British Prime Minister’s visit to Germany, Angela Merkel: “European countries will share weal and woe”, 2011, Berlin, November 18, in addressing the debt crisis in Europe, Germany and the UK’s foreign made “partners” attitude. In and visiting British Prime Minister David Cameron, after meeting German Chancellor Angela Merkel, 18, emphasized here, she and Cameron made the same, will be at the next EU summit, the common implementation of the euro’s stability mechanism to seek a solution.
Germany, the relationship between the United Kingdom, over a period of time – British Prime Minister, dealing with public criticism of Germany’s euro crisis in some of the practices, the two media, freedom of speech.
Cameron visit in Berlin before the German Finance Minister Schäuble again mentioned in public – in the European context, the implementation of financial transactions tax, that all commercial activity, must pay sales tax, the implementation of financial transactions tax, is a matter of course. Fearing the financial transaction tax on the domestic financial and economic impact, the UK has opposed the proposal.
And Cameron met with reporters in common when it comes Merkel specially friendly relations between the United Kingdom, Germany, said: There are two common beliefs to the success of Europe, although there are differences between the two countries, “but I think that Europe can only way to survive , that is, all power, mutual, understanding. ” “If David and I work together to solve the problem, then we can also find a solution.”
Cameron said that Britain as a commercial nation, though, is not a euro member states, but, positive action in Europe, because the stability of the euro area is related to the UK and European markets.
Cameron suggested: Eurozone treasury should implement a similar rule, so as not to appear again in the future currently such a serious debt crisis. Euro countries should unite to show the outside world to solve problems and prospects of the determination, and made a competitive program.
In this regard, Merkel reiterated that the change “EU Treaty” issue, the euro zone has appeared in more than 60 violations of the Stability Pact events, so the EU needs more power, urging governments to fulfill their obligations, but the current EU treaty , which limits a lot.
Merkel stressed that all EU-27 the importance of solidarity. She said that currently, international, are really concerned about the unity of Europe? “We will share weal and woe, because we know that if you do not, Europe has 70 million people in a world in which no future.” (End)
After Italy, France, “occupied”? November 19, 2011
French President Nicolas Sarkozy, the fear of losing AAA sovereign debt rating.
S & P rating error tone directed at the French core area of the euro, the euro is a typical U.S. stress tests
Debt crisis in Europe, after Italy, who will be the next?
November 10, the international rating agency Standard & Poor’s suddenly part of the user to send e-mail said, France has reduced the highest AAA rating, the market panic.
Two hours later, Standard & Poor’s suddenly clear: the technical errors caused by false positives, false S & P down storm, the French government was furious and ordered an investigation. Of the French government, under pressure, this “error”, intolerable, but the market, this “error”, in fact, does not matter. Because, in the eyes of many investors and economists, the French long-term credit rating is no longer the best AAA.
Recently, the French “Le Monde” reported the title, it is particularly shocking – “Greece and Italy, the French?”
“False down”, reflects the plight of France
“Even if the Standard & Poor’s human error, but why the French do?” An analyst’s question, get a lot of resonance, that the S & P move, thought-provoking.
British “The Times” has quoted the Ministry of International Studies, Bank of America Merrill Lynch investment strategist John Rehn as saying, “If Italy finished, it will the French get involved, this is a terrible thing.”
French banks have a large stake in the Bank of Italy, and Italy established a large network of branches, Bank of France holds a huge debt of Italy, the Italian crisis, will have an impact to the French financial system, a tremendous impact on France. .
Prior to that, by the debt crisis, the profitability of French banks, has fallen sharply. Recently, Paris, France Bank, Industrial Bank, Agricultural Credit and Savings Bank Group, the French people, were published three quarterly. Quarterly, the third-quarter net profit of the four major banks, plummeted to 24 million euros (1 euro, or about 8.54 yuan), last year over the same period, the profitability of the four banks, close to 70 billion euros, bank profits decline surpassed 30 percent.
International credit rating agency Moody’s, in September, has cut two French banks Societe Generale and Credit Agricole ratings, on 17 October, Moody’s issued a warning: the next three months, it is possible to put the French sovereign credit rating negative watch list.
French is Italy’s largest creditor, according to data published by the Bank for International Settlements, as of the end of the second quarter of this year, the French banking holding Italian debt exposure (Note: the risk of exposure, is the default behavior of the debtor, may lead to bear the risk of credit balance.) to 410.2 billion euros, more than double in Germany. With the debt crisis of the Italian fermentation, the French 10-year Treasury yields last week, more than 3.4% (higher rate of return means that the higher the French debt issuance costs), representing a 10-year bond yields in Germany, 168 basis points higher , the highest since the advent of the euro, a record high.
European Bank for Reconstruction and founder Yake A Tully commented that, from the French and German 10-year yield spreads of view, the French credit rating is not AAA.
French Foreign Trade Bank Chief Economist Patrick A Curtis, said in October this year, according to Standard & Poor’s rating model, and the French official public data, only the French credit rating AA. At present, the rating agencies generally do not cut the credit rating of France, may be that the French government in the short term, on some issues to fix. This time, the S & P rating error down France, the French media in general, this is not a small incident that is being studied to Standard & Poor’s downgrade of France.
European debt crisis, like a long series, every country in crisis, all from the beginning of the credit downgrades.
“Financial Times” article said that French President Nicolas Sarkozy are most worried about the loss of France’s AAA sovereign debt rating.
Singapore’s “Lianhe Zaobao” said, “Once the French AAA credit rating cut, which will be ready in six months, for re-election of President Sarkozy, leaving in disgrace; been trying to save the euro for the EU leaders is also will be a major blow. ”
“Landlord, there is no surplus of”
French “Le Monde” in order to “Greece and Italy, the French?” In the title of the report, listed a chart contrasting: € 1.9 trillion of debt in Italy, France, the debt of 1.7 trillion euros, the European Relief Fund much smaller than the two figures.
Yake A Tully in his new book “State of the bankruptcy,” he wrote: “Because he is the ruler, so that every French citizen, owes the state creditors, the debt is equivalent to their nine-month earnings.” Atta Lee warned: “Western countries going bankrupt.”
Indeed, the French came today, with Greece, Italy, Southern Europe and other countries, even with America’s problems are similar. Over the past few decades, some European countries, everyone wants high wages, high benefits, but also more vacation, less work, and hope that the Government paying less tax, to develop the borrowed money on consumption.
“Europe, a low interest rate, even if the maturity of the debt, it does not matter, by refinance old debt, so debt snowball.” Royal Bank of Canada senior risk management consultant, “who is rich to finance” the authors said Chen **, European governments in order to meet the needs of voters, the central bank continued to reduce interest, easy credit to encourage consumption, which not only improves the performance of GDP growth, voters had to heaven like a good life, happy. However, to support such a way of life, only one, that is, there must be people willing to borrow money for their consumption.
Substantial expansion of the European debt, budget, an enormous amount overruns, the fiscal deficit increased year after year. It is not difficult to understand why the Greek involvement in the debt crisis, the euro-zone countries will be like dominoes, one by one down. That the Italian crisis, followed by the European media speculation, who is next?
France’s economic data, it had to wonder about – the fate of Europe’s great powers: report under the Bank of France, the French third quarter GDP growth rate of 0.1% is expected in the fourth quarter of zero growth. Debt remains high, economic growth has stalled, France solvency fiasco.
France currently, there are virtually no solution, because the aging population there is no effective policies to alleviate. The United States can rely on its strong military power, and financial hegemony, to ease their debt problems. However, for the European countries except Germany, if not find effective strategies and methods, it is difficult to avoid the sovereign debt crisis.
As the euro zone’s second largest economy, France, in the past, has been the main sponsor of the European financial stability mechanism, one of today, the French trouble, it was found that these funding poor countries rich, in fact, is “too clay Buddha Jiang. ” “Landlord, there is no surplus, which have money to lend to poor countries it?”
Europe will not let France fall
European monetary unification, the euro area fiscal policy has not achieved unity, monetary and fiscal linkage is, when a country’s debt, up to a certain extent, the interest rate and exchange rate will change accordingly, for example, interest rates rise high, the currency devaluation.
Now, the entire euro zone single currency, which means that when a single national debt is too high, and will not cause the rise in interest rates or currency devaluation, which is the lack of appropriate market response. The only response is that bond yields, which is to the last crisis, it appears the response, can not play the early warning mechanism.
Countries in the face of economic crisis, devaluation of the currency can promote economic growth, thereby increasing revenue, through the crisis, but European countries do not have such measures, the EU member states have lost the use of monetary policy to stabilize economic fluctuations of the tool, only by their own fiscal policy to deal with economic problems, which increased the difficulty of crisis management.
Euro like “Father of Euro” Mundell mind, independent of the state “ideal currency” the euro in nominal terms is more than the country’s credit, the individual rationality, leading to the body of the non-rational, fundamentally, lack of a solid and stable basis of credit. Together with the Member States within the euro area, there must be a huge difference in wage levels, social security and fiscal and taxation system, these problems in the foreseeable period of time, can not be resolved. Euro in the event of crisis, the financial non-uniform countries across Europe, will continue to fall into a recession, unable to rescue the state.
Birth of the euro, the dollar has become a serious threat with enormous challenges, the U.S. has never abandoned the strategy to suppress the euro.
S & P rating error tone France, directed at the core of the euro area, the euro is a typical U.S. stress test.
Determine the fate of the French initiative clearly rests in the hands of the United States, the United States to defeat the euro, will have to hype the debt crisis in France. As for the euro in the end when it died, it depends on the Americans. Mainly by France to promote the birth of the euro, if you do not set up the European Central Bank and the euro, Germany would dominate Europe by virtue of the strength of national financial and monetary policy, the German mark will become Europe’s leading role in the currency, currencies of other countries will be the German mark as the anchor. The establishment of the euro by the French to contain the expansion of Germany’s financial powers, France fell to Germany to prevent the economic vassal state.
France has a decisive effect on the euro, the French fall, will mean the end of the euro.
The euro is the end outcome will not occur.
This time, the euro sent technocrats Monty took over Italy, stated that the European will be striving to maintain stability of the euro.
Now, we often just say harm the euro, the euro has brought benefits to the European countries, such as Germany to become the fastest growing national economy, also depends on the neighboring countries of food, raw materials supply. The outcome of the euro, we can not play, do not pay back the money, not leaving the euro, but to enforce the austerity policy, then, voters impress.
If the European crisis, to a certain extent, the European Central Bank will restart the bond purchase plan, which is printed by the European Central Bank member countries to buy euro bonds, so the debt will solve the situation in France, the euro will not collapse.
Major countries in the euro area of outstanding debt
State debt outstanding (million euros)
Note: The national debt for the Reuters data released in July this year, U.S. $ 1 = 0.7438 euros conversion.