EU presidency: US economic plans 'a road to hell'

[katty]

more: http://finance.yahoo.com/news/EU-presidency-US-economic-apf-14737788.html

EU presidency: US economic plans 'a road to hell'

Czech premier, currently European Union president, calls US economic measures 'a road to hell'
Raf Casert, Associated Press Writer
Wednesday March 25, 2009, 12:22 pm EDT

STRASBOURG, France (AP) -- The president of the European Union slammed President Barack Obama's plans to have the U.S. spend its way out of recession as "a road to hell," underscoring European differences with Washington ahead of a crucial summit next week on fixing the world economy.

AP - Czech Prime Minister Mirek Topolanek puts on headphones Wednesday, March 25, 2009 at the European Parliament in ...
Other European politicians kept their distance from the blunt remarks by Czech Prime Minister Mirek Topolanek, with some reproaching the Czech leader for his strong language and others reaffirming their good diplomatic ties with the U.S.

Topolanek, whose country currently holds the rotating EU presidency, told the European Parliament on Wednesday that Obama's massive stimulus package and banking bailout "will undermine the liquidity of the global financial market."

[Idealism]

1. Mirek is just upset because his government is being dissolved

[terisan]

2. Actually poor countries are afraid US massive borrowing will make borrowing too expensive for them

As demand for loans goes up , interest rates rise, and his country-much-poorer than ours-may suffer greatly.

I think the other Europeans are being diplomatic--they don't want their concerns aired publicly but behind closed doors-plus the US bailout of AIG benefited some big European banks in "Old Europe" So Germany and Switzerland benefited from US bailout.


The irony is that the US by bailing out its richest and Europe's richest is placing the load on the non-rich here and in Europe and elsewhere.



"Americans will need liquidity to finance all their measures and they will balance this with the sale of their bonds but this will undermine the liquidity of the global financial market," Topolanek said.


Europeans did not want huge stimulus spending, but may have to get on board now; Britain says it can't. The Academic in the article, Veron, thinks US does have room to spend but specifically references his worry about the taxpayer in all this stimulus spending

[Idealism]

3. That isn't making borrowing expensive, their currency being devauled by capital flight is.

Eastern Europe, in particular, has been hit hard by the global recession. Every country has seen their money greatly devalued, some of them by as much as 50% since September 2008.