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Originally Posted by AmeNoJaku
These guys (mainly Cypriot and German conservatives who played the key roles in this weeks fiasco) care more about getting re-elected without having any plan about what to do when manage it.
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That seems quite a universal approach in politics.
Quote:
Originally Posted by AmeNoJaku
Should I put it in a very oversimplified way, assuming the eurozone was an economical and not just a monetary union, it would only take an increase of 1% to taxes across all countries and their sectors, when the crisis started with Ireland back in 2009 to balance all PIGSS+France/Cyprus sovereign debt and give them the time to clean up their banking systems... but now the sovereign debt has exploded to disproportional figures, all banks require ECB's liquidity (taxpayers' money), taxes have increased more indirectly more then 1% in Germany and have tripled in the weaker countries, and most eurozone countries are 2-3 years in recession, with official unemployment (<1 year after getting fired) over 10%, Spain and Greece close 30%
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Direct income transfers are sensitive topic for politicians. The sovereign debt crisis was more of a symptom than a cause. The high interest rates on sovereign debt were in large part driven by a fear of the high systemic risk in the European banking sector, not so much by the unsustainability of public finances in the PIIGS. Had the interbankmarket remained functional and the ECB quicker on the provision of liquidity, things might have turned out different.