Dear reader,
unfortunately another EU-politician made some remarks which made my blood boil and as a result there is now another peppered blog entry in response. As the new year should bring some improvements you have encountered a warning before clicking to read this latest opinion based article. So last chance to quit now before perhaps getting higher blood pressure yourself.
So enough of health warnings now and here is the point:
Latest less smart remarks of a politician launched regarding the big Friday the 13th eurozone spanking by Standard & Poors (S&P) was that of Mr Fuchs of German CDU MP group and its deputy chairman when he issued this statement:
This is American policy (Ger )
German conservative advises UK downgrade
As it happens he is not the only who is playing the game usually little kids play when they are caught in the act of a little felony by their Kindergarten teacher and then put the blaming finger to the other kid expressing: "But this guy did this & that" in order to escape any punishment by teacher. Or if yo will like the nice scenes when soccer players trying to convince the referee (by performing like in a theater) that the other deserved to be sent off the field because he was the one in utter violation of rules.
This is not the first time EU politicians and even central bankers used this reflex on the referees serious judgment. It happened first with Mr Juncker when he expressed that Germany was at least as bad as Spain when Spanish bond yields went through the roof (low coverage) and another instance (much more coverage by press) was those words by Mr Noyer regarding UK which sparked a short but hefty row between UK & France.
Here they are:
Germany has debt too, more than Spain: Juncker
UK 'should be downgraded' before France, says ECB's Christian Noyer
And instead of talking they should be listening .. reading will also do ...like this S&P statement on their latest decision of new grades for France & others:
Credit FAQ: Factors Behind Our Rating Actions On Eurozone Sovereign
And even before the last big summit on Dec. 8/9th the warning of S&P was issued and again they (politicians) preferred to make a big show with another delay of hammering out treaties instead of taking instant measures. So the 50% haircut is still ongoing (even on the brink of collapse) and new treaties not in sight before spring or even summer. Instead they preferred to enjoy their Christmas vacation and purely by coincidence the S&P action came exactly 2 weeks before next summit would have promised some tackling of the growth problems. So perhaps without 2 weeks of vacation time they could have prevented a rating disaster, as lack of any credible growth perspectives is clearly pointed out as a major contributor in that latest judgment on most eurozone member states.
But that is just the latest chapter of EU politicians snail pace approach to a crisis of several dimensions. How many months have been lost since Greece first alerted its EU partners of serious public debt problems ? How many summits were there ? And what are the results ?
It seems the usual 'skills' of giving some statements with some empty words or ask questions is not enough to tackle the massive problems.
And even more revealing is how questions are being put ... that the one asking has obviously really no clue why the US, UK, and Eurozone are different or giving another clue: What is the big difference between the FED & the Bank of England vs the ECB ? Questions better put asked behind closed doors to economists than trumpeted out loud in public to the public.
[update Jan 17th]
if it is not much of a challange: (to ideology)
>>"...There are plenty of risks associated with sovereign currencies – devaluation and inflation being the most obvious – but default is not normally among them. If push came to shove, the government could always simply print money to repay its debts. These options are not open to France or other eurozone members.
The reason Denmark has a significantly lower bond yield than Finland, even though the two countries have roughly similar economic profiles and the Danish krone is pegged to the euro, is that Denmark can still print its own money. Investors know this, making it less subject to speculative attack."<<
source:
When, oh when, will Europe face the truth? (via @jeremywarnerUK)
[/update]
