceutical sector is particularly big at the moment, while tech companies like Google, PayPal and Facebook are expanding here. If Brussels (Germany in particular) gets its way, that rate will be stomped on, and that's the end of inward investment in Ireland by multinationals.
As well as bankers, developers etc. you have to remember that all of the countries that are in the poo have had bloated public services created by Socialist politicians in order to protect their power base.

Not entirely true across the board. Ireland hasn't had a Socialist government through any of this crisis, and the public sector is comparable in relative size and scope to the UK's. In Greece, tax avoidance was and is a huge issue, with a Cash mentality that went all the way up the white collar ladder. Doctors, lawyers, engineers - paid in cash, under the table. That's too simplistic a generalisation.

I can see it now.......... One New euro = Ten Old euro.

This is one of the many rich Richards.

Laughing at us all while on the way to the bank - HIS bank once owned by us and sold to him by his political friends for peanuts.

http://www.myinspirationforwomen.com/wp-content/uploads/2011/05/richard_branson-.jpg

Lid

Sadly, Miss Grant's solution could work in Canada but not necessarily elsewhere. Over 83% of Canada's debt is owed to Canadians or Canadian banks, and the number of Canadian banks that have gone bust is zero, and Canada has the capability of becoming self-sufficient in all major resources. This is not true for most countries.