G8 - David Cameron has issued an ultimatum to the Greek people to accept
austerity or leave the eurozone. The UK Prime Minister insisted failure to
provide clarity could prove disastrous for the world economy, and told the Greek
people that fresh elections must decide once and for all whether the country
stays in the eurozone. The message came as his Cabinet colleague Ken Clarke said
the European banking system was already "in tatters". Mr Clarke warned that
Britain was "heavily exposed" to potential problems and could be among the next
targets for market speculation. Deputy Prime Minister Nick Clegg also
criticized the lack of leadership on the eurozone crisis, raising fears of a
rise in extremism and civil unrest unless it was addressed. Mr Cameron, in
America for back-to-back G8 and Nato summits, said talks with fellow world
leaders had "crystallized" the problems.... Justice Secretary Mr Clarke, a
former chancellor, said Greek voters had to "face up to reality". "These are
hardships inflicted on them by the irresponsibility of their former
politicians," he said. "But they cannot just vote for saying, 'could people
just carry on giving us some money so we do not have to change anything'." Mr
Clarke said the consequences would be "serious" if the Greek people elected
"cranky extremists" and defaulted on their debts as a result. "No-one knows
exactly what will happen in the rest of Europe. But the banking system is in
tatters, it is weak in very many places," he went on. "We don't know what the
knock on effects would be, they could be very serious and of course people will
start barking at the door of Portugal, Ireland, Italy and here in Britain. "Our
banks are heavily exposed to some of these countries, we have overcapitalized
them so far... "I obviously hope the Greeks will vote responsibly and that we
can avoid turmoil."
Access Investments-Building Awareness - European Union-ROMANIA
Monday, May 21, 2012
G8 - David Cameron has issued an ultimatum to the Greek people to accept
austerity or leave the eurozone. The UK Prime Minister insisted failure to
provide clarity could prove disastrous for the world economy, and told the Greek
people that fresh elections must decide once and for all whether the country
stays in the eurozone. The message came as his Cabinet colleague Ken Clarke said
the European banking system was already "in tatters". Mr Clarke warned that
Britain was "heavily exposed" to potential problems and could be among the next
targets for market speculation. Deputy Prime Minister Nick Clegg also
criticized the lack of leadership on the eurozone crisis, raising fears of a
rise in extremism and civil unrest unless it was addressed. Mr Cameron, in
America for back-to-back G8 and Nato summits, said talks with fellow world
leaders had "crystallized" the problems.... Justice Secretary Mr Clarke, a
former chancellor, said Greek voters had to "face up to reality". "These are
hardships inflicted on them by the irresponsibility of their former
politicians," he said. "But they cannot just vote for saying, 'could people
just carry on giving us some money so we do not have to change anything'." Mr
Clarke said the consequences would be "serious" if the Greek people elected
"cranky extremists" and defaulted on their debts as a result. "No-one knows
exactly what will happen in the rest of Europe. But the banking system is in
tatters, it is weak in very many places," he went on. "We don't know what the
knock on effects would be, they could be very serious and of course people will
start barking at the door of Portugal, Ireland, Italy and here in Britain. "Our
banks are heavily exposed to some of these countries, we have overcapitalized
them so far... "I obviously hope the Greeks will vote responsibly and that we
can avoid turmoil."
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British banks are ready for Greece," Cohrs said. "They have thought about their direct exposures to Greece and they have marked them to appropriate levels, their liquidity is strong and they have enough capital to withstand shocks from Greece. If it goes further it's not clear, and that is why we have been encouraging them to raise more capital because nobody knows where it will stop or it won't stop."
A senior banker at Deutsche Bank during the 2008 crisis, Cohrs said the FPC had met within the last week to discuss, among other matters, the eurozone, which the Bank's governor, Sir Mervyn King, said last week was "tearing itself apart".
An American resident in Britain for 25 years with dual nationality, Cohrs said scenarios being tested fell short of a break up of the euro area. In December the FPC issued a demand for banks to raise fresh capital and in March to step up their efforts to "ensure resilience in the fact of prospective risks".
British banks are ready for Greece," Cohrs said. "They have thought about their direct exposures to Greece and they have marked them to appropriate levels, their liquidity is strong and they have enough capital to withstand shocks from Greece. If it goes further it's not clear, and that is why we have been encouraging them to raise more capital because nobody knows where it will stop or it won't stop."
A senior banker at Deutsche Bank during the 2008 crisis, Cohrs said the FPC had met within the last week to discuss, among other matters, the eurozone, which the Bank's governor, Sir Mervyn King, said last week was "tearing itself apart".
An American resident in Britain for 25 years with dual nationality, Cohrs said scenarios being tested fell short of a break up of the euro area. In December the FPC issued a demand for banks to raise fresh capital and in March to step up their efforts to "ensure resilience in the fact of prospective risks".
TOP OF THE AGENDA
David Cameron has used the Nato meeting in Chicago to talk about his views on the future of the euro and the Greek elections next month. The election represent a referendum on Greek membership of the single currency, Dave is saying in a not so veiled warning to Greek voters. Nick Clegg isn't missing out on airing his views. He's been telling the Germans, via an article in one of their national newspapers, about their responsibilities concerning the euro. Add to this George Osborne's talk over the weekend about rich European countries helping out their poorer neighbours and it looks like we have political consensus from the Coalition. What the Germans think about all this remains to be seen.
From consensus to cracks – and deep ones. As The Sunday Telegraph revealed this weekend the Government is minded to adopt a number of proposals in the Beecroft report expected to be published this week. These include relaxing rules around consultations on redundancies, cutting red tape on the treatment of employees during takeovers and making it easier to sack underperforming employees. It's reported Vince Cable has already weighed into the debate, branding the proposals “bonkers”.
Almost a fifth of us are failing to save anything towards their retirement according to Scottish Widows. While those of us who are saving have “unrealistic expectations” of our wealth in retirement.
Forget the idea that Europe's policymakers are better prepared this time than they were back then. Take with a pinch of salt the idea that they have a big enough war chest to cope with the consequences of a Greek exit from the single currency. The much-vaunted firewall is a Maginot line.
Events have moved quickly since the French and Greek elections a fortnight ago. Greek departure from the eurozone is now pretty much priced in by the markets, with the focus of attention on how bad the collateral damage will be. Expect the worst. Last week, pressure was mounting on Spain and its troubled banks. The idea that the European leaders who have been like rabbits in the headlight for the past two years can mastermind a clean break for Greece is utterly fanciful. The crisis will be messy, painful, prolonged and probably terminal.
Even now, there is a failure or an unwillingness to grasp a basic truth about the single currency: it doesn't work. Monetary unions only succeed if there is economic flexibility, financial solidarity and cultural homogeneity. If those three factors are in place, as they are in the United States, there is a chance that a common interest rate and a single currency can encourage economic convergence, up to a point. Europe's problem is that it has none of these things. Countries such as Greece cannot become German overnight. The European Union lacks the resources to help poorer nations adjust. Most crucially of all, the crisis has exposed the fact there is no sense of common purpose beyond a desire to ensure the "project" continues.
The survival plan, such as it is, involves countries embarking on a long process of structural reform to make them more competitive, a fiscal pact to ensure that governments live within their means, and perhaps a bit of extra pan-European infrastructure spending to satisfy voter demands to soften the impact of austerity
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