"Orderly State Insolvency"

[WhiskeyGirl]

Meanwhile, George Osborne, the Chancellor, will have further meetings with other European finance ministers today. Wolfgang Schäuble, the German Finance Minister, is to present a nine-point plan aimed at avoiding a repeat of the fiscal crisis sparked by Greece’s budget deficit. The proposal includes calls for faster budget cuts, tougher penalties for countries that flout the rules and the option of an “orderly state insolvency” for euro countries.

more here - http://business.timesonline.co.uk/tol/business/markets/article7132656.ece

What would an orderly state insolvency look like for California?

The US?

[WhiskeyGirl]

EUOBSERVER / BRUSSELS - EU finance ministers and treasury officials are gathering in Brussels on Friday (21 May) to debate tighter co-ordination of fiscal policy in the wake of the Greek debt crisis.

The German plan envisages a new body to "rigorously" examine national stability programmes, a job previously done by the European Commission. "The examiner could be the European Central Bank, or a specially appointed group of independent research institutions," Berlin said.

Expansion of the Federal Reserves powers to take down states?  Bailout debt ridden states like California?

Mr Schauble's plan does not speak of Germany's previous ideas on creating a European Monetary Fund to save countries at risk of bankruptcy or of measures for insolvent states to exit the eurozone. It says instead that "a procedure for orderly state insolvencies will have to be an integral part of any fixed crisis-resolution framework for the euro area."

"It is a very difficult question how to define insolvency for a member state of the eurozone. So far, I haven't seen any convincing model, but we need one. That is why we put it on the agenda of the task force," Mr Schauble told reporters in Berlin on Thursday.

more here - http://euobserver.com/9/30118

[WhiskeyGirl]

Berlin wants a “leaner-meaner” stability pact. This would include faster sanctions against governments that break the rules, a focus on state indebtedness and leverage in the governance system to allow a more “open-ended” discussion on a country’s prospects.

The plan calls on the European Commission to be more direct in its routine assessments of the member state economies, and says the ECB should carry out a parallel examination of their fiscal position. The plan also says that national parliaments should be brought into this process, saying the parliamentary prerogatives should not be undermined.

If high deficits imply fiscal pressure, the drawback in the suspension of structural funds is that it could worsen a country’s economic position. The same concern surrounds the second-stage sanction: the cancellation of structural funding rights.

However, it is the third and fourth-stage sanctions that are most controversial. For countries who refuse or cannot quickly make fiscal amends there would be a suspension of their voting rights when EU finance ministers meet.

How would this work in the US?  No state highway, welfare, or other monies, until your state conforms to economic standards?

If Washington suspended all funds to California, no qualification, no money in waiting, would that be enough incentive to get their house in order?

The Germans also ranked high among the EU states who spurned the commission’s demand for new borrowing powers in any new general rescue fund.

Is this a problem in the US?  Washington and the White House has too much power to borrow money?  The Federal Reserve has too much power to print money, and give it out willy-nilly without oversight?

Who's doing the business of 'We the people'?

more here - http://www.irishtimes.com/newspaper/finance/2010/0521/1224270806151.html

Why not take Washington and the White House out of the financial equation?

Let local taxpayers determine spending, taxation, and debt?  Prosperity and job creation?

Where's that comprehensive robust audit of the Federal Reserve?

[WhiskeyGirl]

Mr Schauble meets his 15 eurozone counterparts in Brussels today and will present a "nine-point plan" to prevent future fiscal crises. The plan includes faster budget cuts, tougher penalties for eurozone countries that flout rules, and the option of an "orderly state insolvency", analogous to the "living wills" regulations for the big banks.

more here - http://www.independent.co.uk/news/business/news/merkel-begs-g20-to-speed-up-reform-as-markets-fall-1978854.html

To save the Euro, faster budget cuts, tougher penalties, orderly state involvency...

Super Obama keeps spending, printing money, borrowing, and bailing out everyone...except common people on Main Street.

No jobs for Americans - is the balanced approach to global growth.

[WhiskeyGirl]

"A country which does not handle its public finances prudently will find its long-term borrowing costs adjusted accordingly," Sir Martin predicted. "Although theory says that default is unlikely, nevertheless, a country that spends too much public money, and allows its wage costs to become uncompetitive, will experience rising unemployment and falling economic activity. The social costs may become impossible to bear."

As for the United Kingdom, we must be grateful that those frightfully clever Europhiles, such as Lord Mandelson and Kenneth Clarke, did not get their way. Had they been able to scrap the pound and embrace the euro this country would be even closer to ruin. Without a flexible currency, the colossal deficit clocked up by Mr Brown would have crushed us completely. We have little to thank him for, but it would be churlish to deny that his decision to reject Tony Blair's blandishments in favour of the euro was a life-saver.

Sterling's devaluation has not been pretty, but it is helping to keep our exports competitive while the coalition Government begins rebuilding the nation's finances. Siren voices from across the Channel, calling for closer integration between Britain and the rest of the EU, can be confidently rejected. As for joining the euro, I find it impossible to imagine any circumstances under which it would be in the UK's interest to do so.

more here - http://www.telegraph.co.uk/finance/comment/jeffrandall/7746806/Whatever-Germany-does-the-euro-as-we-know-it-is-dead.html

Will Obama answer the siren's voice for one global finance?  One global central bank?  Global balanced development and rationing of jobs? 

[WhiskeyGirl]

But a closer reading of what Merkel has said on the matter suggests something more significant is going on. In language more confrontational than any yet used by European leaders, the chancellor first pointed out she wanted to "ensure that banks cannot extort the state anymore". Extortion is a strong word in any language, but reflects mounting anger over the way financial markets have emerged from the world's three-year banking crisis with an even greater hold over nation states than when they went in. The unspoken threat is that Europe's biggest economy has had enough and is preparing to take its ball away.

more here - http://www.guardian.co.uk/business/dan-roberts-on-business-blog/2010/may/19/viewpoint-german-short-selling

Why isn't Super Obama battling the banks?  Giant hedge funds?  Speculators?

Why does it seem like Super Obama got an 'attaboy' from Wall Street?

How many more times will taxpayers hear 'we need a $$$ for TARP, TARPII, TARPXI?

How much more will the Federal Reserve dole out to anonymous banks and special interests?

When will Americans find out what the Fed does with all their money?