The cause of the euro crisis is not to be found in the irrationality of the financial markets. Rather, it lies in the fact that certain countries lived beyond their means. A Greek train driver earns a monthly net salary of €5,000 ($6,600), and Spanish air traffic controllers make up to €300,000 a year.
In 2007, the Irish government had a balanced budget, and the Spanish government even had a surplus. The financial sector, on the other hand, issued loans that made no sense at all for years. The damage is considerable, but it could be contained if Europe would introduce euro bonds.
Since total new borrowing for the euro zone is substantially lower than that of the United States, the euro bond would be an attractive instrument at the international level. And that's particularly the case since the market for euro bonds would be much bigger than the market for German government bonds.
The European Central Bank (ECB) has already asked (euro-zone) member states for a capital infusion because, since the crisis began, it has bought up close to €75 billion in troubled government bonds. And who is paying the lion's share? Germany. For the time being, the shell game being played by politicians and the ECB is still working. But things will get worse when Greece and others can no longer service their debts. Then we'll have to guarantee amounts that no one could even imagine today.
Without the euro, Germany would have come to resemble Japan, suffering from weak growth and always teetering on the edge of deflation. Like Japan, in order to re-establish competitiveness, we would have had to respond to every devaluation of the dollar with wage freezes. Thanks to the euro, we avoided that. And that's why it's worth doing everything we can to preserve it. Spiegel
Bloomberg to Force Disclosure of Greece Swaps
Bloomberg News filed a lawsuit against the European Central Bank, seeking the disclosure of documents showing how Greece used derivatives to hide its fiscal deficit and helped trigger the region’s sovereign debt crisis.
The lawsuit asks the European Union’s General Court in Luxembourg to overturn a decision by the ECB not to disclose two internal documents drafted for the central bank’s six-member executive board in Frankfurt this year. The notes show how Greece used swaps to hide its borrowings, according to a March 3 cover page attached to the papers obtained by Bloomberg News.
“Decisions made behind closed doors helped contribute to the global economic havoc of the last few years. Money flees secrecy and unanswered questions undermine the financial system and give some participants an unfair advantage. Confidence in markets grows with information,” he said. “Bloomberg wants the ECB, as well as the Federal Reserve and other financial institutions around the world, to end this damaging opacity.” Bloomberg
Jafar Panahi arrested (II)
Jafar Panahi (Persian: جعفر پناهی ; born July 11, 1960) is an Iranian filmmaker and is one of the most influential filmmakers in the Iranian New Wave movement. He has gained recognition from film theorists and critics worldwide and received numerous awards including the Golden Lion at the Venice Film Festival and the Silver Bear at the Berlin Film Festival.
On 20th December 2010 Jafar Panahi was handed a six-year jail sentence and a 20-year ban on making or directing any movies, writing screenplays, giving any form of interview with Iranian or foreign media as well as leaving the country. wikipedia
Note: Panahi is not the only filmmaker jailed in Iran.
Alexander Lukashenko and his black-shirted riot police reverted to type at the weekend, cracking heads and arresting opponents while fabricating a landslide election victory. This violent regression victimised the people of Belarus.
But it was also a striking setback for half-hearted European Union attempts to break Moscow's icy embrace and bring Belarus in from the cold. Guardian