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Economists are forced to predict the prospects of the European bailout programme and the consequences of the financial crisis.People are diverging, and the Internet is full of analysis of the future of the eurozone.
What will be the direction of the economy?There are questions about Maria Karchilaki (the Greek journalist and the international news anchor for the local television station MEGA TV, and the foreign reporters abroad).And she responded that:
@karhilam : @efleischer I really don't know.But I am not optimistic.It's like a Katrina hurricane, and we're getting caught up in it.
Euro coins.The photo is from Civitars (CC BY-NC-SA 2.0).
The big banks in the euro zone have not passed stress tests. BNP Paribas reduces the exposure to public debt in Italy and Greece, as well as Royal Bank of Scotland , although it is clearly exposed to overflowability of liquidity .The risk reduction is being sought by the Belgian Bank of Dekshire, the German Commercial Bank, the Orient Banco Delta Asia, and the Hongkong and Shanghai Banking Corporation.
is planning to cut the budget deficit of one percent, Ireland intends to cut 100 billion budget expenditures, while the European Central Bank interest rate remains at 1.25 percent.At the individual level, people are less tolerant, and a Greek retired truck driver or even told the New York Times :
" I'm amazed that you have not burst into Congress to burn the politicians to the sousvlaki roast.
Before the resignation of Prime Minister Babendriou and former Italian Prime Minister Silvio Berlusconi, several journalists and Twitter users were asked, "Which way will the economy be headed in the next two months?"
Greek journalist Efthimia Efthimiou wrote:
@EfiEfthimiou : @efleischer … is now difficult to say.Every hour is changing …
Another journalist Yannis Koutsomitis responds:
@YanniKouts : @efleischer is likely to have political changes in the next few days, and should be able to stabilize the market for a while.But if the political turmoil in these countries continues, the eurozone's crisis is highly likely to lead to unpredictable consequences.
The situation is now moving in this direction: John Reed the Financial Times wrote to Italian tires manufacturers have considered a 10 percent drop in car sales, while truck sales dropped by 10 percent in the draft plan.This could be almost as serious as the collapse of Lehman Brothers (though they emphasize that it is only the worst assumption).
At the same time, on WikiLeaks, a 2010 secret electricity has started to investigate (if necessary) how to declare the Eurozone Part XI .
BBC Douglas Fraser Discussion What happens when member states default:
" If Greece, Portugal, and Ireland default, Germany's banks will have less than half of the buffer capital.Belgium is less than one third, with France and Britain less than a quarter. But there is an indirect impact, and interbank insurance and lending will erase all German banks' core-level capital. Belgium will have only seven percent, France's five percent, and Britain's 50 percent.The UK is particularly vulnerable to shocks from Ireland, while Royal Bank of Scotland and Lloyds Banking Group have already reduced their exposure to risk. What if you add Italy and Spain?This is a figure that makes people want to cry. In response to the direct impact, the German and French governments must recapitalization at 100 % of the current core capital of the bank, which is the nationalization of the banks. But the indirect impact will find a total of about 7.5 % of the core capital of Germany's banks, 170 % in Belgium, 200 % in France, and 130 % in the United Kingdom. At that time, German banks were only (hopefully) able to reach their own bailout terms, while other eurozone countries had to protect themselves.
In another Financial Times blog, Alan Beattie write :
If the European Central Bank is unable to ride out the bailout of Italy directly (the country's credit risk and lack of professional knowledge of borrowing conditions), theoretically, it can borrow a huge sum of money from the International Monetary Fund in accordance with Article 3 of the memorandum.
The International Monetary Fund will then be able to bail out Italy ( Megan Greene and The Economist think that it should be an "internal bailout" to some extent), and the final result — — does not appear to be better — all of this information — "
Paul Cunningham of the Irish TV console in an email replying to "Do you think the European Central Bank wants to encourage growth rather than austerity as a central bank?"" Problem with (via sender's consent)
The President of the New European Central Bank has shown that he is ready to take practical steps.The question is whether Draghi will find it necessary to prove to Germany, and to cut rates again in December if the inflation rate is more than two percent.At the first meeting, he decided to cut interest rates to show that he was able to make his own judgment.The debate over whether or not to raise rates at the outset would be a drag on many years. The bigger argument is the role of the European Central Bank, which looks like the new president will continue to buy bonds from the secondary market, but not to the extent of the crisis.There is no sign that Draghi is ready to make the European Central Bank a lender of last resort.In my view, to change that, only when Germany is changing, that is, if the situation continues to develop to German taxpayers, it will have to face the ultimate crisis — —
" If we stick to the principles of fiscal control, the euro will collapse.Before the European crisis was resolved, it was often seen to be a risk.It seems that this time, Germany is at the edge of a cliff — if the euro disintegrates, restoring the use of Deutsche Mark, Germany's economy will face a crisis immediately.When their export goods have soared as a result of their shift to Mark, who will buy them? Soon, the principle of adherence to the principles will directly conflict with the real problems posed by unstable bond markets."
Author: Evan Fleischer
Translator: Hsu-Lei Lee