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Quisling market fundamentalist rulers betray best interest of EU population

by Migeru Fri Nov 12th, 2010 at 04:43:01 AM EST

RTÉ News: EU leaders seek to calm bond markets

The statement by France, Germany, Italy, Spain and Britain was issued in Seoul after spreads on Irish 10-year government bonds over German bunds surged to a record high, hitting the debt of Portugal and Spain and the euro.

'Whatever the debate within the euro area about the future permanent crisis resolution mechanism and the potential private sector involvement in that mechanism we are clear that this does not apply to any outstanding debt and any programme under current instruments,' the statement said.

The EU is looking at new rules for debt issued from 2013 that may entail private investors rolling over existing debts or to bear their share of losses, as has been the case in new contracts written into debt programmes of some emerging market issuers.

Big-five EU leaders to markets: you will suffer no haircut even if it kills us.


Update [2010-11-12 9:3:57 by Migeru]: This just in from Reuters: Ireland not in position where it needs outside help-Fin Min

Ireland is fully funded until June 2011 and has substantial cash reserves so it would make no sense to apply to the European Financial Stability Facility (EFSF) for help, Finance Minister Brian Lenihan said on Friday.
[editor's note, by Migeru] Gah, I accidentally Archived this instead of Saving it, so no more comments are possible...

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Boy, am I pissed off!

Of all the ways of organizing banking, the worst is the one we have today — Mervyn King, 25 October 2010
by Migeru (migeru at eurotrib dot com) on Fri Nov 12th, 2010 at 04:45:54 AM EST
Ridiculous selling out all accross the continent, all in an effort to appease the bond gods.

Theology in political economy is a requisite curriculum within the neoliberal system.  

by redstar on Fri Nov 12th, 2010 at 04:56:09 AM EST
[ Parent ]
Zapatero, the last best hope of Social Democracy in Europe [sic], joins forces with the Conservative-Neoliberal governments of Germany, France, Britain and Italy in a futile attempt to protect his own bond spreads, only to find a few weeks/months from now that the other 4 larger economies hang him out to dry...

Who the fuck advises Zapatero on economics?

Of all the ways of organizing banking, the worst is the one we have today — Mervyn King, 25 October 2010

by Migeru (migeru at eurotrib dot com) on Fri Nov 12th, 2010 at 05:02:55 AM EST
[ Parent ]
redstar:
You are not alone
So where the fuck is everybody?

(I'm asking about a political movement I could join in Spain and, no, I don't hear the right economic noises coming from anyone, not Izquierda Unida either...)

Of all the ways of organizing banking, the worst is the one we have today — Mervyn King, 25 October 2010

by Migeru (migeru at eurotrib dot com) on Fri Nov 12th, 2010 at 05:09:51 AM EST
[ Parent ]
everything from a movement or party, but my bet is you'd effect the most satisfactory change via IU...

I'm doing similar, in my small way, up here.

by redstar on Fri Nov 12th, 2010 at 05:21:22 AM EST
[ Parent ]
Except IU is on its way to disappearing as a parliamentary force. I still feel like, in Spain, any positive change is going to come form the PSOE.

I mean, Zapatero keeps attracting prominent people from the IU orbit, such as Rosa Aguilar.

Of all the ways of organizing banking, the worst is the one we have today — Mervyn King, 25 October 2010

by Migeru (migeru at eurotrib dot com) on Fri Nov 12th, 2010 at 05:24:58 AM EST
[ Parent ]
I wish I shared your optimism.
by redstar on Fri Nov 12th, 2010 at 05:29:52 AM EST
[ Parent ]
I didn't say "positive change is going to come" but "any positive change"...

Of all the ways of organizing banking, the worst is the one we have today — Mervyn King, 25 October 2010
by Migeru (migeru at eurotrib dot com) on Fri Nov 12th, 2010 at 05:34:30 AM EST
[ Parent ]
I think that the dissapearance of IU in Spain might have a lot to do with the impossibility of a "left turn" for PSOE. The only way socialist parties (or more apropriately "socialist" parties, nowadays) can move to the left politically is if there is a left, to the left of themselves that can drag them there. No IU (or something like that) and the Overton window is stuck and any movement to the left is impossible...

However at this point, angry protests all over Spain might help with that window, if they shift the discussion from the monopoly of the political class to society. Especially if they are not limited to Spain.

The road of excess leads to the palace of wisdom - William Blake

by talos (mihalis at gmail dot com) on Fri Nov 12th, 2010 at 07:52:13 AM EST
[ Parent ]
but I disagree that the problem has anything to do with the euro or monetary policies.

Our politicians make two mistakes

  • one is to think that a default by one country of the eurozone somehow means that the euro is a failure;
  • the second is to think that a default today means that you won't be able to borrow later. The history of banking is that of banks going back to lend to countries (and companies) that defaulted on them not very long ago. Just look at Russia for a recent example.


Wind power
by Jerome a Paris (etg@eurotrib.com) on Fri Nov 12th, 2010 at 07:06:31 AM EST
[ Parent ]
You never saw an economically orthodox monetary hawk you didn't like.

Willem Buiter's Maverecon: What's left of central bank independence? (May 5, 2009)

Stick to your knitting and don't get too close

It is a mistake for central bankers to express, in their official capacities, views on what they consider to be necessary or desirable fiscal and structural reforms. Examples are social security reform and the minimum wage, subjects on which Alan Greenspan liked to pontificate when he was Chairman of the Board of Governors of the Federal Reserve System, and Ben Bernanke's tendency to lecture on everything, from equality and opportunity to teenage pregnancy. It is not the job of any central banker to lecture, in an official capacity, the minister of finance on fiscal sustainability and budgetary restraint, or to hector the minister of the economy on the need for structural reform of factor markets, product markets and financial markets. This is not part of the mandate of central banks and it is not part of their areas of professional competence.

...

President Trichet of the ECB is already so far down the road of telling governments what to do and what not to do in the fiscal and structural reform domains, that one is hardly surprised by yet another lecture on budgetary policy from the Eurotower.  Traditionally, continental European central bankers speak very little about monetary policy in public, and are often unwilling to engage in public debate or answer questions about their monetary duties, but carry on endlessly about budgetary and structural reform matters.  It's always easier to speak about things you have no responsibility for, that are not part of your mandate and about which you probably don't know very much.

...

Independent central bankers can, and where possible should, cooperate with and coordinate their actions with those of the fiscal authorities and with those charged with structural reform. If central banks, Treasury ministers and ministers of the Economy were to act cooperatively toward each other, and with credible commitment towards the private sector, good things may well happen. The reason this does not happen in the EU, or even in the Euro Area, is not a question of principle, but of logistics. There is no coordinated fiscal policy in the EU or in the Eurozone, so the pursuit of coordination between fiscal and monetary policy in the EU or in the Eurozone is simply not possible. Mr. Jean-Claude Junker could have private breakfasts and/or public lunches with Mr Jean-Claude Trichet every day of the week, every week of the year, it would not bring monetary and fiscal policy coordination in the Eurozone an inch closer to realisation.



Of all the ways of organizing banking, the worst is the one we have today — Mervyn King, 25 October 2010
by Migeru (migeru at eurotrib dot com) on Fri Nov 12th, 2010 at 07:17:31 AM EST
[ Parent ]
Who advises our politicians on macroeconomics and fiscal policy?

Of all the ways of organizing banking, the worst is the one we have today — Mervyn King, 25 October 2010
by Migeru (migeru at eurotrib dot com) on Fri Nov 12th, 2010 at 07:18:34 AM EST
[ Parent ]


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