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Posts tagged ‘European sovereign debt crisis’

Is The ECB Implementing ZIRP or ZEURP: Zero European Union Return on Potential

By Reggie Middleton

I’ve been very bearish on the EU and their banks and sovereign debt in particular, since Q! 2010 – way before most – reference Pan-European sovereign debt crisis. Yesterday morning if you were to Google the term EU recovery, you would see something like this in return…

Well, somebody better tell Draghi, as per Bloomberg: ECB Cuts Key Rate to Record Low to Fight Deflation Threat

The European Central Bank cut its benchmark interest rate to a record low after a drop in inflation to the slowest pace in four years threatened its mission to keep prices stable.

Policy makers meeting in Frankfurt today reduced the main refinancing rate by a quarter point to 0.25 percent. The decision was predicted by three of 70 economists in a Bloomberg News survey. The ECB kept its deposit rate at zero and trimmed the marginal lending rate to 0.75 percent. ECB President Mario Draghi will hold a press conference at 2:30 p.m.

The ECB now has just one more quarter-point cut left before reaching zero, increasing the likelihood of unconventional tools such as quantitative easing or a negative deposit rate if prices slow further or the economic recovery stalls. Euro-area inflation is less than half the ECB’s target and unemployment is at the highest level since the currency bloc was formed in 1999.

“There comes a point where inflation is so weak, and coming in weaker than anticipated, that the case for loosening policy becomes too hard to resist,” said Richard Barwell, senior European economist at Royal Bank of Scotland Group Plc in London, who predicted the cut. “Bad unemployment numbers only make the case stronger.”

Does it seem like I’ve predicted the future hear once again as that Financial Nostradamus Dude???……………………………

full article at source: http://boombustblog.com/blog/item/9171-is-the-ecb-implementing-zirp-or-zeurp-zero-european-union-return-on-potential

Comment:

If you are trading in this market you need to be listening to this guy !

The markets are been pushed up and there is nothing underneath to keep them there or at current values! The art of trading has all but vanished as we are now pit against algorithms and super computers and to survive you must be hedged at all times and well informed .This site (boombustblog.com) is a great start!

EUROBLOWN: It looks like the inflating cost of the euro project is proving too much for Germany

Comment:

Ireland Jul-Aug2012 105

 

When we the people of Ireland wake up we will join the alliance of our fellow financial debt slaves in Southern Europe to Berlin , We will then kick out the Troika and their Irish Government puppets and issue Bonds and that Bas***D Mr. Trapper can go on Bloomberg TV and cry !

The Slog.

A couple of days ago, Syriza leader Alexis Tsipras went on Greek telly to advise Prime Minister Antonis Samaras that he should cease negotiating with the Troika, and instead agree a joint strategy with “his counterparts in southern Europe”.

It’s not hard to see why Tsipras said this. It certainly feels as if the cost of being bailed out is rising….and at times changing from out to in. His line during the Skai interview was to point out that, geopolitically, Greece has a much stronger poker hand than you might think judging from the way the Government keeps in sticking its backside in the air for the Troikanauts to roger at will.

The thing is, whatever ClubMed seems prepared to give, the EC (aka Berlin) always winds up deciding it wants more. Once Nicosia decided to cave in, for instance, the total bailin bill for Cyprus grew within ten days…

View original post 700 more words

A European Solution to the Eurozone’s Problem

By  Gorge Soros

My objective in coming here today is  to discuss the euro crisis. I think you will all agree that the crisis is far  from resolved. It has already caused tremendous damage both financially and  politically and taken an extensive human toll as well. It has transformed the  European Union into something radically different from what was originally  intended. The European Union was meant to be a voluntary association of equal  states but the crisis has turned it into a creditor/debtor relationship from  which there is no easy escape. The creditors stand to lose large sums of money  should a member state exit the union, yet debtors are subjected to policies that  deepen their depression, aggravate their debt burden and perpetuate their  subordinate status.

This has created political tensions  as demonstrated by the stalemate in Italy. A majority is now opposed to the euro  and the trend is growing.   There is a real danger that the euro will destroy  the European Union. A disorderly disintegration would leave Europe worse off  than it was when the bold experiment of creating a European Union was begun.  That would be a tragedy of historic proportions. It can be prevented but it can  be prevented only with Germany’s leadership. Germany didn’t seek to occupy a  dominant position and has been reluctant to accept the responsibilities and  liabilities that go with it.  That’s one of the reasons for the crisis. But  willingly or not, Germany is in the driver’s seat and that is what brings me  here.

What caused the crisis?…………………………………………….

Read full article  at http://www.project-syndicate.org/blog/a-european-solution-to-the-eurozone-s-problem#6mMv7wyQVcBL8cGj.99

EU governments should not be put in a position to compete for funds with commercial enterprises

By Florian Pantazi

Slowly but surely, the set of remedies employed in the hope of solving the euro crisis is now spreading recession from the periphery to the core of the eurozone. Austerity measures, accompanied by an increase in taxes, will bring France’s economic growth to a halt next year. Germany’s growth rate, based on its solid export machine, is also showing signs of slowdown. As the European Union is the world’s largest economy, its troubles are spreading economic stagnation to its main trading partners – China, the US, Japan and Brazil – as well.

The launch of the European Stability Mechanism (ESM), currently hailed as a kind of European monetary fund, has recently re-ignited hopes of appeasing financial markets. Alas, the only lasting solution to the euro’s woes is that of allowing EU national governments to sell their treasury bonds directly to the ECB, thus totally bypassing financial markets.

In truth, no state should be subjected to the same financial pressures and performance criteria that private corporations normally are. To give but one example, prior to 1973 the French government was able to borrow directly from its national bank at zero interest. Through the introduction of private or institutional investors into the equation, as market intermediaries between national banks and their governments, the stage is set for astute financial speculators to increase returns for their clients on the backs of states in need. Rating agencies, acting on behalf of investors, are able to exert pressure on governments to reduce expenditure on essential public services, as it has happened it the EU over the past few years.

full article at source: http://www.europesworld.org/NewEnglish/Home_old/CommunityPosts/tabid/809/PostID/3293/Apossibleexitfromtheeurocrisis.aspx

Greece is the word if you want to know where we go from here

By David Mc Williams

Greece has defaulted again, and the financial markets have shrugged their shoulders. The euro remained unchanged versus the dollar. The Greek stock market even rallied. What does this tell us? It tells us that, as this column has argued again and again, the markets have no memory. Because it improves the overall position of a country, a debt restructuring will be welcomed since it adheres to the golden rule: a broken balance sheet is made better by less debt not more debt.

The media is reporting this as a “deal” in Greece. It is not, it is yet another default from a country where the economy is destroyed and needs to be nursed back to health rather than punished.

The big news for Greece and for us is that the troika has accepted that the country must be healthy in order to pay debt. This logic applies to Ireland too. Before we focus on the implications of the latest Greek default for us, let’s look at the broader picture. And before you think that I am advocating we follow the Greek route, I am not, I am simply pointing out the reality of the global economy and the realpolitik at the centre of Europe.

Effectively, the troika and the Europa group of Greece’s creditors have “agreed” (rather they have had their hands forced) to restructure their bailout loans. Interest rates will be lowered and even deferred to give Greece breathing room.

full article at source: http://www.davidmcwilliams.ie/2012/11/29/greece-is-the-word-if-you-want-to-know-where-we-go-from-here?utm_source=Website+Subscribers&utm_campaign=1b3f442441-22112012&utm_medium=email

Germany alienates by pushing EU too hard

Britain’s Foreign Secretary William Hague accused Germany of alienating many from European ideas by pushing too hard for too much integration. “Sometimes less is more,” he said at a policy forum in Berlin.

He said the push for ever-greater coordination in areas like the banking sector and national budgets to fight the euro crisis risked in fact driving a wedge through the EU – creating mistrust particularly in his own Conservative Party, currently in an ill-tempered coalition with the British Liberal Democrats.

“The coalition government is committed to Britain playing a leading role in the EU but I must also be frank: public disillusionment with the EU in our country is the deepest it has ever been,” Hague said.

“People feel that in too many ways the EU is something that is done to them, not something over which they have a say…  People feel that the EU is a one-way process, a great machine that sucks up decision-making from national parliaments to the European level until everything is decided at that level.”

He added: “These points may be felt most acutely in Britain but they’re not felt only in Britain.”

As Europe faces a growing gulf between the 17 countries of the eurozone which have the euro currency, and the remaining 10 EU member states, Germany Foreign Minister Guido Westerwelle insisted all 27, including Britain, should encourage a sustainable end to the euro crisis………………………………..

full article at source:http://www.thelocal.de/politics/20121023-45727.html

Elites Play Waiting Game with Europe

The euro crisis is not over and is about to get interesting … Supposedly the euro crisis is all over. The mighty ECB has spoken. I have received triumphalist suggestions from bastions of euro-fanaticism that I should now capitulate. ECB bond-buying will cut borrowing costs for ailing eurozone nations but that is not the essence of the euro problem. – Roger Bootle/UK Telegraph

Dominant Social Theme: This time the Eurocrats will get it right. Central bank bond-buying is the magic bullet!

Free-Market Analysis: Is central bank bond-buying the key that unlocks the Euro-crisis and provides a solution? Well …

We still remember the triumphant announcement several years ago that Germany’s Angela Merkel and France’s Nicolas Sarkozy had saved the European Union by coming up with a fund that would provide enough cash to impress upon the bond market that Europe was solvent.

We remember the breathless, behind-the-scenes reporting that Sarkozy had threatened to leave the union if Merkel didn’t capitulate to his terms. Horrors!

full article at source:http://www.thedailybell.com/4279/Elites-Play-Waiting-Game-with-Europe

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