Monday 21 November 2011

Euro-crisis Britons fear Berlin's European super-state

A working paper of the Federal Government electrified Britain. This
will allow the orderly Berlin State Insolvency and create a European
Monetary Fund.

It's not often that British media dig up papers of the Federal
Government. Whoever leaked this document to them, knowing how the
British would react.

On Friday in Berlin: Chancellor Angela Merkel and British Prime
Minister David Cameron

They were once so electrifying that it writing immediately translated
into English and presented to the Internet. Germany wants to create a
"European superstate", writes the "Telegraph".

"It confirms fears that lead the German plans in the euro crisis into
a European super-state could, in the financial and tax policies are
made in Brussels." The British "Financial Times" speaks of a
"significant amount of detail, such as Berlin wants the government to
change the economic Euro-zone ".

Plans for the fiscal structure of a new Europe

The six-page paper titled "The Future of EU integration required
political progress towards creating a stable union." And it is indeed
a paper from the federal government, but it is not from Chancellor
Angela Merkel, but by their Foreign Minister Guido Westerwelle. The
FDP politician sent it on 20 October 2011 to members of the Union
Group, where it under went unnoticed.

This paper provides the attentive reader something concrete, but it
plans for the fiscal structure of a new Europe.

Reading through it quickly becomes apparent is that the existing
authority of the EFSF and planned for the coming year European
Stability Mechanism (ESM) for a long time could not be the last word.

From a volume of 700 billion € ESM-equipped, the Bundestag will
decide the next spring, as soon Westerwelle wants a European Monetary
Fund (EMF) to make, which can directly intervene in the budgetary
powers of the States €.

"The instruments of the ESM is not sufficient," it says in his paper.
"It also requires real rights of intervention in the national budget
rights of those Euro-Member States which are under an ESM program and
thus potentially jeopardizing the stability of the euro zone."

And then follows the sentence to see where the British, but also a
departure of U.S. observers present bailout policy: "The ESM must also
be able to carry out an orderly insolvency of a permanently insolvent
€ state. The ESM would these two steps into a real "EWF".

Orderly bankruptcy


There it is again, the orderly insolvency. This time it does not come
as a side note, therefore, the Minister of Economy, but in the
government strategy paper is embedded.

Further writes Westerwelle: 'For Member States which are located
within one-ESM program and found to comply with, is that debt
sustainability is not given, the possibility of interventions in the
budget is not sufficient. Therefore, it must also give the possibility
of an orderly bankruptcy States to reduce the burden on taxpayers (the
other euro area member states) and also to create the possibility for
a restart of the affected country. "

Also planned is even a "stability Commissioner". This position should
be equipped with large powers. Are provided - such as the European
Monetary Fund - "direct rights of intervention in national households
of € states."

A change of course?

And the private creditors, the federal government take the duty. "The
present ESM contract in the proposed permit participation by private
creditors so-called" collective action clauses "(CACs) is not
sufficient," writes the secretary of state.

All this is not without a modification of the Basic Law and the
European treaties possible. Amending European treaties to a convention
to be convened, suggests Westerwelle.

"Such a convention should quickly submit proposals within its tight
fiscal policy mandate, which are then decided by an intergovernmental
conference," the foreign minister. In just a few years the changes
could be implemented.

Does this letter but, as under the British make a course change to,
away from the bail-out policy for the orderly insolvency?

It's hard to say. What is written in it is, first of all the price of
the foreign minister. In other key ministries such as Finance Minister
Wolfgang Schaeuble, it seems to play no role. From there was "World
Online" the terse reply, the paper was not known.

Draghi insists on independence of the ECB

Euro-crisis
Draghi insists on independence of the ECB
Friday, 18.11.2011, 17:03
Mario Draghi, head of the European Central Bank
In the debt crisis, more and more voices calling for help from the
European Central Bank. ECB chief Draghi has now rejected his critics
in their place - and gets support from Federal Reserve Chairman
Weidmann.

The President of the European Central Bank (ECB), Mario Draghi, has
defended the independence of his institution. The ECB lose their
credibility if they - as required in many cases - engaging with more
money in the financial markets, Draghi said on Friday in Frankfurt am
Main. Also, Bundesbank President Jens Weidmann cautioned against an
overly strong collection of the ECB.

The credibility of the ECB is justified in the success of its monetary
policy with which they curb inflation, Draghi said at the conference
Euro Finance Week. That is the contribution that could make the
monetary authorities to support the growth, create employment and
financial stability. "And we make this contribution in complete
independence," said Draghi

Shopping spree
Nevertheless, the ECB has purchased since May 2010 for almost € 200
billion government bond ailing euro-zone countries. These acquisitions
are in the euro-zone is very controversial, because the central bank,
according to many experts that exceed their expertise and money
associated with fiscal policy.

According to one newspaper report, the ECB but a secret weekly cap on
their bond purchases. The very existence of this limit is secret, told
the "Frankfurter Allgemeine Zeitung" on Friday without citing sources.
Could there be feared that the knowledge about the border to encourage
speculation.

But the skepticism was growing about the buying-in of Governors of the
Central Bank, in which the heads of 17 central banks in the euro
countries are represented, told the "Frankfurter Allgemeine Zeitung"
on. Therefore, the upper limit had been lowered last week to 20
billion €. At the meeting of Council on Thursday, the limit was
probably set down again. Bundesbank President and ECB Council Member
Weidmann wanted to not comment on Friday on request to the existence
of such a limit.

Warning from the Federal Reserve Chairman
Instead, he warned in the previous Congress, the Federal Reserve to
collect revenue for purposes of crisis management even further. The
lack of success in addressing the debt crisis does not justify it, to
irritate the mandate of the ECB, said Weidmann. "A clear commitment to
our mandate is an essential element for a successful future of the
euro."

To enter the monetary union in the future, a stable and consistent
framework, there are two practical ways: "The first would be a
reversal of the fundamental principles, with the responsibility of
individual Member States in fiscal and economic policy matters must be
taken seriously," said Weidmann. The second way is a "fundamental
change in the federal structures of the European Union" - a so-called
fiscal union in the coordinated monetary and fiscal policy closely
monitored and is European.

Federal Finance Minister Wolfgang Schäuble (CDU) said on Friday in
favor of closing the "gap" for the fiscal union. Within "24 months",
the EU can modify their contracts accordingly prognostizte Schäuble.

Euro Crisis: Spanjards de-elect government

MADRID (RP) The government of Spanish Prime Minister José Luis
Rodríguez Zapatero is the fifth, which is this year fell on the euro
and financial crisis or deselect. His Socialists suffered a historic
defeat. In June, lost in the heavily indebted Portugal, the socialist
José Sócrates, the election in October cost the dispute over the euro
rescue the Slovak Prime Minister Iveta Radičová the majority in
parliament and in November took over in Greece and Italy transitional
governments, the business of George Papandreou and Silvio Berlusconi.

After counting the votes of 77 percent in Spain, given the
conservative Popular Party Mariano Rajoy, PP of 44 percent and thus
the absolute majority. The Socialists came in the early elections to
29 percent. The election campaign was mainly determined by the
unemployment. The ratio of more than 21 percent, the highest in the
EU. Many people accused the Socialist government to have implemented
reforms such as cuts in salaries and benefits too late.

The 56-year-old Rajoy is expected to take over power in December. But
it is expected that soon he set out his plans. Spain is under pressure
from the financial markets, because the interest rates on government
bonds last snaking on the mark of seven percent. This threshold is
considered critical. Spain is in proportion to its gross domestic
product, however, still less in debt than Germany.

Stood for election in Spain 350 MPs and 208 senators. The Socialists
had done, Alfredo Pérez Rubalcaba in the election. Prime Minister
Zapatero, after six years in office no longer taken up.

Between the Conservatives and the Greek international creditors of the
country there is further dispute over the payment of the outstanding
loan from the billion-euro rescue package. At a meeting with
representatives of the International Monetary Fund, the European
Central Bank (ECB) and the EU refused to allow the head of the New
Democracy party, Antonis Samaras, a written statement in support of
further reform. The verbal agreement is sufficient. His party is
involved in the transitional government under former ECB deputy Lucas
Papademos.

Euro-debt-crisis in the wake

The interest rates for the states rising and rising. Now many call for
the central bank
In Greece, it all started, now in core countries also lose confidence
in Europe.

The European debt crisis Augsburg unfolds more and more an
idiosyncratic dynamics. Even previously stable countries in the center
of the current euro area feel the pull of the debt crisis. For Italy
and Spain, the question is asked whether the two states can fund the
medium term reliable. The result is that some politicians and
economists are now an even greater commitment of the European Central
Bank (ECB) call - to the call to fire up the printing presses. What
has happened?

To understand this, one must keep in mind the development of the
crisis: The starting point was in 2010, the small but highly indebted
euro-state of Greece. Be rescued after he had gone there, the fiscal
position of the rudder, Athens had to go through international aid.
With Ireland and Portugal, two countries in the wake of Greece's been
captured, they had to slip in under the euro rescue EFSF. In summer,
the crisis spilled over to the third-and fourth-largest economy €
Italy and Spain. Although these countries are still on the free market
to refinance, however, only sensitive to higher interest rates. Last
week, approached the interest of Spanish and Italian government bonds
of the critical level of 7 percent.
DISPLAY

New peak of development, is that countries come under fire, which were
assumed to be solid: Austria, Finland and especially France. The
growing distrust of investors in the euro area is reflected in higher
risk premiums. French five-year bonds climbed last week to 2.82
percent, to 2.31 percent in October. For the affected countries, it is
therefore more expensive to finance current expenditures of the state.
Should the crisis spread to the core, even the rescue fund EFSF would
be powerless, could provide a financial engineering "leverage" up to
one billion euros. Some scientists and politicians called for the
weekend, the ECB should buy more government bonds in order to calm the
markets and ensure necessary fire up the printing presses. There
remains only the Federal Reserve as a "money-fire" to prevent
existential risk to the stability of the monetary union, for example,
said the director of the Hamburg Institute of International Economics,
Thomas Straubhaar. The ECB buying bonds of debt since May 2010 states
such as Greece, Italy and finally to the interest on their debts do
not rise more and more.

Federal Finance Minister Wolfgang Schaeuble rejected demands for the
firing up the printing presses back immediately: "The Fed is not there
to finance government debt. Point, "he said.

EU partners want to return for German interest benefits

But Germany is also comfortable in a situation. Unlike most euro area
countries, Germany has not yet lost any confidence, the demand for
government bonds is large. The federal budget will benefit from this
flight to safety. Decrease due to the high demand for German bonds,
the interest rates.

The German advantage awoke promptly at the weekend, the desires of
other EU states. Several European finance ministers have agreed not to
demand from Germany in return for interest benefits, it said in a
report of the Focus