European Leaders Use Debt Downgrades to Argue for Austerity, and for Stimulus
European leaders sought to limit damage from a ratings agencys downgrade of nine countries on Friday, or even turn the news to their advantage, saying that it showed the need to impose more austerity or else do more to stimulate growth.
Germanys chancellor, Angela Merkel, said Saturday that the downgrade by Standard & Poors meant the euro area must speed up measures to create a more centralized currency union.
We are now challenged to implement the fiscal pact quickly, Mrs. Merkel said in a statement Saturday, a day after S.& P. downgraded France, Austria and seven other countries but not Germany. She added that leaders should not water down the agreement and instead quickly pass other measures they have agreed to, like limits on debt.
In Italy, Prime Minister Mario Monti used the downgrades to bolster his argument that austerity alone would not solve the euro crisis. Europe needs to support national efforts in favor of growth and employment, Mr. Monti told the newspaper Il Sole 24 Ore, according to Bloomberg News.
full: http://www.nytimes.com/2012/01/15/business/global/after-downgrades-european-leaders-argue-for-both-austerity-and-stimulus.html
xchrom
(108,903 posts)i'm skeptical this batch of leaders has what it takes.
other than austerity -- which will get every one more of what they already have.
RKP5637
(67,108 posts)lead out of a paper bag IMO. It's the ultimate cop out for incompetence, austerity.
xchrom
(108,903 posts)truedelphi
(32,324 posts)Regulate the damn bankers.
Then force the Federal Reserve to admit just which Global Bankers were "loaned" the damn nine to fourteen trillions of dollars that Paulson/Bernanke/Geithner offered up, and then force those Global Bankers to truly re-pay these loans.
With that fourteen trillions of dollars the US government could implement truly creative and tremendously beneficial "loans" to businesses that are small, that are committed to the growth of free(r) energies, and with people in so many nations then putting solar and wind devices on individual houses, we would see entire economies recover.
Instead, California was denied the twenty billions of dollars in loans the former governor Ahnold Schwartzenegger asked for, as Geithner claimed this would imperil the Federal Government's budget. I have ben asking this question for at least eighteen months - Nine trillions of dollars could run the entire state of California's budget for 133 years! If it isn't okay to loan a state some twenty billions of dollars, then how is it okay to loan out trillions to banks overseas?)
Lucky Luciano
(11,254 posts)There is a big difference between guaranteeing a bank's liabilities and actually transferring the cash. Also cash that was transferred was mostly for short term liquidity. It is quite a different animal from lending California $20B for the long term. Not saying California did not deserve the consideration, but you are makign a false comparison.
truedelphi
(32,324 posts)He said it was nothing that tax payers should worry about, as it was simply a transfer of "digital monies," into accounts that he digitally created at whatever banks he deemed needing and worthy of his consideration.
Oh and the bankers admit to the money being loaned and then state they have paid it back. Unfortunately the bankers used rather dubious volumes of investment books as collateral. If everything was so hunky dory, we wouldn't be seeing so much upset occurring in Europe even at the moment I type this.
But then the sad and sorry little secret that we were never told during the Autumn of 2008 when the Doctrine of Bailing out the cons, grifters and shady transactions people was that some half a quadrillion dollars resulted from the losses that were looming as a result of all the derivative/exotic investment losses.
fredamae
(4,458 posts)and Very Familiar!
itsrobert
(14,157 posts)Romney attacks Obama on so-called wanting to be like Europe.
By the end of the week S&P downgrades several Eurpean Counties.
Looks like they are manufacturing this.
truedelphi
(32,324 posts)Business, given as how they were one of the rating agencies instrumental in setting up the world for these economic crises.
lovuian
(19,362 posts)It worked in Argentina And Brazil
but it isn't going to work in Europe
DallasNE
(7,403 posts)Merkel is right regarding measures to create a more centrlized currency union because it would give the Euro central bank greater flexibility, i.e., qantatative easing. She is wrong to demand "limits" on debt, rather than targets.
Some belt tightening is probably available. It is just that those measures must be weighed against the impact those measures would have on growth and employment. Merkel seems to be losing sight of the fact that the problems facing Italy are both different and larger than those facing Germany and that imposing the wrong solution would do more harm than good. In other words, it's complicated.