just after the latest punitive action by Fitch as you can read here:
A three notch cut for Spain (and a deteriorating view of those banks…)
the author asks himself, what are economists for when obviously those in charge (governments, EU , EC) are not listening to their recommendations anyway ? This is not only frustrating for Sony Kapoor as he expressed several times in the past, but also for the one writing blog entries here at Eurozoneremarks.
And it's a well educated guess that many CEOs and other people in charge ask themselves a question whether or not the economists nowadays a bit like those fools employed by European monarchs to entertain them back then in the middle ages.
Let there be no doubt: All the economists actively involved in governmental consultations need to get praised not 'spanked' and the question who is the real fool is answered when complacency is turning yet another country into "smoldering ruins" ¹.
The question this author asks at least himself is why those Presidents, Chancellors, Prime Ministers did not involve more of their ministries like e.g. as their justice departments for legal advice of every single measure proposed by economists whether it is within the legal framework of EU regulations or not. Not after consulting those fine economists like Mathijs Bouman of the Netherlands who did see already in April what would will happen when nothing is being done about it, and who admitted that extraordinary times may need extraordinary measures. Not after, but simultaneously and not only the ministries for legal expertise but also the heads of the economic ministries in order to check immediately what their countries' industry is capable of and willing to contribute to the immediate rescue operation.
A pragmatical and most important of all quick response. And thereby a clear sign to the markets that the solidarity of other members of the EMU is not about words, statements given late at night after summits without any decisions. Some response just as the author here repeatedly referred to those courageous decisions taken while a catastrophe was happening in his jurisdiction. Once again of course a tribute to Helmut Schmidt and his rescue operation in 1962 when gigantic flood waves threatened lifes and properties of Hamburg's citizens. Here is a detailed report on what exactly Mr Schmidt did: Helmut Schmidt regiert den Krisenstab
Mr Schmidt later told in an TV interview, that at the time he was fully aware of the fact that he was trespassing the limits of the German constitution and was willing to face any personal consequences for it later. Nothing ever happened to him !
Mr Obama should call those European leaders on an hourly basis in order to act quicker or as Ms Lagarde (IMF) put it recently:
"If I was able to do one thing, I would lock them in a room, take the key and let them come up with a comprehensive plan,"source:The euro zone, slow-motion crashes and Latvia-Chrystia Freeland
How about opening a subsidiary of German KfW in Madrid immediately and start to to hand out loans to SME sector of Spain ??? Bilateral agreements Rajoy / Merkel ! Do something ! Bend the rules ! Act now ! Don't just enjoy the sweet fruits of own sovereign bond yields of 0,00% or just a bit more than that !
Schaeuble Says Germany to Help Spain With Joint Investment Plan
(Bloomberg Apr 27th 2013)
¹ copyright for this expression by Joe Weisenthal ;-)