Europe Debt Crisis Escalating and Prospects Still Not Optimistic
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With the escalating debt crisis in Europe, in addition to efforts to reform the aid mechanism, the EU President Rompuy December 19 that the EU proposal, if the member states ignore the address economic imbalances, will impose illegal state GDP, a fine of up to 0.5%.
The sanctions proposed by the European Union's "first phase" is the central bank and other organizations to pay interest and no pre-deposit interest rates, followed by GDP of the country may impose a 0.2% | 0.5% of the fine. The EU will develop multiple indicators to show a country's economic problems may arise and will be reviewed in March 2011. Ignore recommendations on the correct country be punished immediately.
The European Union on Friday after the summit, the EU Council did not announce any new proposals, but on a par for a permanent mechanism for European stability (ESM) to reach an agreement.
This will be a permanent mechanism for the overall stability as the euro area threatened by the risk event, by all euro area member states agreed to the activation. The mechanism will be under strict conditions of euro zone countries to the troubled loans.
At the same time, the ECB said it would nearly double the size of its capital to 10.76 billion euros, in response to greater credit risk and market volatility situation. European Central Bank decided to increase the subscribed capital of the Member States, which is the euro since the ECB was established 12 years, the first replenishment of the action.
It should be noted that the EU leaders summit declaration promised to "do everything we can to ensure the overall stability of the euro area", so as to future policy action to further open the door.
Still optimistic about the prospects
However, the powers Germany, France and other euro-zone is not in favor of short-term crisis response mechanism to modify the European Union, EU leaders are still huge differences within, the key issues are still unable to reach agreement on the summit.
In order to contain the crisis spread to Spain and even Italy, including the European Central Bank President Jean-Claude Trichet and International Monetary Fund (IMF), the principal officials, including President Kahn has repeatedly called on the EU response to the crisis to take more decisive measures, such as expanding the current European Union EFSF scale relief mechanism, and the pan-European bonds, "European common bonds."
Moody's said on Wednesday may be down the Spanish sovereign debt rating, a move that exacerbated the crisis of European sovereign debt market from those with smaller economies, the larger euro area financial pressure gradually spread to the larger member economies (such as Spain, Italy) concerns.
Although EU leaders vowed, but analysts are not optimistic. Morgan Stanley in December 17 that a study released in Europe just to the debt crisis beginning: "From the beginning of Greece to the nearest Irish, European sovereign debt crisis is only the periphery, gradually spread and eventually spread to the core the beginning of the country, because these countries have the euro area's fiscal deficit is too large and too fast growth rate while the national debt, and 17, the end of the EU summit can not change this situation. " |
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By :
Jessie Stone
Submitted
2010-12-25 03:34:22 |
Article From Article Mayhem
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