Economy European Monetary Fund

edao

edao

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Do you think the creation of the EMF a good idea?

"The difficulties facing Greece and other European borrowers expose two big failures of discipline at the heart of the euro zone. The first is a failure to encourage member governments to maintain control of their finances. The second, and more overlooked, is a failure to allow for an orderly sovereign default. To address these issues, we propose a new euro-area institution, which we dub the European Monetary Fund (EMF)."

http://www.economist.com/blogs/freeexchange/2010/02/emf_roundtable

"Prime Minister George A. Papandreou of Greece reiterated Monday in Washington that he would not rule out turning to the International Monetary Fund for help. But he also said the concept of a European fund had merit. “The more there is a European solution to a theoretical, but possible, problem in the markets, the less we will have to talk about an I.M.F. solution,” he said."
 
Yes, but with one proviso.

That there should first be a United States of Europe with a Federal Government established that had full tax setting powers.

Unless such a thing is set in place European Monetary Fund would be nothing more than an open wallet from which dishonest states would help themselves.
 
I agree with Gwyllgi. You must have greater political union in the E.U. with Federal Government decision making powers on critical social and economic issues, before a European Monetary Fund (EMF) structure can be established. Without it, an EMF mechanism would lack the necessary efficiencies to work properly.
 
I do believe that if Papandreou does turn to the IMF there is a damm good case to ejecting Greece from the EU.

Maybe it’s time that such a thing was done.

In part because what he’s really doing is tantamount to blackmail, in part because Greece was granted accession on what are now admitted to having been fraudulent accounts, and in part to quote from Voltaire's 'Candide “Pour encourager les autres”.
 
Gwyllgi said:
I do believe that if Papandreou does turn to the IMF there is a damm good case to ejecting Greece from the EU.

Maybe it’s time that such a thing was done.

In part because what he’s really doing is tantamount to blackmail, in part because Greece was granted accession on what are now admitted to having been fraudulent accounts, and in part to quote from Voltaire's 'Candide “Pour encourager les autres”.
Click to expand...

No question, Greece entered the Eurozone through fraudulent means and then, essentially, "cooked the books" to present their financial situation in a better light. It will be exceedingly difficult for Greece to reestablish any level of trust with the rest of the E.U. Time will tell...
 
Fork in the road?

"An emergency summit of the 16 leaders of the countries using the single currency was held in Brussels, with chancellor Angela Merkel of Germany and president Nicolas Sarkozy of France demanding tougher and quicker regulation of the financial markets in what looked like a doomed attempt to contain contagion from the Greek drama.
With the pace of developments outstripping the ability of political leaders to respond, what was initially called as a summit to bless a €110bn (£95bn) rescue package for Greece turned into a frantic exercise in global crisis management." source



Is this summit to be a turning point for the EU, it seems unlikely that the current model can continue, the hand of the politicans are being forced by the markets. This sums up my view on the situation:


"At some stage, the euro area would have had to come to a fork in the decision-making road. This may be that fork. The euro area needs to decide whether it wants political union. The nations which accept a political union will have to go down one route – and those that don't will have to leave the euro.

History shows that monetary unions of large sovereign nations cannot survive unless they become a political union. Monetary union requires labour mobility and fiscal flexibility in the form of a single treasury. Rich regions need to bail out poor areas when needed. This is easier to implement if they are part of the same country and much harder to justify across a monetary union.

The basic problem with the euro was that one interest rate does not suit all the countries. In economic jargon, the euro is not an "optimal currency area". In other terms, the economies are so different they need their own interest rates. One size does not fit all." source


It seems the measures being imposed on Greece are unrealistic, yet for greece to fail is for Europe to fail.
 
edao said:
"An emergency summit of the 16 leaders of the countries using the single currency was held in Brussels, with chancellor Angela Merkel of Germany and president Nicolas Sarkozy of France demanding tougher and quicker regulation of the financial markets in what looked like a doomed attempt to contain contagion from the Greek drama.
With the pace of developments outstripping the ability of political leaders to respond, what was initially called as a summit to bless a €110bn (£95bn) rescue package for Greece turned into a frantic exercise in global crisis management." source



Is this summit to be a turning point for the EU, it seems unlikely that the current model can continue, the hand of the politicans are being forced by the markets. This sums up my view on the situation:


"At some stage, the euro area would have had to come to a fork in the decision-making road. This may be that fork. The euro area needs to decide whether it wants political union. The nations which accept a political union will have to go down one route – and those that don't will have to leave the euro.

History shows that monetary unions of large sovereign nations cannot survive unless they become a political union. Monetary union requires labour mobility and fiscal flexibility in the form of a single treasury. Rich regions need to bail out poor areas when needed. This is easier to implement if they are part of the same country and much harder to justify across a monetary union.

The basic problem with the euro was that one interest rate does not suit all the countries. In economic jargon, the euro is not an "optimal currency area". In other terms, the economies are so different they need their own interest rates. One size does not fit all." source


It seems the measures being imposed on Greece are unrealistic, yet for greece to fail is for Europe to fail.
Click to expand...

This is a watershed moment for the Eurozone and the EU. Perhaps now people will understand why greater EU federalization of economic affairs is critically necessary.
 
I thought there was no problem in the Eurozone?

I said it's a house of cards. I expect a rally in the euro to 1.35, based on recent price action (euro touching 1.25), and potential "bailout" solution, which, obviously, won't work. The eurozone is ******. The eur/usd will be at .80 by the end of the year. The eurozone will subsequently collapse.

It was a good try. The people do not like each other. And Germans yelling at Greeks? Let me see Germans in the streets burning banks. I doubt it ever happens. I have more respect for Greeks than any Germans - at least they don't sit idle as they're financially mutilated.
 
With Germany being the 2nd biggest exporter in the world, euro going down compared to usd is a good thing for them. Now they can export even more as the prices for their products are lower for Americans, while at the same time american exports are dropping since it's more expensive for Europeans to buy american products.

As for the EMF solution I think it's a very good idea as long as there is a federal government in EU.

Greece has already accepted the "help" from EU and the IMF, and when it was announced that a plan is being proposed in the EU to help countries that will have economical problems in the future our president said that in such a case Greece will demand a change in the terms of our bailout since it is unfair for Greece to money from the IMF also.
 
It's pretty obvious there's a systemic attack on the Euro by American "interests". I see Greece PM is contemplating some form of legal action.
 
Allocation of the EU budget

43.7bn Euros Common Agricultural Policy
Aid for famers around the EU

42.5bn Euros Cohesion
Funding for countries and regions that are economically
lagging behind other member states.

14.5bn Euros Rural Development
Helps to diversify economic activities in rural areas.

12.1bn Euros Competitiveness
Supports research and development.

8.3bn Euros Administration

7.5 bn Euros Foreign aid and development

1.5bn Euros Security and Justice

Source

These figures shocked me, I don't understand why there is all this funding for rural areas and farmers totalling 58.2 billion Euros. If you are living in London, Lisbon, Madrid, Paris, Milan, Berlin or Brussels you would never see that money even though that is where most of the tax weath is produced in the industral urban cities. Why are European Farmers and rural communities being spoon fed?
 
It always baffled me too.
Farmers, almost traditionally in second half of 20th century, were subsidized by governments. So on top of this 58 billion the farmers are getting more billions from their countries taxpayers. This is wrong, and farmers should be treated as any other business. If they are not profitable they should close, or change profile. The subsidies always kill entrepreneurial spirit and make people lazy. It looks like farmers have strong lobby and can press society into giving them the money.
This 58 billion should be invested in research and development, as I'm concerned.
 
LeBrok said:
It always baffled me too.
Farmers, almost traditionally in second half of 20th century, were subsidized by governments. So on top of this 58 billion the farmers are getting more billions from their countries taxpayers. This is wrong, and farmers should be treated as any other business. If they are not profitable they should close, or change profile. The subsidies always kill entrepreneurial spirit and make people lazy. It looks like farmers have strong lobby and can press society into giving them the money.
This 58 billion should be invested in research and development, as I'm concerned.
Click to expand...

I completely agree. I think one major issue here are the role of supermarkets in western society they have a ridiculous monopoly on the route to market for too many producers. I have noticed now there are mostly supermarket own brand on shelves, there is every year less and less shelf space for other companies goods.

They repackages their own pizzas in three different boxes varying the content slightly and putting differnet prices depending on the design of the packaging. Since recession I have only seen prices rise and all you hear are farm after farm going out of business, these people are not seeing any of that price rise. Instead the supermarket are squeezing their producer demanding lower and lower prices. There is alot of talk in the UK about super farms with literally thousands of cows in sheds who never see a field in their life. This seem to be an american idea which seems now inevitable as a way forward mearly to put more profit in the supermarkets pockets, I doubt it will lead to cheaper milk for the consumer.

This has to be a area for the EU to regulate, competition laws should apply here, these huge supermarkets hold unequal power over who get to sell at what price, greater transparency about the producer and greater brand freedom have to be enforced.
 
Eurozone 'agrees in principle' on policy co-ordination

"A pact would give members a say over each other's major economic policies - a move aimed at keeping countries under firm fiscal discipline."
article on EU summit

That sounds an awful lot like one step closer to Federal Europe?
 
Portugal bail-out looms as government nears collapse

_51796039_portugal.jpg


I have seen constant news articles in papers in the UK claiming Portugal will be bailed out in a matter of days. This has been constant since the start of January, 3 months later I don't know what to believe.

Is anyone better informed on the situation in Portugal? It is commonly accepted to be the poorest country in western Europe, if people in France and UK are kicking up a fuss about having to tighten their belts I can't imagine what the situation must be like there?

"Portugal's opposition parties have withdrawn their support for austerity policies that may lead to the Lisbon government's collapse on Wednesday." source
 
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