Bailout Fund Is No Golden Bullet - Ecb's Ewald Nowotny

[interestrateripoff]

http://uk.reuters.com/article/2011/03/19/uk-ecb-nowotny-idUKTRE72D3NO20110319

The bailout fund for European states is not the answer to their problems, European Central Bank Governing Council member Ewald Nowotny said, urging troubled countries to get their budgets in order.

"No one should claim that we have a crisis of the euro," he told Austria's Kleine Zeitung in an interview published on Saturday.

"We have crises in member states -- whether through too low productivity, too high debt or in the banking system -- and these will not be solved through the bailout fund."

Nowotny was asked whether the alternative should be to kick countries such as Portugal and Greece out of the euro zone.

"No way. The result would be this: There would be a run on the banks in those countries, the exports of these countries would become more expensive and we would make the single market even weaker," he said.

"They must get their budgets in order. And if their bonds are risky, then they must pay higher rates for them ... Countries must commit to transparency and give up their egotism."

I think he means Germany's exports to them will become more expensive. Why would the PIIGS currencies appreciate against the Euro.

[mattyfc]

http://uk.reuters.com/article/2011/03/19/uk-ecb-nowotny-idUKTRE72D3NO20110319

I think he means Germany's exports to them will become more expensive. Why would the PIIGS currencies appreciate against the Euro.

At least he seems to have realised the bailout is only a stop gap solution. The ECB should pick up a history book to see what happens when debt private / public debt reaches the levels it has done in Ireland, Greece, Portugal and Spain.

The only historical way these crises have been solved is with debt restructuring and massive devaluation.

By enforcing austerity the problem gets worse. How do the ECB expect these countries to grow and create jobs? Have they not seen the unemployment / jobless claim numbers from Spain, Ireland & Greece recently.

The likely outcome of current policy will be an overthrow of the governments by anti austerity parties. Restructuring will be forced on to the core whether they like it or not. Could be real ugly over the next few years.

[oracle]

At least he seems to have realised the bailout is only a stop gap solution. The ECB should pick up a history book to see what happens when debt private / public debt reaches the levels it has done in Ireland, Greece, Portugal and Spain.

The only historical way these crises have been solved is with debt restructuring and massive devaluation.

By enforcing austerity the problem gets worse. How do the ECB expect these countries to grow and create jobs? Have they not seen the unemployment / jobless claim numbers from Spain, Ireland & Greece recently.

The likely outcome of current policy will be an overthrow of the governments by anti austerity parties. Restructuring will be forced on to the core whether they like it or not. Could be real ugly over the next few years.

at least he is honest!

so what about the "transparency" bit of trying to enact the financial warfare bit in mein kampf?

no particular surprise with germany "abstaining" from the stuff in libya.

the gameplan is now very,very obvious.

financial and military terrorism by proxy versus those who oppose the fourth reich.....with the ones sitting on the sidelines waiting to mop up after.

this is supposed to involve russia at some point(to completely cripple us),,,,,,but they really ought to be aware there are a few russians who know what's up.......they might not end up going quite as full-on as the fourth reich would like.

...and at some point combine with what is left of the french/brits/yanks to cause some real problems.

Edited March 20, 2011 by oracle