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It's us who decide, not Monsanto!!!

Wednesday, May 12, 2010

Greek show - is it over? 05.2010

As you know the crisis in Greece was number one on the news for a long while. It was partly overshadowed only by the Oil Spill, but only that much. So I had to comment it here as well.

I pasted parts of two of the most interesting articles I found so far.
  1. Greek Debt Woes Ripple Outward, From Asia to U.S.
  2. E.U. Details $957 Billion Rescue Package
First of all, I'd like to comment the Greek riots. I'm sure everybody heard already about the great social benefits Greek people enjoyed in recent years. I wouldn't even call them social - it's social to give when you have. It's theft to give when you don't have. And this is what happened, the Greek people collectively robbed the Greek state. And now, when the situation got beyond control, they are angry. They claim it's not them who should pay but the "rich people" whoever those rich people are. I'm sure that rich and poor, everybody in Greek got whatever they could from their horribly governed stated. I find this hypocritical. And the riots, I find extremely ugly. Because they show young people out of control, aggressive to the policemen, aggressive to everyone. Blaming the EU for the conditions they imposed on them. When they can blame only themselves, because in democracy, it's people who are supposed to control what's going on in their government. If the rulers steal, then it's responsibility of the people to remove those rulers. I'm completely aware that it's not the way it happens in most cases, but whose fault is this? We in Bulgaria allow our rulers to do as they like. In result, we live in misery. But nobody's rioting. It's our fault, we accept it and move on. Or at least for the moment it is like that. The national apathy is beyond the scope of this post :)
So, on the social side of the problem, I can only say - people, are you crazy? If the EU don't give you money, you'll end up starving. The prices of land will fall and foreigners will simply buy Greece! Is this what you want?
Moving on to the amazing deal the EU made on 9th of May - the Day of the EU! You can read the details in the articles, but in short - they will make appr. 600 billions of euro available for saving states in problem. The European Central Bank will buy national bonds to help dying finances. And Greece will have the money they need. Unfortunately, the IMF will be a side on that deal.
Now, what bothers me. First, the IMF. Why should they give us money? What the fuck means that they will give one euro for two?! That doesn't sound good at all. It sounds like Europe will have to pay for the whole crisis to me by effectively printing off money for USA. Well, that's not FAIR. Especially not when EU countries have the money and the power to do that by themselves. They just don't want to. They don't want to do it, because they are too busy with their internal games! Is this what the idea behind the EU? Isn't it time we all play for something bigger? I'm not anti-nationalist, not in the least. I love my country much more than its government loves me. But sometimes one has to give something up in order to win a big time. And in the case, Europe should have fought as a whole. Sure, some may argue that it's what we're doing. No, we're not. We're not sacrificing our national interests for the sake of the EU, we're sacrificing them for the sake of USA. And that's so utterly wrong.
If you think I'm over-reacting on the USA-link, read the first article and/or the links on the bottom. Obama actually called Merkel, because he was worried. Of course, he has to be worried, because the world is too globalised to believe that one continent can suffer and others to thrive. The problem isn't that he's worried. The problem is that the IMF pressured on the EU. Just like in the case of GMOs. They told us to approve them and that was it. The long resistance of Europe against the GMOs was over. And now, Obama called Merkel to tell her the show must be over and the show was over. Sure, he was right. But he shouldn't mess with EU decisions. We had to learn our morale alone. Now, the moral is lost. Lost behind the big numbers and the unknown conditions under which they will be given. And the shadow of the IMF. I can't but wonder why a French man is on top of an american organisation as the IMF? Isn't it odd? I find it is.
Anyway, I'll finish by saying that I hope that those money won't be wasted but will serve all European nations for a good lesson. And the lesson is clear - in an Union nothing can remain hidden for a long time and nothing can remain isolated. We are one and we have to start living as one.

Greek Debt Woes Ripple Outward, From Asia to U.S.

What was once a local worry about the debt burden of one of Europe’s smallest economies has quickly gone global. Already, jittery investors have forced Brazil to scale back bond sales as interest rates soared and caused currencies in Asia like the Korean won to weaken. Ten companies around the world that had planned to issue stock delayed their offerings, the most in a single week since October 2008.

The increased global anxiety threatens to slow the recovery in the United States, where job growth has finally picked up after the deepest recession since the Great Depression. It could also inhibit consumer spending as stock portfolios shrink and loans are harder to come by.

“It’s not just a European problem, it’s the U.S., Japan and the U.K. right now,” said Ian Kelson, a bond fund manager in London with T. Rowe Price. “It’s across the board.”

The crisis is so perilous for Europe that the leaders of the 16 countries that use the euro worked into the early morning Saturday on a proposal to create a so-called stabilization mechanism intended to reassure the markets. On Sunday, finance ministers from all 27 European Union states are expected to gather in Brussels to discuss and possibly approve the proposal.

If the anxiety spreads, American banks could return to the posture they adopted after the collapse of Lehman Brothers in the fall of 2008, when they cut back sharply on mortgages, auto financing, credit card lending and small business loans. That could stymie job growth and halt the recovery now gaining traction.

Some American companies are facing higher costs to finance their debt, while big exporters are seeing their edge over European rivals shrink as the dollar strengthens. Riskier assets, like stocks, are suddenly out of favor, while cash has streamed into the safest of all investments, gold.

Just as Greece is being forced to pay more to borrow, more risky American companies are being forced to pay up, too. Some issuers of new junk bonds in the consumer sector are likely to have to pay roughly 9 percent on new bonds, up from about 8.5 percent before this week’s volatility, said Kevin Cassidy, senior credit officer with Moody’s.

Over all, United States banks have $3.6 trillion in exposure to European banks, according to the Bank for International Settlements. That includes more than a trillion dollars in loans to France and Germany, and nearly $200 billion to Spain.

What is more, American money-market investors are already feeling nervous about hundreds of billions of dollars in short-term loans to big European banks and other financial institutions. source

E.U. Details $957 Billion Rescue Package

BRUSSELS — European leaders agreed on Monday to provide a huge rescue package of nearly $1 trillion in a sweeping effort to combat the debt crisis that has engulfed Europe and threatened markets around the world.

In an extraordinary session that lasted into the early morning hours, finance ministers from the European Union agreed on a deal that would provide $560 billion in new loans and $76 billion under an existing lending program. Elena Salgado, the Spanish finance minister, who announced the deal, also said the International Monetary Fund was prepared to give up to $321 billion separately.

Officials are hoping the size of the program — a total of $957 billion — will signal a “shock and awe” commitment that will be viewed in the same vein as the $700 billion package the United States government provided to help its own ailing financial institutions in 2008.

Underscoring the urgency of the situation, President Obama spoke to the German chancellor, Angela Merkel, and the French president, Nicolas Sarkozy, on Sunday about the need for decisive action to restore investor confidence. And in a sign of the spreading anxiety, the United States Federal Reserve, along with the European Central Bank and the central banks of Canada, Britain and Switzerland, announced the establishment of instruments known as swap lines. The swaps are intended to ease pressure on European banks and money markets by providing more liquidity.

In addition, the European Central Bank announced after the deal was completed that it would intervene in the government and corporate bond markets, also to provide liquidity.

The actions by the United States represented significant concern that the European crisis could spill over and hinder the American recovery.

Stock markets in the Asia-Pacific region rose early on Monday.


Financial unease has been mounting. Riots in Greece, ever-tightening terms of credit and the unexplained free fall in the American stock market last Thursday have compounded the sense that the European Union’s inability to address its sovereign debt crisis might lead to the type of systemic collapse that followed the fall of Lehman Brothers.

The debt crisis began with Greece teetering toward default, and fear quickly spread about other weak economies like Portugal, Spain and even Italy.

Mr. Rehn said the I.M.F. would provide “half as much as the European Union” following lengthy talks with fund officials.

“We shall defend the euro whatever it takes,” Mr. Rehn said.

One of the crucial decisions that ministers made was to create a so-called special purpose vehicle to disburse the $560 billion in new loans, should that support be required by member states in economic difficulties.

The use of such a financial instrument reflected the difficulties that individual European governments — and Germany’s in particular — had in committing huge sums to a central authority. Having a body like the European Commission, Europe’s executive body, oversee the economic management of the bloc was seen by some countries as a clash with national sovereignty.

In a statement after their meeting, the ministers emphasized that the special purpose vehicle would expire after three years and that its use would be strictly dependent on “national constitutional requirements.”

There were many complications in trying to forge a consensus. They included defining the role of Britain, which lies outside the euro zone and had said it would not help in propping up the euro, as well as the European Central Bank. The fractiousness underscores the frailty of a monetary union in which its richest member, Germany, is also the most opposed to a financial rescue. Mrs. Merkel of Germany attended a victory parade on Red Square in Moscow on Sunday, a sign of how seriously Germans consider reconciliation with Russia. Mr. Sarkozy and the Italian prime minister, Silvio Berlusconi, opted not to attend, regarding the financial crisis as more urgent.



“At stake is the euro and the euro zone,” a French official said. “We need to give a clear signal to markets.” source

In Greek Debt Crisis, Some See Parallels to U.S. -

Debt Package for Europe Took U.S. Nudge - The Germans, together with other northern Europeans like the Dutch, British and Austrians, insisted that the European Commission not control the vehicle but only manage it — in conjunction, as with the Greek deal, with the International Monetary Fund. The fund would provide discipline, as well as roughly one euro for every two from Europe. (!!!)
A Trillion for Europe, With Doubts Attached -

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