Short Memories For People Who Don’t Know How To Live Any Other Way ….. Eurozone Nations Bicker Over Debt Limits!!!

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This made me chuckle …..

EU ministers squabble over strict deficit limits

BRUSSELS (AP) — Leading European finance officials clashed Thursday over whether the 18-nation eurozone’s budget deficit rules are so strict that they choke off economic growth, and the International Monetary Fund called for the rules to be overhauled.

France, Italy and others who are struggling to meet the fiscal targets are pushing for more flexibility but are facing an uphill battle from the bloc’s economic heavyweight, Germany.

“The right rhythm for each of the countries has to be found” in regard to debt and deficit reduction, French Finance Minister Michel Sapin said in Luxembourg.

But German Finance Minister Wolfgang Schaeuble said the existing rules provide sufficient flexibility and insisted that solid public finances and structural reforms will spur growth and job creation.

Eurozone nations have to keep their deficits below 3 percent of gross domestic product and total debt below 60 of GDP. Those not meeting the criteria have to submit plans on how to get their finances back in order to the European Commission, the bloc’s executive arm.

The push for more leeway comes as the eurozone is emerging from years of crisis that had threatened the very survival of the currency used by 330 million people. At the heart of the crisis were countries that had amassed so much debt that their borrowing costs spiraled out of control as investors took flight. Facing bankruptcy, five countries needed rescue loans from their European peers.

To overcome the crisis, a German-led approach prevailed, insisting on savings measures and structural reforms to restore competitiveness and investor confidence. However, with unemployment still stubbornly high in many southern European nations and government borrowing costs falling to new lows, pressure has grown to ease the rules.

In a report on the eurozone economy, the IMF waded into the debate, calling for a simplified fiscal governance structure but strengthened enforcement. It warned the current rules might be so strict as to discourage public investment.

“The system has become excessively complicated,” the Washington-based fund said, while lamenting that “compliance with fiscal targets has been poor, reflecting in part weak enforcement mechanisms.”

It warned the eurozone not to fall back into full-scale austerity mood in case economic conditions worsen.

The fund’s report also called on the eurozone to push ahead with cleaning up its banking sector, strengthening the common bank backstop and implementing structural changes on the national level, including labor market reforms and liberalizing the service sector.

IMF chief Christine Lagarde presented the report’s findings at the ministers’ meeting in Luxembourg.

The eurozone debate on financial policy coincides with the tough negotiations on who will be the next president of the European Commission. The bloc’s 28 leaders are set to discuss policy priorities for the next Commission at their summit next week. Italy, the eurozone’s third-largest economy, reportedly seeks concessions on the budgetary discipline before endorsing a candidate.

Yep, the “full scale austerity”, which caps national debt to 60% of GDP …. How austere!!!! 

It seems like just yesterday the world was in a panic because of the debt of many nations in the Eurozone. 

Clearly, when one nation must borrow from another nation to avoid bankruptcy, they’ve borrowed too much money.  Now, when some nations are finally coming within realistic levels of debt, they’re crying because they’re not allowed to achieve the levels of debt which had the world in a panic to begin with. 

The problem is socialists don’t know, nor can their ideology allow for, any other way.  Some nations have leaders which simply don’t know how to generate a robust and growing GDP, (and tax revenue with it) without borrowing and spending obscene amounts of money. 

The problem is “control”.  In order for nations to generate a healthy GDP, they have to let business and people have some control of what the businesses and people do.  Left alone, businesses and people, in general will generate a growing economy.  This is how we thrive. 

Socialists can’t allow for the people, or businesses to have that sort of autonomy.  So, the only way to generate a growing GDP is to borrow money and spend it as fast as you borrow it.  This works for a limited period of time, and then things get bad, unless they have a sugar daddy to bail them out and start the cycle of faux growth, once again. 

They are very stupid creatures. 

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13 Responses to Short Memories For People Who Don’t Know How To Live Any Other Way ….. Eurozone Nations Bicker Over Debt Limits!!!

  1. Bruce of Newcastle says:

    The problem also with borrowing to stimulate growth through deficit spending is they are assuming that the growth will pull them out of the hole.

    But at the same time they are digging the hole deeper with stupid policies which kill commercial activity and waste money on stupid stuff. Like this one today:

    France Emulating Germany’s Failed Energiewende

    France wants to reduce its dependence on nuclear energy while simultaneously boosting renewables, as part of a new energy transition law revealed this week by the Hollande government.

    This is a difficult one to wrap one’s head around. Ostensibly, the rationale for the greens pushing through this policy change is that France’s considerable reliance on nuclear energy has stunted investments in renewable sources like wind and solar. This new law isn’t just setting a cap on nuclear; it’s also setting ambitious targets for renewables, which it hopes will comprise nearly a third of French energy production by 2030, more than double their current market share of 15 percent.

    But it seems that policymakers have forgotten why renewables are an environmental boon, and are simply pursuing their development as an end in itself. The chief advantage of renewables—their lack of greenhouse gas emissions—is also present with nuclear energy. Even better, nuclear power stations can produce electricity when the sun isn’t shining and the wind isn’t blowing.

    This is nutty as a whole macadamia plantation. When the socialists of France do mad things like this how on earth are they going to ever get any growth? Or pay off their government debt? The interest bills will eat them alive and destroy any chance of social spending they are supposed to want.

    • Latitude says:

      you know………..
      I thought we were doing the France model…
      ….now it looks like France is doing the US model

    • suyts says:

      Bruce, it goes back to the control thing. They simply won’t or can’t allow for human industriousness. Socialists believe it is derived from the state.

      Not only can they not fathom that people would progress, advent, and invent on their own, they recoil from the notion.

      Given that, the idiocy you posted about is a natural consequence.

  2. philjourdan says:

    France is struggling now, but intend to pork over 30-50 billion euros a year for green energy. Guess they want uncle Sugar (Germany) to bail them out.

  3. kim2ooo says:

    “The right rhythm for each of the countries has to be found” in regard to debt and deficit reduction. – French Finance Minister Michel Sapin

    Solvency might be the obvious answer.?

    • DirkH says:

      See, the problem for the Empire is – and for the rest of the world, for now, as well – is: Since 1971 ALL currencies are debt money – fiat money, where for each unit of debt one unit of currency is created.

      So growth (which corresponds to a growing MONEY supply) entails a growth of DEBT. The eternal question for all these currency regimes, is, where can we create more DEBT so we can have more MONEY.

      The taxpayer’s tapped out , the private consumer is tapped out, companies are about to be tapped out – all saturated with debt – and that’s when the endpoint is reached. They desperately try to shift the day of reckoning into the future – therefore the attempt of suppressing interest rates so even more credit can be taken out . (Suppresing interest rates is done by constantly printing more money, Fed buying up the treasuries with the new money)

      THIS IS RAPIDLY REACHING AN END AND IT IS WHERE WE START SEEING NEGATIVE INTEREST RATES – at which point rapid capital flight into safety assets – Gold – (or putting money under your mattress, withdrawing it from the banking system in either case) – takes place.

      Negative interest rates are extremely corrosive – the money will leave the system and ONLY the debt will remain in the system; which is the definition of a liquidity crisis – but fixing that by printing more money cannot fix it as that new money will immediately drip out of the system as well. It’s all coming to an end.

      Enter BRICS development fund, the new competitor to the IMF, with Gold backed “notes” – safe from American SWIFT retaliation, Dollar-free.

      Tapering/untapering moves, ECB negative interest rates, IMF demanding more debt, these are all incoherent wigglings back and forth of the Keynesians / Modern Monetary Theorists (“Public debt doesn’t matter because the state can always print money”) as they LOOK INTO THE ABBYSS; they just can’t believe their world is coming to an end.

      • cdquarles says:

        Bingo. Sovereign debt backed, fiat currency, partial reserved, nationalized banking system = economic crises (note these are government crises, not economic ones, in origin). Want it to stop? Slash government, allow fully reserved private/free banking, and most of all, eliminate ‘progressive’ taxes, of every stripe. Strictly limit tax rates and collections to what consumption taxes would bring in with a maximum whole system rate of 10%.

      • suyts says:

        Cd, 10% is right on the money. It always has been. It’s a benchmark.

        The problem is we have too many sales taxes, already. What you suggest would work economically, but, it won’t politically. Between state, county, and city, I pay 7.9% already. They won’t understand the benefits of less taxation. There are people who still argue against the Laffer curve.

  4. tom0mason says:

    The usual socialist problem of trying to square the circle when they run-out of other peoples’ money to spend. I give them a clue – STOP SPENDING!

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