Thinking the Unthinkable in Europe
Kidnapping the world with a structured and well planned financial crisis?
------------------------------------------------------------------------------------------------------------------------------- Thinking the Unthinkable in Europe ------------------------------------------------------------------------------------------------------------------------------- Measures will have to be taken to prevent a financial meltdown in the eurozone as a whole.
First, bank deposits must be protected.
At the same time, the European banking system would have to be recapitalized and put under European, as distinct from national, supervision.
Finally, government bonds issued by the eurozone’s other deficit countries would have to be protected from contagion.
The last two requirements would apply even if no country defaulted.
So there is no alternative but to create the missing component: a European treasury with the power to tax and, therefore, to borrow. This would require a new treaty, transforming the European Financial Stability Facility (EFSF) into a full-fledged treasury.
The euro exists, and the global financial system’s assets and liabilities are so intermingled on the basis of the common currency that its collapse would cause a meltdown beyond the capacity of the German authorities – or any other – to contain. The longer it takes for the German public to realize this cold fact, the higher the price that they, and the rest of the world, will have to pay.
George Soros is Chairman of Soros Fund Management and of the Open Society Institute.
http://www.project-syndicate.org/commentary/soros71/English
------------------------------------------------------------------------------------------------------------------------------- George Soros: How to Avoid a Great Depression ------------------------------------------------------------------------------------------------------------------------------- Soros shares four policy measures recommendations, as shared by CNBC.com, to help with this European financial crisis:
Bank deposits have to be protected to prevent bank runs in weaker states;
Some banks in the defaulting countries have to be kept functioning to keep their economies afloat;
The European banking system would be recapitalized and put under European-, as distinct from national-, supervision;
Government bonds of other deficit countries would have to be protected.
Soros says that the breakdown of the euro, thorough all of this, must be avoided. The euro is a common currency among many countries and its breakdown would “…cause a meltdown beyond the capacity of the authorities to contain.”
http://www.wealthwire.com/news/economy/1861
------------------------------------------------------------------------------------------------------------------------------- George Soros & Nouriel Roubini: Greece Should Default ASAP ------------------------------------------------------------------------------------------------------------------------------- The infamous economist Nouriel Roubini told the Financial Times that it'd be best for Greece to return to its previous currency: the drachma. Without any other viable solutions, Greeks runs a cyclic case of insolvency and will only plummet further into depression.
Billionaire hedge fund investor George Soros seconds Roubini's notion:
"The lack of a central European treasury has too often made state-by-state solutions to the crisis a day late and dollar short. "No concessional [borrowing] rates for Italy or Spain and no preparation for a possible default and defection from the eurozone by Greece" have made the crisis increasingly intractable. Added to that, the Germans have declared the European Financial Stability Facility to be unconstitutional."
Currently, the Greek public debt is close to 200 percent of the country's entire gross domestic product.
http://www.wealthwire.com/news/economy/1885
------------------------------------------------------------------------------------------------------------------------------- Thinking the Unthinkable in Europe ------------------------------------------------------------------------------------------------------------------------------- Measures will have to be taken to prevent a financial meltdown in the eurozone as a whole.
First, bank deposits must be protected.
At the same time, the European banking system would have to be recapitalized and put under European, as distinct from national, supervision.
Finally, government bonds issued by the eurozone’s other deficit countries would have to be protected from contagion.
The last two requirements would apply even if no country defaulted.
So there is no alternative but to create the missing component: a European treasury with the power to tax and, therefore, to borrow. This would require a new treaty, transforming the European Financial Stability Facility (EFSF) into a full-fledged treasury.
The euro exists, and the global financial system’s assets and liabilities are so intermingled on the basis of the common currency that its collapse would cause a meltdown beyond the capacity of the German authorities – or any other – to contain. The longer it takes for the German public to realize this cold fact, the higher the price that they, and the rest of the world, will have to pay.
http://www.project-syndicate.org/commentary/soros71/English
------------------------------------------------------------------------------------------------------------------------------- George Soros: How to Avoid a Great Depression ------------------------------------------------------------------------------------------------------------------------------- Soros shares four policy measures recommendations, as shared by CNBC.com, to help with this European financial crisis:
Bank deposits have to be protected to prevent bank runs in weaker states;
Some banks in the defaulting countries have to be kept functioning to keep their economies afloat;
The European banking system would be recapitalized and put under European-, as distinct from national-, supervision;
Government bonds of other deficit countries would have to be protected.
Soros says that the breakdown of the euro, thorough all of this, must be avoided. The euro is a common currency among many countries and its breakdown would “…cause a meltdown beyond the capacity of the authorities to contain.”
http://www.wealthwire.com/news/economy/1861
------------------------------------------------------------------------------------------------------------------------------- George Soros & Nouriel Roubini: Greece Should Default ASAP ------------------------------------------------------------------------------------------------------------------------------- The infamous economist Nouriel Roubini told the Financial Times that it'd be best for Greece to return to its previous currency: the drachma. Without any other viable solutions, Greeks runs a cyclic case of insolvency and will only plummet further into depression.
Billionaire hedge fund investor George Soros seconds Roubini's notion:
"The lack of a central European treasury has too often made state-by-state solutions to the crisis a day late and dollar short. "No concessional [borrowing] rates for Italy or Spain and no preparation for a possible default and defection from the eurozone by Greece" have made the crisis increasingly intractable. Added to that, the Germans have declared the European Financial Stability Facility to be unconstitutional."
Currently, the Greek public debt is close to 200 percent of the country's entire gross domestic product.
http://www.wealthwire.com/news/economy/1885
