Andrew Bosomworth, head of Pimco's portfolio management in Europe, said current policies are untenable in the absence of fiscal union and will lead to a break-up of the euro. "Greece, Ireland and Portugal cannot get back on their feet without either their own currency or large transfer payments," he told German newspaper Die Welt. He said these countries could rejoin EMU "after an appropriate debt restructuring", adding that devaluation would let them export their way back to health. Mr Bosomworth said EU leaders were too quick to congratulate themselves on saving the euro last week with a deal for a permanent bail-out fund from 2013. "The euro crisis is not over by a long shot. Market tensions will continue into 2011. The mechanism comes far too late," he said. The bond fund argues that the EU strategy of forcing heavily indebted countries to undergo draconian fiscal austerity without offsetting stimulus is unworkable. The austerity policies are stifling the growth needed to stabilise debt levels.Pimco also gave warning that the bond vigilantes have lost faith in the policy and are trying to liquidate their holdings of peripheral EMU faster than the European Central Bank (ECB) can buy the debt, causing a relentless rise in yields, and a vicious circle. Despite this, the ECB said on Monday that it had cut purchases of government debt last week, settling €603m (£509m), down from €2.68bn a week earlier. The withering comments from the world's top investor in EMU sovereign debt is a blow for Portugal and Spain. Both nations are hoping bond spreads will start to narrow before they face a funding crunch in the first quarter of next year. Jacques Cailloux, chief Europe economist at RBS, agreed that last week's European summit had failed to grasp the nettle.Jacques Cailloux, chief Europe economist at RBS, agreed that last week's European summit had failed to grasp the nettle. "None of the policy responses put in place in Europe since the start of the crisis provides a credible backstop to prevent further contagion," Mr Cailloux said.BCE, Citigroup, Agerpres, Mediafax, PIB, Rusia, SUA, Spania, Federal Reserve, Germania, Grecia, Irlanda, Marea Britanie-euro, criza datoriilor de stat, euroscepticismul, monede nationale, renuntarea la euro, salvare euro, zona euro
2 comments:
GOOD DECISION IN THE U.K.
Small businesses stand to benefit from the planned abolishment of rules that protected public sector staff when their jobs are moved to the private sector, according to a law firm.
EMW said the Government’s plan to scrap of the ‘two-tier’ code, announced earlier this week, would give “small companies a new competitive edge” and would lead to more of them bidding for public sector work.
The code, introduced in 2003, ensured that the pay and conditions of new staff hired by private companies who take over public-sector contracts would be comparable with those received by the former public sector staff they work alongside.
Jon Taylor, head of employment at EMW, the commercial law firm said: “The two-tier code was a major disincentive for smaller businesses to bid for Government contracts.
“It restricted their ability to deliver services as cost-effectively as possible. This was not just because of increased staff costs but also because it made it harder for them to improve productivity.”
Allied Irish fined €2m for overcharging customers
Allied Irish Banks has been fined €2m for overcharging customers, the Central Bank has confirmed.
I can't repay Anglo €86.5m -- broke developer
By Dearbhail McDonald Legal Editor
A DEVELOPER who claimed he had easy access to senior figures at Anglo Irish Bank last night revealed he is broke and cannot repay €86.5m he owes to the lender.
Former Anglo chiefs forced to come clean
NAMA claws back €130m 'put away' by developers
By Laura Noonan
NAMA has clawed back more than €130m of assets from three developers who tried to put them beyond the agency's reach, new figures revealed last night.
Pimco says 'untenable' policies will lead to euro break-up
By Ambrose Evans-Pritchard in London
Pimco, the world's largest bond fund, has called on Greece, Ireland and Portugal to step outside the eurozone temporarily and restructure their debts unless the currency bloc agrees to a radical change of course.
Britain slumps to borrowing record
Britain slumped into the red by a higher-than-expected £23.3bn in November - the highest monthly borrowing figure since records began, official figures revealed today.
EU regulators clear News Corp bid for BSkyB
Moves by Rupert Murdoch's News Corporation to take control of BSkyB cleared a key hurdle today following approval from European regulators.
EBS arm to hike mortgage rates just two days before Christmas
By Charlie Weston Personal Finance Editor
STATE-owned EBS Building Society played Scrooge yesterday when it admitted its subsidiary would hike mortgage rates for new customers with the new rate to take effect just 48 hours before Christmas Day.
Post a Comment