http://globaleconomicanalysis.blogspot.com/2012/06/eurozone-1-shell-game-stimulus-mirage.html
I added emphasis to the word "necessary" in the above clip. However, I cannot take credit for it.
Instead, credit goes to Financial Times writer Martin Wolf for his columnThe G20 on the eurozone and fiscal policy
There is no stimulus plan. It's a shell game. No new funds have been promised for stimulus. Rather, previously earmarked funds will simply be given that label.
Bear in mind that I am not in favor of stimulus plans anyway, at least monetary ones.
The best stimulus plan Europe and the US could possibly do is modify work rules making it easier to fire (and therefore hire) workers, scrap prevailing wage laws, end collective bargaining of public unions, scrap tariffs, and eliminate farm subsidies. Instead, France is taking a giant step backwards as noted in Hollande About to Wreck France With Economically Insane Proposal: "Make Layoffs So Expensive For Companies That It's Not Worth It"
Greece's new government should stop asking for more help and instead move quickly to enact reform measures agreed to in return for previous bailouts from its European partners, German Finance Minister Wolfgang Schaeuble said on Sunday.
Schaeuble told Bild am Sonntag in unusually blunt language that Greece has forfeited much of Europe's trust during the sovereign debt crisis, as reflected in an opinion poll covering the euro zone's four biggest nations and published in the paper.
"The most important task facing new prime minister (Antonis) Samaras is to enact the program agreed upon quickly and without further delay instead of asking how much more others can do for Greece,» said Schaeuble, a close ally of Chancellor Angela Merkel and Europe's most powerful finance minister.
Greece's new three-party coalition government said on Thursday it would renegotiate the terms of the 130-billion-euro bailout deal that is helping the country avoid bankruptcy.
The coalition's platform particularly challenges euro zone paymaster Germany, which has offered to adjust the lifeline's terms to make up for time lost as a result of two Greek elections since May, but refuses to revise it radically.
Greece wants a two-year extension to the 2014 deadline for it to cut its budget deficit to 2.1 percent of national economic output, from 9.3 percent in 2011. The extension would require an extra 16 to 20 billion euros in foreign funding.
"The ball is now in Greece's court,» said Schaeuble. «It's in their hands to win back the confidence of the people of Europe. They're only going to accomplish that with concrete actions and deeds."
The poll of 4,000 people in Germany, France, Spain and Italy showed 78 percent of Germans and 65 percent of French people wanted Greece to leave the euro zone, with 51 percent in Spain and 49 percent in Italy also backing a Greek exit.
Sunday, June 24, 2012 12:57 AM
Eurozone 1% Shell Game Stimulus Mirage; Meaning of Necessary; "Real" Stimulus
Germany, France, Italy, and Spain have agreed to spend 1% of GDP on new stimulus measures.
Where is the money coming from? They will not say. Most likely from somewhere else, better known as nowhere.
The Guardian reports Eurozone big four pledge 1% of GDP to underwrite banks and stimulate growth.
Where is the money coming from? They will not say. Most likely from somewhere else, better known as nowhere.
The Guardian reports Eurozone big four pledge 1% of GDP to underwrite banks and stimulate growth.
The leaders of the eurozone's biggest economies announced on Friday night that 1% of the European Union's GDP was to be set aside to help the continent grow its way out of the financial crisis. But doubts were immediately expressed as to what share of the package – said to be worth €130bn (£105m) – would be genuinely new money.
After several hours of apparently tense discussions, there was no immediate agreement on a plan outlined by Italy's prime minister, Mario Monti, on Thursday, aimed at stabilising Europe's banks and protecting countries under attack in the markets.
"There was an agreement between all of us to use any necessarymechanism to obtain financial stability in the eurozone," said Mariano Rajoy, the Spanish prime minister, afterwards.Meaning of "Necessary"
But the German chancellor, Angela Merkel, insisted that the EU must take full advantage of the instruments already at its disposal. Her remark suggested she is wary of two new funds – to guarantee bank depositors and as a lender of last resort to ailing banks – understood to have been on the agenda at Friday's talks.
In a sign that tempers are becoming increasingly frayed before next week's crucial summit, the normally gentlemanly Monti used his closing remarks to attack France and Germany publicly.
Nicholas Spiro, of Spiro Sovereign Strategy, said: "The pact has a shuffling of the deckchairs feel to it."
I added emphasis to the word "necessary" in the above clip. However, I cannot take credit for it.
Instead, credit goes to Financial Times writer Martin Wolf for his columnThe G20 on the eurozone and fiscal policy
This week’s G20 communiqué dealt with the eurozone. Let us examine it closely.Real Stimulus
“Euro area members of the G20 will take all necessary measures to safeguard the integrity and stability of the area, improve the functioning of financial markets and break the feedback loop between sovereigns and banks.”
The crucial word here is “necessary”. We can safely say that agreement on what this means is altogether lacking.
There is no stimulus plan. It's a shell game. No new funds have been promised for stimulus. Rather, previously earmarked funds will simply be given that label.
Bear in mind that I am not in favor of stimulus plans anyway, at least monetary ones.
The best stimulus plan Europe and the US could possibly do is modify work rules making it easier to fire (and therefore hire) workers, scrap prevailing wage laws, end collective bargaining of public unions, scrap tariffs, and eliminate farm subsidies. Instead, France is taking a giant step backwards as noted in Hollande About to Wreck France With Economically Insane Proposal: "Make Layoffs So Expensive For Companies That It's Not Worth It"
and Tony Blair has been unearthed to tout the " Grand Plan " to save the euro - like anyone in Germany gives a rat's arse what Tony Blair thinks ..............
http://www.guardian.co.uk/politics/2012/jun/24/tony-blair-germany-eurozone
Tony Blair calls on Germany to back 'grand plan' to save eurozone
Future of the euro rests on Germany being prepared to accept the debts of one as the debts of all, former prime minister says
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Tony Blair said on the Andrew Marr Show that in his view Britain could still join the eurozone if it stabilised Photograph: Getty Images
The eurozone is doomed unless Germany agrees to underwrite the debts of struggling members, Tony Blair has warned.
The former prime minister said on Sunday that the problems were now so serious that a "grand plan" was the only way to prevent a break-up.
He also suggested that Britain could still join the single currency area if it stabilised.
Blair's intervention came as EU leaders prepare for a crunch summit this week that could determine the eurozone's fate.
In a new twist, it emerged that the newly-elected Greek prime minister, Antonis Samaras, will miss the event after undergoing eye surgery.
Speaking on the BBC's Andrew Marr show, Blair said: "The only thing that will save the single currency now is in a sense a sort of grand plan in which Germany is prepared to commit its economy fully to the single currency.
"That means treating the debts of one as the debts of all, which is very hard for Germany to do.
"It means the other countries in the eurozone need to reform, need precise credible programmes of change to reform so that Europe can regain its competitiveness.
"Otherwise it is quite unfair to ask Germany to pay."
Blair refused to accept that the single currency's troubles meant the UK would never join.
"If they sort it all out and Europe moves forward again then Britain is going to have a very interesting choice to make," he said.
He said he had never disagreed with Gordon Brown on the economics ofeuro membership - despite claims that the then-chancellor was responsible for blocking the UK's entry.
"I always took the view that economically you had to make an unambiguous case for Britain joining," he said. "Politically however, I was always in favour of keeping us very positive towards the project of European integration, and able to join at any time we wanted to do so."
Blair said the "broad sweep of history" showed that European integration would continue regardless of the fate of the eurozone. Britain needed to protect its alliance with the EU in order to exercise influence, he added.
He also appeared to hint that he would be interested in the role of EU president in the future.
"I have always said I am a public service person first. I would have been happy to carry on as prime minister, I would have been happy taking the European job as president of the EU," he said.
and.....
http://www.ekathimerini.com/4dcgi/_w_articles_wsite1_1_24/06/2012_448706
Schaeuble urges Greece to apply program, not ask for concessions
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Schaeuble told Bild am Sonntag in unusually blunt language that Greece has forfeited much of Europe's trust during the sovereign debt crisis, as reflected in an opinion poll covering the euro zone's four biggest nations and published in the paper.
"The most important task facing new prime minister (Antonis) Samaras is to enact the program agreed upon quickly and without further delay instead of asking how much more others can do for Greece,» said Schaeuble, a close ally of Chancellor Angela Merkel and Europe's most powerful finance minister.
Greece's new three-party coalition government said on Thursday it would renegotiate the terms of the 130-billion-euro bailout deal that is helping the country avoid bankruptcy.
The coalition's platform particularly challenges euro zone paymaster Germany, which has offered to adjust the lifeline's terms to make up for time lost as a result of two Greek elections since May, but refuses to revise it radically.
Greece wants a two-year extension to the 2014 deadline for it to cut its budget deficit to 2.1 percent of national economic output, from 9.3 percent in 2011. The extension would require an extra 16 to 20 billion euros in foreign funding.
"The ball is now in Greece's court,» said Schaeuble. «It's in their hands to win back the confidence of the people of Europe. They're only going to accomplish that with concrete actions and deeds."
The poll of 4,000 people in Germany, France, Spain and Italy showed 78 percent of Germans and 65 percent of French people wanted Greece to leave the euro zone, with 51 percent in Spain and 49 percent in Italy also backing a Greek exit.
Big majorities in all four countries, which have a combined population of 254 million, did not expect that Greece would ever repay its bailout loans.
The poll, conducted by the Ifop Institute for Bild am Sonntag and leading newspapers in France, Spain and Italy, showed only small minorities in the four states want to scrap the euro and return to their respective national currencies.
"The poll shows two things,» Schaeuble said. «An overwhelming majority want the euro ...and secondly it shows how much trust Greece has forfeited among Europeans."
In a separate interview on Sunday published in Der Spiegel news magazine, Schaeuble again ruled out any form of collectivized debt such as euro bonds and defended the German government's hard line on that.
"It's because you cannot separate the responsibility for decision-making from the liability,» he said when asked why Germany was so adamantly opposed. «That's true for almost everything but especially when it comes to money.
"Anyone who has the chance to spend someone else's money will do that,» he added, before telling the reporter: «You'd do that and so would I. The markets know that. And so from that point of view they wouldn't be convinced by euro bonds."
The poll, conducted by the Ifop Institute for Bild am Sonntag and leading newspapers in France, Spain and Italy, showed only small minorities in the four states want to scrap the euro and return to their respective national currencies.
"The poll shows two things,» Schaeuble said. «An overwhelming majority want the euro ...and secondly it shows how much trust Greece has forfeited among Europeans."
In a separate interview on Sunday published in Der Spiegel news magazine, Schaeuble again ruled out any form of collectivized debt such as euro bonds and defended the German government's hard line on that.
"It's because you cannot separate the responsibility for decision-making from the liability,» he said when asked why Germany was so adamantly opposed. «That's true for almost everything but especially when it comes to money.
"Anyone who has the chance to spend someone else's money will do that,» he added, before telling the reporter: «You'd do that and so would I. The markets know that. And so from that point of view they wouldn't be convinced by euro bonds."
and......
Samaras, Rapanos to miss EU summit as troika delays visit
Government spokesman Simos Kedikoglou issued a statement saying that Samaras was under strict orders from his doctors not to travel to the two-day summit, which starts on Thursday, after undergoing eye surgery for a detached retina on Saturday. Would-be Finance Minister Vassilis Rapanos remains in hospital after feeling faint on Friday and complaining of stomach pains. Doctors are continuing tests on the outgoing National Bank president, who is expected to be discharged from hospital on Monday afternoon or Tuesday morning. "The orders of his doctor are for him not to travel and to stay at home for a few days,» said Kedikoglou. The hospital said his condition was «good and improving." Kedikoglou added that Greece would be represented at the EU summit by Foreign Minister Dimitris Avramopoulos. He will be joined by outgoing Finance Minister Giorgos Zanias, Alternate Finance Minister Christos Staikouras and Development Minister Costis Hatzidakis. A government official, who spoke to Reuters on condition of anonymity, said inspectors from Greece's «troika» of lenders - the EU, European Central Bank and International Monetary Fund - were considering postponing «for a few days» a visit to Athens that was due to start on Monday. The coalition government unveiled on Saturday the main points of Greece’s bailout program that it would like to renegotiate with the troika. Athens will seek tax cuts, extra help for the poor and unemployed, a freeze on public sector lay-offs and two more years to cut its deficit.
and.....
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