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Greek parliament votes 155 to 138 for austerity package, and is expected to approve implementation bill today;financial markets still expect Greece to default eventually, amid doubts that the government will implement the programme;the additional annual burden for an average Greek family will be in the order of one month's salary;violent protests erupted in the centre of Athens after the vote; Michael Martens argues that Greece is going to remain a limited democracy for some time to come;central banks extend dollar swap lines as an insurance policy in case of a Greek default;Jürgen Stark tells Die Zeit that any Brady-plan element in a rollover package would contravene the Art.125 TFEU;Germany may include longer-dating Greek debt instruments in the rollover package;Merkel and Ackermann clash over the pretence of a "voluntary" rollover;the Italian cabinet is due to pass a 47bn four-year austerity plan, with most of the savings earmarked for the time after the next elections;Nicolas Sarkozy appoints budget minister Francois Baroin as France's new finance minister;a French legal commission will decide on July 8 whether the Christine Lagarde will be prosecuted;Le Monde calls on Lagarde to emancipate herself from Sarkozy;Patrick Welter criticises the direction the IMF had taken under DSK;the European Commission, meanwhile, proposes a 1% sales tax and a financial transaction levy to boost its own resources.
Limited democracy in Greece After yesterday's endorsement of the second rescue package in the Greek parliament Frankfurter Allgemeine Zeitung's Michael Martens takes a look at democracy in Greece and concludes that "for the foreseeable future Greece will only be a limited democracy". According to the author the Greek government has been stripped of its sovereignty and the elected representatives can no longer take meaningful decisions. Instead they execute what the EU and the IMF tells them to do. Martens dismisses worries of economists that the rescue programs could create moral hazard and constitute an invitation to countries to be fiscally irresponsible. "No prime minister will want to pay the prize that prime minister Papandreou currently has to pay", he writes.
After yesterday's endorsement of the second rescue package in the Greek parliament Frankfurter Allgemeine Zeitung's Michael Martens takes a look at democracy in Greece and concludes that "for the foreseeable future Greece will only be a limited democracy". According to the author the Greek government has been stripped of its sovereignty and the elected representatives can no longer take meaningful decisions. Instead they execute what the EU and the IMF tells them to do. Martens dismisses worries of economists that the rescue programs could create moral hazard and constitute an invitation to countries to be fiscally irresponsible. "No prime minister will want to pay the prize that prime minister Papandreou currently has to pay", he writes.
"In this union of tomorrow, or of the day after tomorrow, would it be too bold, in the economic field, with a single market and a single central bank, to envisage a ministry of finance of the union?" he said as he accepted the Charlemagne prize for contributions to European unity. ... "Looking at the euro area today, we see clearly that countries that abide by the rules of the single currency can thrive and prosper," Trichet said. "But we also see the opposite. Strengthening the rules to prevent unsound policies is therefore an urgent priority." ... "But if a country is still not delivering, I think all would agree that the second stage has to be different," he said, suggesting that eurozone authorities be given "a much deeper and authoritative say in the formation of the country's economic policies if these go harmfully astray". He added: "It would be not only possible, but in some cases compulsory, in the second stage for the European authorities - namely the council on the basis of a proposal by the commission, in liaison with the ECB - to take themselves decisions applicable in the economy concerned."
...
"Looking at the euro area today, we see clearly that countries that abide by the rules of the single currency can thrive and prosper," Trichet said. "But we also see the opposite. Strengthening the rules to prevent unsound policies is therefore an urgent priority."
"But if a country is still not delivering, I think all would agree that the second stage has to be different," he said, suggesting that eurozone authorities be given "a much deeper and authoritative say in the formation of the country's economic policies if these go harmfully astray".
He added: "It would be not only possible, but in some cases compulsory, in the second stage for the European authorities - namely the council on the basis of a proposal by the commission, in liaison with the ECB - to take themselves decisions applicable in the economy concerned."
Same as he ever was. He might ask himself, "My God! What have I done?" But he won't.
Mr. Trichet is skirting on the edge of talking treason.
- Jake Friends come and go. Enemies accumulate.
Get along Kid Charlemagne (Steely Dan) It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II
If only.
Can I have the Euro Area he's looking at? Economics is politics by other means
clearly this was about fiscal irresponsibility, and we need to enforce much stricter rules.
"Looking at the euro area today, we see clearly that countries that abide by the rules of the single currency can thrive and prosper," Trichet said.
Didn't Ireland abide the rules? It was the celebrated model where EU took baltics to see and learn. What has changed?
..eurozone authorities be given "a much deeper and authoritative say in the formation of the country's economic policies if these go harmfully astray".
Ireland/baltic model to every country. These charlatans would create disaster everywhere they put hands to.
wheee 'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty
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