Roubini: The condition of the over-indebted states on the periphery of the euro area is similar to that of the US federal states, from California to Illinois. But there are also clear differences: Even if California were to go bankrupt, nobody would think that the US monetary union would collapse because of this. The debt problems that Greece and Ireland are currently experiencing, could, in contrast, actually lead to a collapse of the euro area. What's more, the US can always finance its debt by printing more money. Greece and Ireland are dependent on the European Central Bank, the ECB, to relax its monetary policy against the will of Germany. There is simply more discordance than agreement in the euro area. SPIEGEL: Americans and Germans differ widely in their views on how to make the economy pick up again. The US is trying to boost the economy with tax cuts and by having the Fed buy government bonds, while Germany wants to stringently cut expenditures.
Roubini: The cost-cutting measures, the ECB's tight monetary policy, the current high value of the euro -- that's all fine for Germany and the heart of the EU. But what's good for Germany is by no measure good for the countries on the periphery of the EU. The economic output of Greece, Ireland and Spain is shrinking, and there is hardly any growth in Portugal and Italy. To get these countries back on track for recovery the ECB should do what the Fed is doing and increase the money in circulation to stimulate growth.
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The European Parliament has adopted by a large majority a First Reading Agreement with the Council on the European Energy Recovery Plan. The funds will be available from January 2011.
The European Parliament approved today the Report on the allocation of the remaining funds of the European Energy Recovery Plan whose goal is to finance projects in energy efficiency and renewable energy sources through loans, guarantees and equity in several areas of action. Antonio Cancian MEP is Shadow Rapporteur on this Report for the EPP Group.
"The Parliament, which today approved the text agreed with the Council, is contributing to the European economic recovery in the energy sector with an innovative investment instrument that is not limited to the financing of projects. It also provides that each single project, as soon as the break-even point is achieved, will be able to ensure profitability by returning the financed amount back to the fund", said Antonio Cancian MEP.
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