Dear Participants,
I would like to start a discussion to hear about your opinion on the results of the last summit. The European Stability Mechanism will be allowed to give direct aid to banks, which are about to collapse, as soon as there is a "European financial supervision". At the same time we have a more "flexible and efficient useage" of the rescue fond. If in the future the EFSF and ➔
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Dear Participants,
I would like to start a discussion to hear about your opinion on the results of the last summit. The European Stability Mechanism will be allowed to give direct aid to banks, which are about to collapse, as soon as there is a "European financial supervision". At the same time we have a more "flexible and efficient useage" of the rescue fond. If in the future the EFSF and the ESM will be able to buy bonds of countries, which are in crisis, there probably will be no strict reform programms. The only condition should be the compliance with the criterias set within the Stability and Growth pact. While the Italian journalists are writing about a victory of Monti and that the doors are open for Euro-bonds, the German press is highly active in drawing comparisons to the loss in the European championships. There are pictures of journalists at the summit, where everybody is cheering against Germany, which provokes anger and a feeling of that everybody is against the Germans and that there are all very much unfair. Indeed the Germans have quite bad experiences with their own way of Solidarity system, where there are regions, which are under 20 years of constant money aid and nothing becomes better, rather worse, even though there is a true federation. And yes the German government becomes more and more applickable to blackmail, as the costs for the German taxpayer are of dramatic raise. Indeed this proofs Monti proudly saying, that in the future there can be money from the ESM without a troika coming to Italy. The negotiation tactics of Monti and Rakoy can be considered to be a way of fighting against Germans dominance, but also show exactely the dramatic intergovernmental lack of efficiancy and credibility of the promise that there will be no moral hazard.
On the other hand you have to notice that Germany can be considered to be lucky that the investors have not yet started to get the hell out of the European market, while spekulating on a new Deutschmark or a North-Euro after a collapse of the Euromarket. Only this is one explanation of the zero spreads on German bonds. While I dont want to deny that we need positive signals towards the Southern countries to keep on the way of reforms, I more and more doubt that the crisis is to be solved like this. This economic pact indeed will be rather a drop in a bucket and will not bring any economic growth. What we need in my opinion is a true European Insolvency mechanism on the one hand (Which is completely left aside!!!), which could let the private sector better involve in future collapses. On the other hand we would need to have a long-term plan to set out the true ideas of a Political Union, strengthening the institutions and European democracy and giving out a true vision, while the Southern countries have to keep on their way of reforms. At the same time the sinking fund could be considered as a short term solution, while all other forms of Eurobonds are strictly to be declined. This whole step by step way, these terrible blamegames on both sides, these backdoor haggling methods, semantic games and tricky secondar law ways of buracreats like Barroso and Rompuy (which of course have a good will but have no legitimacy) will lead more and more to a situation of a constant undemocratic solidarization of private costs, which is indeed as the FAZ put it, only known in Marxist theory. The summit is not the solution and the big bang is still about to come.
What are your opinions?
Best European regards
Niklas