tag:blogger.com,1999:blog-36227136.post7268064782576997471..comments2024-01-16T08:40:53.682+00:00Comments on <a href="http://www.openeurope.org.uk">Open Europe</a>: A structural funding solution to the crisis?OEhttp://www.blogger.com/profile/00556463374230498875noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-36227136.post-72699299443417623762011-08-15T09:21:51.345+01:002011-08-15T09:21:51.345+01:00No. The only solution to the Eurozone problem is t...No. The only solution to the Eurozone problem is to demolish the EurozoneRollohttps://www.blogger.com/profile/18255460090580758354noreply@blogger.comtag:blogger.com,1999:blog-36227136.post-39559723622046034452011-08-12T16:36:15.265+01:002011-08-12T16:36:15.265+01:00Thanks for the comment blaiklock.
Interesting tho...Thanks for the comment blaiklock.<br /><br />Interesting thought, although we’re not sure how much of this money has been lent to the public sector rather than the private sector, since the EIB tends to lend heavily to SMEs. If the loans are to the public sector it could have some impact, assuming such a change doesn’t completely contravene the EIB’s statute. Interesting to keep in mind that this would still be transferring risk from private sector to public sector since other eurozone countries provide the capital and reserves for the bank, so similar to increasing the maturity and decreasing the interest rates on the bailout loans the impact of which looks to be small in the short term (also done on a larger scale since the funding is greater than the EIB loans). Ultimately, it might provide short term relief but doesn’t tackle the underlying problems of solvency and competitiveness, and still relies on the these countries instituting massive austerity and structural reforms in the next few years (politically tricky, particularly given the timeline).Open Europe blog teamhttps://www.blogger.com/profile/14476470353790515912noreply@blogger.comtag:blogger.com,1999:blog-36227136.post-54932430458079917662011-08-12T15:01:38.093+01:002011-08-12T15:01:38.093+01:00Eurozone: Plan 'Z':
Since 1998, the Europ...Eurozone: Plan 'Z':<br /><br />Since 1998, the European Investment Bank ("EIB") has lent: (a) Greece: Euros 18.4bn.;<br />(b) Ireland: Euros 6.2bn.; <br />(c) Portugal: Euros 26.3bn.; and (d) Spain: Euros 88.3bn <br />(ref. www.eib.org). <br /><br />These loans have been largely directed towards the development of national infrastructure to promote economic growth. Clearly, that has not come about (yet). These countries remain 'on their knees'. Indeed, many might, in reality, have over-spent (dare one say it, with the encouragement of the EU/EIB??). <br /> <br />These EIB loans are long-term in maturity and remain to be repaid. Indeed, EIB may well be the most significant creditor to these countries. [Unfortunately, EIB Accounts obfuscate current exposures]. <br /> <br />Given EIB's mandate to develop EU economies, why cannot these loans be converted into "equity" or sub-debt, to be 'repaid' as "economic dividends" at some future date once economic growth has definitively returned to these recalcitrant economies? <br /><br />EIB will then have found its true role as a development bank (and justified the expense of its new HQ!). Greece, Portugal, Ireland and Spain will then have some incentive and time to reform their ways. QED.blaiklocknoreply@blogger.com