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Fix Banks To Avoid Eurozone Meltdown, Imf Warns

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http://www.guardian.co.uk/business/2011/may/12/imf-eurozone-crisis-fix-banks

The International Monetary Fund has warned that the eurozone debt crisis could spread across the region unless European countries step up efforts to fix their banks.

In its latest economic outlook for Europe, the IMF said that the debt crisis in Greece, Portugal and Ireland could hit the wider eurozone by hitting bank lending and delivering a confidence shock, despite the rescue packages that are already in place.

"Financial linkages between countries with sovereign debt troubles and the rest of Europe could potentially pose more risk to the outlook," the IMF said on Thursday. "Restoring fiscal health, squarely addressing weak banks, and implementing structural reforms to restore competitiveness are key."

The Washington-based organisation stressed the importance of stress tests on banks, saying they are a key opportunity to force those found to be weak to raise new capital to bolster their finances. The European banking regulator is busy running a new round of stress tests and will publish the results in June. Tests conducted last year were regarded as too easy.

The IMF estimates that the eurozone will grow by 1.7% this year, the same as in 2010, and 1.9% next year, assuming debt crises don't derail the economy.

But the plan is to restore fiscal health by solving a debt crisis with more debt. Until there is either default or a repayment of the outstanding debt, fiscal health cannot be restored.

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http://www.telegraph.co.uk/finance/economics/8508940/UK-faces-strong-headwinds-from-Government-austerity-measures.html

The IMF praised the UK for taking steps to tackle it's debt mountain. In pointing out that fiscal consolidation plans by countries will only work if embedded in longer-term plans, the IMF said "Austria, France, Germany, Italy, and the UK have already elaborated specific consolidation plans beyond this year".

In the latest Regional Economic Outlook for Europe: Strengthening the Recovery, the IMF sees growth for all of Europe at 2.4pc and 2.6pc for 2011 and 2012 respectively, after 2.4pc last year.

However, it sees pressure in the immediate future from large rollover debt needs in both the banking and the sovereign sectors, even in the UK. Combined bonds due in 2011 amount to 10pc of GDP or more in Greece, Portugal, and Spain - double the 2007 amount. "Rollover needs have also increased significantly in Belgium, Ireland, and the United Kingdom", the report stated.

Looks like the ECB will be buying more bonds then?

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http://www.guardian....risis-fix-banks

But the plan is to restore fiscal health by solving a debt crisis with more debt. Until there is either default or a repayment of the outstanding debt, fiscal health cannot be restored.

"Extreme Twigging"? :P

'Fiscal' - from L. fiscus "treasury," origin 'basket made of twigs' (in which money was kept)," of unknown origin

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"Extreme Twigging"? :P

'Fiscal' - from L. fiscus "treasury," origin 'basket made of twigs' (in which money was kept)," of unknown origin

I love your posts, Erranta - just shows how little thought the rest of us put into our analysis and commentry on current affairs.

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http://www.telegraph...y-measures.html

Looks like the ECB will be buying more bonds then?

UK tackling its debt mountain??....I think we are just on the nursery slopes, still talking about what to do when we get to first base camp...still better to Jaw jaw than.........

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I love your posts, Erranta - just shows how little thought the rest of us put into our analysis and commentry on current affairs.

Cheers!

To 'clock' the masons - you just have to look at the 'origin'

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But the plan is to restore fiscal health by solving a debt crisis with more debt. Until there is either default or a repayment of the outstanding debt, fiscal health cannot be restored.

Don't be so silly, we could just devalue our currency until the debt isn't worth the price of a loaf of bread. Job done.

Better get printing Merv and maybe an interest rate cut too eh?

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http://uk.reuters.com/article/2011/05/12/uk-eurozone-idUKTRE7481OQ20110512

Despite bailouts for Greece, Ireland and Portugal, Europe's debt crisis may yet spread to core euro zone countries and emerging eastern Europe, the International Monetary Fund said on Thursday.

The warning came as government sources in Athens said international inspectors checking on Greece's compliance with its EU/IMF rescue package had found problems and were pressing for deeper spending cuts to cover a likely revenue shortfall.

A Reuters poll of investors and economists showed an overwhelmingly majority believe Greece will restructure its debt, possibly as soon as late this year. Most fund managers expect Athens to pay back less than half of what it owes.

......

"Contagion to the core euro area, and then onwards to emerging Europe, remains a tangible downside risk," the global lender's latest economic report on Europe said.

The core is under threat? I mean who could have predicted this?

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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