Europe
frigid settings Greece, Ireland and Portugal are so hard and economic forecasts so bad that perhaps can not repay loans. If things go wrong, the eurozone will split in two
JOSE MANUEL GARCIA-MARGALLO
The Council of Finance Ministers, meeting in Brussels last week, has returned to give the impression that European Union in its current form is unable to face the challenges of today and even less future. Chancellor Merkel, who is having to pull the car, seems prey to a public tired of having to pay for the blunders of others, not in vain in his country used the same word-schuld-much to say "debt "as if to say" blame. " The Finns have withstood everything they could to the rescue of Portugal and have only agreed to increase its firepower when they understood that to do so, no money to bail out Spain or any other country in distress. We'll see what they do when they discuss the European Stability Mechanism should start in 2013.
To prevent the escape of euro less creditworthy countries to restructure the debt would need more
budgetary discipline and competitiveness, more growth and solidarity
Supporters of a stronger economic governance say nothing. Sarkozy Merkel sent each morning to a stack of pages that end in the Trash noon. Berlusconi has enough bunga-bunga with, and the peripheral countries, affectionately known as PIGS, try to go unnoticed so that no one will bring their shame. So, the debt crisis, if not tackled in time, can become a banking crisis that put an end to the nascent economic recovery ... diabolical spiral.
Ministers agreed on the rescue of Portugal (78,000 million euros), in exchange for substantially raise taxes, cut the salaries of civil servants, pensions or unemployment benefits, and sells much of its public assets. Ireland will receive 85,000 million euros, but half of this amount will be earmarked to help their banks rather than invest in future costs. It is rumored that Greece might need 50,000 million euros more than it has received, provided that in exchange for an additional adjustment applied very hard (53,000 million euros) and a privatization program (50,000 million euros) so striking that the Prime Minister Papandreou has had to declare that the plan does not include the sale of "any island in the Aegean or any work of the Hellenic Heritage."
The settings are so hard and so bleak economic forecasts probably rescued countries may not repay the loans received, because to do so would have to bear some sacrifices its citizens do not seem willing to endure. That is precisely what happened in the Weimar Republic, which could not cope with the extravagant war reparations that were imposed at Versailles. More sensible would be to imitate the drafters of the Marshall Plan and to give aid to struggling countries in exchange for a restructuring plan and realistic economic recovery.
The possible scenarios that open from now are two. If things go wrong, the eurozone will split in two, either by the flight of the countries that have emerged from the crisis, or by the expulsion of those who remain in the doldrums. To avoid this division is to close ranks and take a leap in the process of European integration by putting in launched an economic government that balances unbridled power of the European Central Bank in managing monetary policy, while pursuing fiscal consolidation and economic growth.
The German tabloid daily demand of Germany out of the euro, but this is an unlikely scenario because the resurrected deutsche mark-or, where appropriate, a new hard euro share with Austria, Finland and the Netherlands - experience a fulminant revaluation would hurt their exports to third countries, and even more for countries of the euro sagging, who would take the opportunity to devalue their currencies and relieve its debt. Needless to say, that would also mean the disappearance of the internal market.
Recognizing this, Sarkozy has taken the opportunity to propose a light variant that would be the creation of a club of rich countries, which naturally would enter France that European bonds would issue under the principle of common responsibility. This option does not affect trade, but would practically out of the capital market to non called to the Lord's Table. If Winston Churchill would raise his head to a new iron curtain, this time financial, is about to fall on Europe.
The other way of splitting the Eurozone Eurozone is expelled from the least creditworthy countries to "(...) prevent gangrene from spreading "(Timo Soini, leader of the True Finns). Who lived near the "dollarization" of Argentina (2001), recall the chaos that led to reschedule deposits, business and bank balances, mortgages and a devalued currency. What would be worse here because European economies are much more open and interconnected than it ever was Argentina.
such a disaster to pull over, has raised a slightly more palatable option that would go through a debt restructuring, which could be tough to remove, or soft with extended deadlines and cut of interest. All with the consequent damage to the European Central Bank and the French and German banks, which are bonds that have more Greeks, Irish and Portuguese. The Germans did not want to put taxpayers money to help peripheral countries, but if they do end up having to put it to rescue their banks. As I said The Quail, a humor magazine of Franco: "When the forest burns, it burns something of yours, Count."
Any of the above scenarios is, as I said before, the split into two in the euro area: first, countries that have emerged from the crisis, or else, those who follow without raising head. The Europe of solidarity of the founding fathers would be replaced by a Europe Frigid frigid as that of Rubens Venus can be seen at the Royal Museum of Antwerp. A Venus retracted, squatting, turning their backs to the viewer and protecting your body and Cupid from the cold with a nearly transparent veil. Behind her, the satyr, which represents abundance with a cornucopia filled with fruit, he laughs. It is the allegory of the popular saying, "no food or drink, love grows cold."
The alternative to such a dramatic scenario is simply to get around this saying. More budgetary discipline, less economic and more competitive imbalances to avoid the nonsense that we have brought up here. But more growth and solidarity. The recipes are well known: correcting imbalances within the euro area, restore the solvency of banks ease monetary policy to offset the harshness of budgetary policy, issuing Eurobonds to lighten the debt burden and, above all, invent financial resources new to grow and create jobs. If for that, we need to reform the treaties will be done as soon as possible, the contrary is indignant encourage some who do not know what they want, but know very well what will not, and to certify the death of Europe's most ambitious project has ever undertaken.
José Manuel García-Margallo and Ivory People's Party MEP and vice chairman of the Committee on Economic and Monetary Affairs.
frigid settings Greece, Ireland and Portugal are so hard and economic forecasts so bad that perhaps can not repay loans. If things go wrong, the eurozone will split in two
JOSE MANUEL GARCIA-MARGALLO
The Council of Finance Ministers, meeting in Brussels last week, has returned to give the impression that European Union in its current form is unable to face the challenges of today and even less future. Chancellor Merkel, who is having to pull the car, seems prey to a public tired of having to pay for the blunders of others, not in vain in his country used the same word-schuld-much to say "debt "as if to say" blame. " The Finns have withstood everything they could to the rescue of Portugal and have only agreed to increase its firepower when they understood that to do so, no money to bail out Spain or any other country in distress. We'll see what they do when they discuss the European Stability Mechanism should start in 2013.
To prevent the escape of euro less creditworthy countries to restructure the debt would need more
budgetary discipline and competitiveness, more growth and solidarity
Supporters of a stronger economic governance say nothing. Sarkozy Merkel sent each morning to a stack of pages that end in the Trash noon. Berlusconi has enough bunga-bunga with, and the peripheral countries, affectionately known as PIGS, try to go unnoticed so that no one will bring their shame. So, the debt crisis, if not tackled in time, can become a banking crisis that put an end to the nascent economic recovery ... diabolical spiral.
Ministers agreed on the rescue of Portugal (78,000 million euros), in exchange for substantially raise taxes, cut the salaries of civil servants, pensions or unemployment benefits, and sells much of its public assets. Ireland will receive 85,000 million euros, but half of this amount will be earmarked to help their banks rather than invest in future costs. It is rumored that Greece might need 50,000 million euros more than it has received, provided that in exchange for an additional adjustment applied very hard (53,000 million euros) and a privatization program (50,000 million euros) so striking that the Prime Minister Papandreou has had to declare that the plan does not include the sale of "any island in the Aegean or any work of the Hellenic Heritage."
The settings are so hard and so bleak economic forecasts probably rescued countries may not repay the loans received, because to do so would have to bear some sacrifices its citizens do not seem willing to endure. That is precisely what happened in the Weimar Republic, which could not cope with the extravagant war reparations that were imposed at Versailles. More sensible would be to imitate the drafters of the Marshall Plan and to give aid to struggling countries in exchange for a restructuring plan and realistic economic recovery.
The possible scenarios that open from now are two. If things go wrong, the eurozone will split in two, either by the flight of the countries that have emerged from the crisis, or by the expulsion of those who remain in the doldrums. To avoid this division is to close ranks and take a leap in the process of European integration by putting in launched an economic government that balances unbridled power of the European Central Bank in managing monetary policy, while pursuing fiscal consolidation and economic growth.
The German tabloid daily demand of Germany out of the euro, but this is an unlikely scenario because the resurrected deutsche mark-or, where appropriate, a new hard euro share with Austria, Finland and the Netherlands - experience a fulminant revaluation would hurt their exports to third countries, and even more for countries of the euro sagging, who would take the opportunity to devalue their currencies and relieve its debt. Needless to say, that would also mean the disappearance of the internal market.
Recognizing this, Sarkozy has taken the opportunity to propose a light variant that would be the creation of a club of rich countries, which naturally would enter France that European bonds would issue under the principle of common responsibility. This option does not affect trade, but would practically out of the capital market to non called to the Lord's Table. If Winston Churchill would raise his head to a new iron curtain, this time financial, is about to fall on Europe.
The other way of splitting the Eurozone Eurozone is expelled from the least creditworthy countries to "(...) prevent gangrene from spreading "(Timo Soini, leader of the True Finns). Who lived near the "dollarization" of Argentina (2001), recall the chaos that led to reschedule deposits, business and bank balances, mortgages and a devalued currency. What would be worse here because European economies are much more open and interconnected than it ever was Argentina.
such a disaster to pull over, has raised a slightly more palatable option that would go through a debt restructuring, which could be tough to remove, or soft with extended deadlines and cut of interest. All with the consequent damage to the European Central Bank and the French and German banks, which are bonds that have more Greeks, Irish and Portuguese. The Germans did not want to put taxpayers money to help peripheral countries, but if they do end up having to put it to rescue their banks. As I said The Quail, a humor magazine of Franco: "When the forest burns, it burns something of yours, Count."
Any of the above scenarios is, as I said before, the split into two in the euro area: first, countries that have emerged from the crisis, or else, those who follow without raising head. The Europe of solidarity of the founding fathers would be replaced by a Europe Frigid frigid as that of Rubens Venus can be seen at the Royal Museum of Antwerp. A Venus retracted, squatting, turning their backs to the viewer and protecting your body and Cupid from the cold with a nearly transparent veil. Behind her, the satyr, which represents abundance with a cornucopia filled with fruit, he laughs. It is the allegory of the popular saying, "no food or drink, love grows cold."
The alternative to such a dramatic scenario is simply to get around this saying. More budgetary discipline, less economic and more competitive imbalances to avoid the nonsense that we have brought up here. But more growth and solidarity. The recipes are well known: correcting imbalances within the euro area, restore the solvency of banks ease monetary policy to offset the harshness of budgetary policy, issuing Eurobonds to lighten the debt burden and, above all, invent financial resources new to grow and create jobs. If for that, we need to reform the treaties will be done as soon as possible, the contrary is indignant encourage some who do not know what they want, but know very well what will not, and to certify the death of Europe's most ambitious project has ever undertaken.
José Manuel García-Margallo and Ivory People's Party MEP and vice chairman of the Committee on Economic and Monetary Affairs.
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