Financial alliance loophole

European leaders finally took the historic step, in a monetary union, and on the basis of financial alliance to build. On December 10, the euro zone countries and another 17 nine eu member states leader, signed in Brussels financial convention, in the "law enforcement framework", strengthen fiscal discipline, by depriving them of Europe's debt crisis, exciting market confidence. The summit is a few main arrangement as follows: 1) the governments promise balance budget every year, and structural budget deficit may not exceed 0.5% of GDP. 2) once a budget deficit of 3% of the red line break through, the government will be "automatic fine". 3) the European Union strict supervision and evaluation of the implementation of fiscal discipline, the European court also have forced perform. 4) European stability mechanism (ESM) to 2012 years earlier molding, the use of 500 billion euros stable market. 5) 10 days to confirm that central Banks provide up to 200 billion IMF bilateral loans, the IMF is responsible for the debt in the rescue effort. 6) give up PSI "voluntary debt reduction" approach of the creditors of the folk demanded by the IMF work principle.NBA Hats German chancellor Angela merkel says the plan as "towards stable alliance breakthrough step". French prime minister more freely, Europe to solid and comprehensive measures, to the world that the willingness and ability to solve the crisis. This is the European leaders for the fourth time in a year, the European debt crisis made an emergency rescue operation, each time is not "decisive" is the "final" scheme, every time to failed in greater danger. The author believes that, this time is no exception. To do him justice, this time the debt solution, and the past "instant gratification, JiaoTongYiJiao" different. Leaders tried to pass the alliance, monetary unification and solve the structural displacement between financial scattered, and under the framework of the constitution should be fixed. This kind of dislocation, in the past had brought the member states "to eat free lunch" mentality, lead to southern Europe debt jumped, and eventually a crisis out of control. However, financial alliance is not only financial discipline and punish system, more financial revenue must include multinational redistribution. This point in plan didn't mention. Europe's economic competitiveness is different, the growth rate is different, the tax rates and different tax efficiency. At the same time the welfare of all countries, the infrastructure spending is different, the economic cycle is different also, the natural financial status must be different. If not through the exchange rate weak nation to adjust economic power, in the long run, inevitable meeting produces structural budget deficit. Solution: or allow exchange rate adjustment, or power subsidies have-nots. The United States had thirteen states, each have each government, financial and monetary. When the national unity, finance ministers' Jefferson was arranged for the funds (payment transfer), economic strong state New York through the federal government subsidies to the funds on weak states LanNa card. Only so monetary unity and unity to maintaining the financial, economic balance to maintaining the. The United States is the federal state, the federal government has the ability and obligation, has the authority in the states make the necessary funds between deployment. But Europe was the confederacy, the European Union has no right to the funds on multinational transfer, and national politicians are voters elected by the country, the country is responsible for the taxpayer and taxes. The euro zone's long-term stability and balance, not a lack of money of the necessary deployment, or economic series but is talking. At present the European leaders seek financial series (actually just fiscal discipline), did not involve political unification, the exchange fund, and have no desire to the European Union and the euro zone will be promoted to the sovereignty of the federation of architecture. Other rescue plan details, more cannot afford scrutiny. EFSF is temporary arrangement, so ESM rolls out this as a permanent market intervention mechanism. But if 440 billion euros the EFSF solution ChongZhaiGuo funding costs high problem, 500 billion ESM can do nothing. France fear for direct market intervention and sovereign rating was downgraded, so countries paid 200 billion please IMF ACTS as the gunners, but this kind of how this trick could fool the world? In addition, the plan needs to after all the approval of parliament, this process in the possibility of had not small. As for the execution after, it is unknown. In fact the eurozone have early penalty clause, but no one to execute it. The European central bank put out a series of unconventional measures, to market and bank liquidity. But the European monetary authorities refused to direct, an unlimited, buy the pig debt unconditionally, debt will be changed. Keeps only save bank, do not save national debt.baseball sunglasses The central bank to bank provide liquidity, is normal. For profligate government check, they will encourage its inappropriate behavior, which eventually led to the currency issue out of control and inflation. The European central bank refused, in the author seems to meet the economics principle and regulatory standards. But not with the European central bank of your kind effort, European leaders even the stability of the next few months the debt markets do not do, let alone reconstruction finance mechanism, orderly dissolve the debt crisis. European financial integration put forward, is a progress, but the steps to realize this aim seems to be less clear. The author did not see clear road map of Europe out of crisis, also did not see the European bank debt crisis and a firewall between, did not see how to repair euro more political and economic interests mechanism of the dislocation of congenital defect. European heavy trapped crisis, is only a question of time.

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Developers don't expect next year will have significant policy adjustment