Schauble supports a European government,which clearly means that Merkel does too. Both of them know well that such a government will be dominated by the Germans, know the the Krauts will have the major voice in policy decisions.The notion that voters in E.U. states might not care for sovereignty losses, in effect to Germans seems to be of little concern to them and to to Trichet. Recently Merkel called for 'More Europe' with sovereignty surrenders, an echo of what a former Chancellor Gerhard Schroeder called for last year a United States Of Europe.To repeat ,any USE would be German dominated so in effect what Merkel , Schauble,Schroeder want is a United States Of Germany,which would give Merkel much more scope for her arrogance and meddling in the internal matters of other states, like telling voters in France to back Sarkozy..Where will she next meddle will she try in in the UK in 2014, imagine the vitriolic reaction, I would love it? Last year Merkel told David Cameron to accept a financial transactions tax,it is not for any German to tell a British P.M. even one as weak as Cameron what to do. It is I think inevitable that in the U.K. an E.U. referendum is inevitable despite the lying reasons from Cameron, Clegg, Milliband for not holding one,I want to cast my vote.If eurosceptism continues to grow such a vote might be to leave the E.U.,I have a feeling that in many E.U. members such a result would be welcome.... For starters, the Stability and Growth Pact (SGP), intended to ensure sound fiscal policies in the eurozone, was never correctly implemented. On the contrary, in 2003 and 2004, France, Italy and Germany sought to weaken it. The European commission, the European Central Bank and the small and medium-sized eurozone countries prevented the SGP from being dismantled, but its spirit was gravely compromised. Moreover, eurozone governance did not include monitoring and surveillance of competitiveness indicators – trends in nominal prices and costs in member states, and countries' external imbalances within the eurozone. (In 2005, long before the crisis, I called, on behalf of the ECB's governing council, for appropriate surveillance of a number of national indicators, including unit labour costs). A third source of weakness is that no crisis-management tools were envisaged at the euro's launch. For much of the world at the time, "benign neglect" was the order of the day, particularly in the advanced economies. Finally, the high correlation between the creditworthiness of a particular country's commercial banks and that of its government creates an additional source of vulnerability, which is particularly damaging in the eurozone.
Access Investments-Building Awareness - European Union-ROMANIA
Sunday, September 9, 2012
Schauble supports a European government,which clearly means that Merkel does too. Both of them know well that such a government will be dominated by the Germans, know the the Krauts will have the major voice in policy decisions.The notion that voters in E.U. states might not care for sovereignty losses, in effect to Germans seems to be of little concern to them and to to Trichet. Recently Merkel called for 'More Europe' with sovereignty surrenders, an echo of what a former Chancellor Gerhard Schroeder called for last year a United States Of Europe.To repeat ,any USE would be German dominated so in effect what Merkel , Schauble,Schroeder want is a United States Of Germany,which would give Merkel much more scope for her arrogance and meddling in the internal matters of other states, like telling voters in France to back Sarkozy..Where will she next meddle will she try in in the UK in 2014, imagine the vitriolic reaction, I would love it? Last year Merkel told David Cameron to accept a financial transactions tax,it is not for any German to tell a British P.M. even one as weak as Cameron what to do. It is I think inevitable that in the U.K. an E.U. referendum is inevitable despite the lying reasons from Cameron, Clegg, Milliband for not holding one,I want to cast my vote.If eurosceptism continues to grow such a vote might be to leave the E.U.,I have a feeling that in many E.U. members such a result would be welcome.... For starters, the Stability and Growth Pact (SGP), intended to ensure sound fiscal policies in the eurozone, was never correctly implemented. On the contrary, in 2003 and 2004, France, Italy and Germany sought to weaken it. The European commission, the European Central Bank and the small and medium-sized eurozone countries prevented the SGP from being dismantled, but its spirit was gravely compromised. Moreover, eurozone governance did not include monitoring and surveillance of competitiveness indicators – trends in nominal prices and costs in member states, and countries' external imbalances within the eurozone. (In 2005, long before the crisis, I called, on behalf of the ECB's governing council, for appropriate surveillance of a number of national indicators, including unit labour costs). A third source of weakness is that no crisis-management tools were envisaged at the euro's launch. For much of the world at the time, "benign neglect" was the order of the day, particularly in the advanced economies. Finally, the high correlation between the creditworthiness of a particular country's commercial banks and that of its government creates an additional source of vulnerability, which is particularly damaging in the eurozone.
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3 comments:
Germany is standing in the way and have become the problem to over come and not the solution.
Further delays and uncertainty in the Euro zone is not acceptable and is putting all investment and job creation in limbo
Of course it is better to have Germany in the Euro but not at the cost of the uncertainties of not having a proper central bank.
Germany in and with non central bank, is not better than Greece in with a Central bank .
The other 16 countries including France have a enough fire power and assets to underpin the Euro with a proper central bank .
This would not be ideal but the big loser would be Germany , if reverted to the DM, the DM would soar temporally in value and suck in imports from surrounding countries . Germany exports would be hit and unemployment would rise .
Meanwhile the Euro would devalue and boost its exports , Germany leaving the Euro does have certain pluses for the Euro zone . Germany is in no position to bargain over the central bank !
Germany left - or is "guided" out, as Soros proposes - the other AAA countries like Finnland, Netherlands, Austria,... would leave instantly as well. The Finns will make the start. They will not like to be left with the bill, especially as it has then grown 27% bigger.
That would leave France as THE big guarantor of everything, so to say taking over Germanys "pilot"-seat. IMHO Chances are that of a snowball in hell, that the French would accept that role, so France would leave as well. Especially since the initial French intention with the Euro was to weaken Germany and its dreaded Bundesbank by tying it to weaker economies, the more of them the better. With this option gone, what would be the point?
So the troubled countries GIPSI could form the Euro zone? With what kind of average credit rating for their new Euro-Bonds?
No, if Germany leaves, shortly after that, the Euro ceases to exist. It might possibly come to the founding of a "North-Euro" or Thaler or whatever, starting with a cluster of the former AAA ex-Euro countries. That could possibly work, as long as France is kept out.
The Germans threw their toys out of the pram after Draghi's announcement, making clear they thought the blueprint could be costly for European – aka German – taxpayers. The Bundesbank's Jens Weidmann was a lone voice at the ECB council meeting and Draghi now has the authority to act. Make no mistake, the ECB has very deep pockets.
Immediate action is out of the question. The ECB will only move when countries have signed up to their structural adjustment programmes, and that will take time. When the bond buying begins, the ECB will remove money from elsewhere in the system to ensure there is no increase in money supply. This process, known as sterilisation, is a small victory for the Bundesbank.
Markets worried that Draghi would deliver less than he has been promising. That he lived up to expectations meant the financial markets rallied, but even before Draghi had finished speaking analysts were expressing doubts both about the mechanics of the plan and the logic behind the strategy.
The ECB's president brushed aside questions at his press conference about what he would do if Spain, for example, signed up to "strict and effective" conditions to trigger bond buying but then decided the conditions were too difficult to implement. In those circumstances, would the ECB really start selling Spanish bonds at a heavy loss? Gary Jenkins of Swordfish Research said this would be like the ECB putting a gun to its own head and pulling the trigger.
A bigger problem is the economic thinking behind the plan. The Organisation for Economic Cooperation and Development in Paris said on Thursday that Italy's economy will shrink by 2.4% this year. In Spain youth unemployment is more than 50%, the banks are tottering under the weight of bad debts from a bombed-out housing market, and private capital is leaving the country at an alarming rate. Greece's economy is 20% smaller than it was four years ago.
Put simply, Greece is in depression, Spain on the brink and Italy heading that way.
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