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Social market economy

Germany, Portugal, Spain and Italy will need in the coming year to liquidity from the capital markets. Ireland and Greece can operate at low interest rates from the bailout pot. It is a truism that who ordered the music must pay the chapel. Often this rule is unfortunately not taken regularly. Looking for a way out of the debt crisis now require some European bonds to be jointly liable for all euro countries. The benefits have the responsibility and clammy States should just take those countries that have managed their business solid. Disincentives would be elevated.

Therefore, the federal government indicated that countries with sovereign economic policies also are need to be confident enough. So, they to answer for their own debts. Indirect forms euro bonds were already a reality, namely, with the introduction of the euro. For the markets, the euro was initially another term for DM particular southerners enjoyed a sudden interest. Such one, which they had not imagined even in their wildest fantasies.

Yet what they did with this gift? Today, almost 10 years later, the markets are again demanding to more interest rates that are realistic. The experience of the last 10 years should be instructive. The euro bonds would only exacerbate the problem. Nothing has changed in the mentality of the people in the southern countries and the measures initiated happened only due to external pressure. It would be good if crisis countries are adapt to the social and fiscal policy immediately of the present. In this way will show solidarity with Europe.

In the same time, the common economic policy will be inevitable in the medium term, although the euro bonds provide no adequate means now.Germany has the economic catch-up after the crisis ahead. The economy is booming. First in terms of exports as well as for private consumption. Why is the German economy out of the crisis so powerful? Sure, we now benefit from the international integration of our industry. Germany is benefiting from its willingness to change the past years. This is ultimately the result of two epochal events: German Unification and globalization.

In East Germany, after reunification modern industry, it is became the model for many companies in the West. With the favourable development of unit labour costs rose and the global competitiveness of the two halves of the country. With the rigid regulations of temporary employment protection have been circumvented. In short, Germany moved closer to a piece of America, exactly where it was most needed in the market flexibility.

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The global economic and financial crisis and government stimulus programs

With the global economic and financial crisis also experienced a renaissance with respect to government stimulus programs. In addition, in many countries they had their effect. Nevertheless, this should not lead to calm and inactivity. Since the 70s, the most economists are very critical tuned. However, experience shows that there was usually more damage was done, more damage than it to contribute to a sustainable solution for economy.

It is a fact that a sustained higher economic growth cannot be achieved with government intervention. They seem to be successful only if there is a sudden, sharp drop in demand.However, it is necessary time all this to come into force and all to be designed purposefully. Here is another important thing. All this must be limited in time. The public finances are not permanent and they not should to be the burden on future budgetary margins. In 2009 and 2010, Germany spent 4.1 percent of GDP on stimulus programs. Thus, Germany was more ambitious compared with the EU.

Consequently, the accusations from abroad are unfounded. Nevertheless, Germany supported the international economy too little. For 2011, it is now time to begin the reduction of the costs of economic programs public debt in order not affect future growth.
The general government debt

The debt burden is massive. To 2 trillion piling up now, the general government debt of the Federal Republic. Inexorably progressing German government debt. End of this year, another record low is broken: Germany’s national debt will exceed the astronomical value of 2,000,000,000,000 euros.

In 2010, 325 billion euros have been piled on new debt. Thus, the debt has increased by an average daily incredible 890 million euros. All this has a dramatic effect. According to estimates by the Federal Ministry of Finance, the interest charges for the debt in 2010 are 58.5 billion euros. The money for other purposes, such as education and infrastructure, is not available. In addition, the interest rates are currently at historic lows.

Continue to rise only slightly, the interest on government debt .Given this bleak picture, one could argue that the policy finally initiates the big changes, which includes a call “Get out of the debt trap”. Given the enormous challenges that adopted by the government, the fiscal consolidation measures are simply insufficient. It would allow the policy to save billions of dollars in subsidies.

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Two varieties Euros for Europe

The main thesis in Hans-Olaf Henkel work is two varieties Euros for Europe! At the beginning of his book, it comes to politicians and managers, more precisely for fraud, embezzlement, and coup.He wants to provoke. What he has to say is that Henkel had once fought fiercely for the introduction of the euro in the industry. Now he feels guilty.

The promises about the euro are broken, the expired time of the old Euro. He called for a new currency, which must comply with national differences.To rescue it, he proposes to divide Europe into two zones. In “Club Med” countries like Greece, Italy and France, which are the “southern euro” have (or “Euro-Franc”), and in northern countries such as Germany, the Benelux countries and Scandinavia, which are then “North -Euro “(or” Euro-Mark “).

A strong euro for the North, a weak for the South. The North Country, the disciplined households would get a harder currency, while the southerners are again put in a position, to take into account inflation to its own economy.Primarily, we have no euro, which is a massive bank problem.

The financial sectors of many countries in Europe are completely oversized. Ireland, for example is threatened in regards to the solvency because the state must guarantee bloated bank balance sheets. If Ireland could not save his money houses should, then the debt problem would be manageable.German banks are currently more than 2.4 trillion euros to companies, governments, other banks lent over the world, and this is a huge risk. One can only hope that the banks have highlighted certain stores and now they are with a lot more capital than in the past.

Therefore, they can meet with a greater shock resistance. Risk premiums on bonds were before the crisis generally too low. Assumed that in a crisis, the state would collect their bank. That has been the real fault of the banks.Of course, the euro is in danger. Undoubtedly, the euro problem has to do with the different money attitudes in Europe.

The politicians must act. We need a coherent functioning financial discipline and binding for all countries in the EU.

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