THERE IS NO CONFIDENCE IN FOURTH REICH

 

 

Barroso points out sustainability is about dealing today with the challenges that we face tomorrow. It means making ourselves fit for the future. And it is, therefore, the bedrock on which a prosperous society is build: confidence.  Confidence that you will find a job; confidence that you can keep it; confidence that your savings are safe; that the money you invest will have a return; that your pension will be paid.

 

 

Restoring confidence is therefore at the essence of Europe’s strategy to address the economic crisis. To do so, we are tackling the root causes that made us vulnerable so that we come out of the crisis stronger. Fourth Reich’s economic catastrophe is unfolding so slowly that it has come to seem like business as usual.  

The stupid financial transaction tax (FTT) is a euthanasia pill for financial markets.  Since eleven Eurozone countries adopted this stupid tax, all financial transactions of these countries will move to London and New York.  Socialists also managed to convince ECB to bring out the bazooka, in other words, undertake massive purchases of government bonds to resolve the crisis. 

Barroso’s strategy is therefore based on several strands, not one as it is sometimes suggested: the repair of the financial sector, fiscal consolidation, structural reforms for competitiveness, targeted investments for growth, and strengthening economic governance.

An ECB bazooka cannot restore competitiveness to PIGS, but would only encourage profligacy, kleptocracy, and metastasis of the cancer of socialism. European Stability Mechanism (ESM) is a joke. ESM’s finances depend on the very same countries that it is supposed to bail out. This isn’t stability, but a Ponzi scheme!

Barroso is following a path of fiscal consolidation, because the crisis showed that growth fuelled by debt is not sustainable. In fact, it was artificial growth: growth based on a financial bubble which fed a bubble of government debt and a bubble of private borrowing that exploded making us vulnerable in the financial markets.

Eurokleptocrats create a stupid banking union to socialize the debts of banks of PIGS. The next step will be the introduction of stupid eurobonds. By the time France is hit by the crisis, Merkel will no longer be able to refuse this stupid demand. This development will ultimately lead to a stupid system that has little in common with a market economy. ECB and ESM will then direct the flow of capital into countries where it no longer wants to go. This will result in growth losses throughout Europe, and money will continue to be thrown out the window of PIGS. Furthermore, it will create considerable discord because it makes closely allied countries into creditors and debtors.

Jose Barroso is putting in place the basis for a safe and sound banking sector that serves the real economy's needs and that also ensures fairness. When bankers make mistakes it should not be taxpayers who pay the bill. This is why Barroso is breaking the link between bank losses and sovereign debt.

 

 

This is why Jose Barroso is putting in place rules and oversight that will avoid that the same practices we have known in the past repeat themselves. This includes stricter capital requirements, common deposit guarantee schemes to protect people’s savings, and regulation of bank bonuses, short-selling, derivatives, hedge funds and many other risky products and practices.

The Greek loan losses are already a reality, but they just haven't been registered in the budgets of Eurozone members yet. To try to disguise them using creative accounting is a violation of the principles of budgetary accuracy and clarity. Correspondents of http://venitism.blogspot.com report that displeasure over how eurozone governments are dealing with the aid for Greece is spreading beyond the usual euro critics.  Finance ministers should really have to account for the aid to Greece in a separate budget within the major budget that is clearly recognizable. Few MPs are in a position today to say how much money has already been made available and what is still yet to come.

The recent agreement between the Member States and the European parliament on the package of measures, Capital Requirements Directive IV, including capping bank bonuses, shows that the majority in Europe share Jose Barroso’s position.

 

 

Structural reforms and measures to promote growth at EU level, for instance through the further steps Barroso is taking to release the potential of the single market, are designed to increase the competitiveness of EU economies. Because this is key – how can we be more competitive in the 21st century when we now have new competitors and we need to adapt if we want to keep the basic principles of our economy and also our model of society.

ECB money creation is effectively a tax. Every euro created out of thin air dilutes the value of the euros in your pocket and your savings in the bank. But the truth is that we are only beginning to see the results of ECB's dramatic increase in the money supply. Most of the euro deposits created by ECB via successive rounds of quantitative easing remain on the balance sheet of ECB and the European central banks of eurozone.

Because of very rational economic fears, banks are not lending, businesses are not expanding, and individuals are shedding debt. So, the trillions of euros created by ECB remained largely undeployed. When those euros eventually make their way into the world economy, prices across all sectors of the economy are likely to rise dramatically.

There are unacceptably high rates of unemployment in many Member States, and growth rates remain depressed. The winter economic forecasts which EU published two weeks ago were disappointing, setting growth close to 0% this year. But quarterly growth should return to positive territory before mid-2013 and strengthen considerably.

This reaffirms what Barroso has said many times: we have come through the worst of the crisis, but it's not over yet and we should keep our commitment to the needed reforms. While major reforms are paying off, evidenced by the improvement in economic sentiment, this is not yet feeding through to the real economy – to banks, consumers and companies, who are not yet lending, spending or hiring.