The European Monetary Fund was actually on the table. Nevertheless, since last Friday the idea is gaining the upper hand again after deliberations in Madrid, the chairperson of euro finance ministers, Jean-Claude Juncker, announced that a bailout fund for euro-strapped states is fast approaching. Here, the science regarding a bailout is agreed as rare. Overwhelmingly reject Germany’s economists from the creation of a European Monetary Fund. Of 91 economists surveyed said 64 out against such a rescue package for euro countries.
EWF had a credibility problem – because the Member States would decide the appropriate sanctions jointly. In addition, those countries such as Italy and Portugal would express in his own considering the budget situation for profound sanctions is unlikely. On top of that, the anger of the sanctioned country would work against the EU, which would weaken the European Community and its currency.
It would be better to call in a threat of national bankruptcy to the IMF to help and to make their political independence to benefit. However, it must be made sure that he takes the lead role – as has happened in Latvia and Hungary. The IMF would have the necessary expertise, credibility and authority – all properties where there is a lack of the EU.
The bailout of Greece
The bailout of Greece would burden Germany with 8.4 billion euros. Germany pays it the largest share of the Greek bailout. The threat of state bankruptcy seems prevented for now. After weeks of anxiety Athens can now breathe easy: Last weekend the euro countries Greece opened in 2010 bilateral loans totalling 30 billion euros. This would allow Helene almost their entire financial needs – about 32 billion euros – cover for this year. This assurance has calmed the markets for now.
If so the worst is over, however, cannot say definitely. Given the weak Greek economy and the huge debt, scepticism is still. The rate of interest for possible emergency loans to Greece in the EU countries is 5 percent. On the open market would have about 7 percent are applied. Greece is subsidized by low interest rates – to the detriment of the European Community.
The solution could have been much easier. Strict compliance with the rules of the euro would have helped the most. The rules prohibit a European aid. In a pinch, the IMF would have to stand. Instead, the policy has squandered and searched too long for an attitude. Especially for Germany that can now be expensive.