The EU and ECB do much talking but do little in the way of action, meanwhile people continue to suffer in Cyprus, Greece, Portugal, Spain, Ireland. The EU/ECB are 5 years behind US and UK and 2 years behind Japan.The crisis has left Europe with three distinct problems: shaky public finances, crippling long-term unemployment, and limping banks. This summer’s news suggests they are coalescing to form Japanese-style vicious circle. The bond market turmoil was fixed by a dramatic intervention by the European Central Bank (ECB) in summer 2012. Interests rates for the most vulnerable economies – Portugal, Italy, Ireland, Greece, Spain – are down to historic lows; too low, a pessimist might argue. But the price that Germany exacted for ECB president Mario Draghi’s rescue was exorbitant: Europe-wide acceptance of a punishing austerity agenda. Even in Germany itself, where the federal government has reached fiscal balance, the pressure is now on its states, the Länder, which are struggling to balance their books by 2018. Austerity proponents such as finance minister Wolfgang Schäuble insist that squeezing public expenditure will free up private investment. But Europe’s banks, with Deutsche Bank very much in the lead, remain in a state of shell shock. Whereas the US and the UK have moved rapidly to put in place new, confidence-boosting regulation, Germany has been dragging its feet over a European banking union. As the summer ends, the sense of impasse is inescapable. Germany cannot truly prosper without a growing Europe. Europe cannot prosper without exporting to a buoyant German economy. But with the Christian Democrats in charge of German fiscal policy, is there any hope of change?
Access Investments-Building Awareness - European Union-ROMANIA
Friday, August 22, 2014
The EU and ECB do much talking but do little in the way of action, meanwhile people continue to suffer in Cyprus, Greece, Portugal, Spain, Ireland. The EU/ECB are 5 years behind US and UK and 2 years behind Japan.The crisis has left Europe with three distinct problems: shaky public finances, crippling long-term unemployment, and limping banks. This summer’s news suggests they are coalescing to form Japanese-style vicious circle. The bond market turmoil was fixed by a dramatic intervention by the European Central Bank (ECB) in summer 2012. Interests rates for the most vulnerable economies – Portugal, Italy, Ireland, Greece, Spain – are down to historic lows; too low, a pessimist might argue. But the price that Germany exacted for ECB president Mario Draghi’s rescue was exorbitant: Europe-wide acceptance of a punishing austerity agenda. Even in Germany itself, where the federal government has reached fiscal balance, the pressure is now on its states, the Länder, which are struggling to balance their books by 2018. Austerity proponents such as finance minister Wolfgang Schäuble insist that squeezing public expenditure will free up private investment. But Europe’s banks, with Deutsche Bank very much in the lead, remain in a state of shell shock. Whereas the US and the UK have moved rapidly to put in place new, confidence-boosting regulation, Germany has been dragging its feet over a European banking union. As the summer ends, the sense of impasse is inescapable. Germany cannot truly prosper without a growing Europe. Europe cannot prosper without exporting to a buoyant German economy. But with the Christian Democrats in charge of German fiscal policy, is there any hope of change?
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