As you all already know, Europe is in a lot of trouble and going nowhere fast. I found this article: http://curiouscapitalist.blogs.time.com/2011/10/27/europe%e2%80%99s-new-debt-crisis-agreement-the-good-the-bad-the-ugly/#ixzz1bz684XXk that talks about the "good, bad, and ugly" aspects of the debt crisis agreement.
The European Union has seemed to have been putting off dealing with this problem for awhile. Members are getting nothing done by simply arguing and coming to no agreements each and every day. Major changes need to take place, but someone is going to have to be the bigger person and let there be progress. The good points from the negotiation this morning were that members are finally having a reality check and trying to make something happen. Steps being taken are increasing the fund's (ESFS) "capabilities by using it to guarantee private bondholders against losses on sovereign debt purchases".
The bad and ugly parts definitely outweigh the positive possibilities. Nothing is fully determined and nothing is very clear. The EU isn't sure that every member will actually help provide, which will only cause more problems. The bank recapitalization plan calls for banks to raise 106 billion euros in fresh capital, but that's not even half of what's needed.. so a temporary solution or stall. Also, after the bailout in Greece, there's no certainty of how much money will be left. As well as they will have major debt to pay off still.
The deal also includes trying to get money from China, which is completely desperate and pathetic. Just because they're doing well economically doesn't mean Europe can go begging for cash. Even if they did help it still would only be a tiny portion of the amount they need.
Obviously nobody knows all of the answers to solve such a crisis, even the top political members are still mind-boggled.
What do you think the missing pieces of the deal should include? Should China throw them some spare change to get them off their backs or leave them out cold?
I think part of their economy's inefficiency is in part due to the American economy. It seems that whenever we go down we take others down with us. This kind of bothers me about the global economy, that all nations don't work towards common prosper but they work for their individual prosperity. If all governments could work out a fair trade agreement then it would be similar to a "socialist" economy where all things are shared among all of the people which on paper makes enough sense, but in practice there is a disconnect.
ReplyDeleteTrying to get money, not just from China, but anywhere seems like a really bad idea. I feel that it doesn't matter how much money they have or are given, they just have a bad system and they need to deal with that first before trying to add more problems of debt into the stew.
ReplyDeleteGoing off of what John said about seeking individual prosperity.....yeah. Thats happening. You'd think being a part of the EU would make you want to help other countries within the SAME GROUP YOU'RE IN. I read somewhere that Britain is doing this. They're evaluating the risks for Britain pertaining to helping bailout Greece. Considering yourself? When you're group member is in trouble? I know it's "necessary" (or had become such) to keep the interests of the country in mind but it's still absolute garbage. Selfishness is spreading like the plague. They could at least help out a little! -.-
ReplyDeleteAlso, I think asking for money from China is just a bad idea. If they're already having money trouble, they don't really need any more.
Getting more and more loans from countries like China is just a bad idea. When has that ever worked for anybody? Like I said in another blog Europe needs to improve their tourism situation or move onto another way of making money.
ReplyDeleteThey don't just need money. They need a plan. If countries simply start pouring money into the European economy, they might reach a short term solution, but in the end things will end up right back where they started. What's more important is trying to map out a route to economic recovery and stability. If the EU can agree on an economic plan for all member countries to follow, then they can begin looking for money from somewhere else, and more countries will be willing to invest in them.
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