It's fine to have such great respect for rules and regulations, but we should urgently reconsider following foolish rules which have brought the Eurozone to such unsustainable divergence.
If the rules were so good and were so well applied, by by debtors as well as by creditors, why are we in such a huge mess with so many millions of people suffering terribly, while even more millions are benefitting?
The media should report the BIS data on changing cross-border credit exposure in Europe: The "ECB billions" allowed the highly indebted countries to reimburse the highly exposed German banks which were the most leveraged in Europe. Lending too much was not inconstitutional then, but taking the resulting losses seems to be unacceptable now.
PPP Lusofonia
Source: http://www.ecb.int/press/pressconf/2012/html/is120802.en.html
Take two aspirin and call Buba in September
ResponderEliminarOr take them the whole box, as they watch TARGET2 widen
Funy thing about rules, sometimes they are part of the problem too.
ResponderEliminarEspecially when they are applied in an asymmetric manner.
The "justices" may have the last word, but it doesn't necessarily make them right, or just.
Apparently, it was NOT inconstituttional to allow German banks to become the most leveraged in Europe, making TOO MANY bad cross-border loans, including the huge exposure to so-called risk-free sovereigns, a la Basel.
NOBODY FORCED THESE CREDITORS TO LEND.
Why is it, all of the sudden, "inconstitutional" to force them to take the loan losses now, instead of continuing to shift them onto the European taxpayer?
If you continue encouraging capital flight, better keep your eyes on the TARGET2 balloon ...
In Germany, the nation’s highest court is considering whether the European Stability Mechanism — Europe’s still-dormant main financial rescue fund — is permitted under Germany’s constitution.
ResponderEliminarIt isn’t expected to rule until Sept. 12.