Was British prime minister Margaret Thatcher correct about the euro, European Central Bank and a European Union?
Dilemma X
Margaret Thatcher’s statement of October 30, 1990 to the House of Commons on the European Council meeting at Rome held on October 27/28, 1990.
Margaret Thatcher was Prime Minister of the United Kingdom from May 4, 1979 – November 28, 1990
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The European Union says that a recession brought on by a crippling debt crisis could give way to a modest recovery later this year – provided governments persevere on the tough austerity track.
Austerity is a policy of deficit-cutting, lower spending, and a reduction in the amount of benefits and public services provided.
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Greek exit not fatal for euro zone: European Central Bank’s Honohan stated
Reuters
TALLINN – A Greek exit from the euro zone would damage confidence in the single currency bloc but not necessarily be fatal, Irish central bank chief and European Central Bank policymaker Patrick Honohan said on Saturday.
The prospect of a Greek euro exit has arisen after European countries said Greece cannot get more of the financial aid on which it is dependent if it does not meet the terms of its bailout. But parties backing the bailout program have no majority in parliament after inconclusive elections last week.
“It (a euro exit) is not imagined in the legislation, in the treaties, but things can happen that are not imagined in the treaties,” Honohan told a conference in the Estonian capital.
“Technically, it can be managed. It (a Greek exit) would be a knock to the confidence for the euro area as a whole. So it would add to the complexity of the operation until things settle down again. It is not necessarily fatal, but it is not attractive,” he said.
He said everyone was working to avoid such an exit, including in Greece, and that if anyone thought about such a development they would view it as “a very unattractive hypothesis for the rest of the euro area and a rather destabilizing kind of event”.
European Commission Economic and Monetary Affairs Commissioner Ollie Rehn said leaving the euro zone would be bad for Greece and Greek cities and noted that the size of the bailout had shown European solidarity.
“Greece is getting external aid in terms of loans or debt relief altogether equal to 177 percent of its GDP: 200 billion (euros) from the Europeans and the IMF in terms of loans and about 100 billion (euros) in debt relief from private creditors,” he said.
Latvian Prime Minister Valdis Dombrovskis, whose own country successfully completed a bailout program involving austerity measures equal to more than 10 percent of output, said his country would not have got any aid if there had been a parliament majority against the bailout.
“You need to have an exit strategy. That is the point, that is why the Greeks are frustrated, they don’t see an exit strategy and that is why other countries are frustrated they also don’t see an exit strategy,” Dombrovskis added.
(Reporting by David Mardiste, writing by Patrick Lannin; Editing by Toby Chopra)
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May 11, 2012
European union issues warning over Spain’s deficit
By JAMES KANTER
The New York Times
The New York Times
As the Spanish government Friday readied steps to shore up the country’s banking sector, the European Commission injected a new dose of gloom by warning that Madrid was likely to miss its deficit-reduction targets for this year and next by wide margins.
Spain was headed for a deficit of 6.4 percent of gross domestic product this year and 6.3 percent next year — far beyond the 3 percent maximum under European law and exceeding its own target of 5.3 percent for 2012, according to the commission’s spring economic forecasts for the European Union.
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May 12, 2012
Hungarian far-right protests against government austerity
Marton Dunai
Reuters
BUDAPEST – The Hungarian eurosceptic far-right Jobbik party launched a campaign against the government’s austerity policies with a rally in central Budapest on Saturday, saying they were dictates of the European Union and international lenders.
The Fidesz party’s centre-right government announced earlier this week belt-tightening measures aimed at cutting the budget deficit and avoiding European Union sanctions on Hungary, emerging Europe’s most indebted nation.
Jobbik, which holds 45 of the 386 parliament seats, said Fidesz and the previous Socialist government were servile to the EU and the International Monetary Fund, whose dictates, it said, hurt the country.
Hungary used a 20-billion-euro EU/IMF emergency loan in 2008 to avoid a default. While Fidesz initially rejected the EU/IMF help when it swept to power in 2010, market pressure forced Prime Minister Viktor Orban to ask for another loan last year.
Loan negotiations were held up for nearly six months after Hungary passed a series of laws that Brussels said damaged the independence of the country’s central bank.
The European Union gave the green light for the talks late last month, setting off a market rally, but a deal could be slow in coming, analysts said.
Jobbik has put increasing pressure on Fidesz not to give in to the demands of the international lenders. The party’s chairman Gabor Vona told a crowd of about 3,000 supporters that Hungary would be better off outside the EU.
“Our goal is to make Hungary independent, built on treasures like our land and our water, and not a member of the European Union, which lack values, which lies and is headed for demise,” Vona said, outside the Fidesz party’s headquarters.
“The European Union just comes here, siphons our money away, uses us for cheap labour, uses our markets to dump its garbage, then, what little money it doles out, it tells us what we may spend it on so we can build things we don’t need.”
Jobbik has gained in popularity recently while Fidesz, which scored a two-thirds majority in 2010, has lost nearly a million voters since then in the country of 10 million.
Vona said Jobbik would stage rallies in each major city in the coming weeks to demand fair wages, education, law and order.
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Fri, May 11, 2012
Germany warns Greece: No more money without reforms
AFP
Germany’s foreign minister kept up the pressure on Greece on Friday, saying there could be no more payments of aid unless Athens enacted reforms it has agreed with its international partners.
“We want to help Greece and we will help Greece. But Greece has to want to be helped. If they deviate from the agreed reform path, then the payment of further tranches of aid is not possible,” Guido Westerwelle told lawmakers.
“We are sticking to our pledges to help. But that means as well that the agreed reforms in Greece must be carried out.
“We want to keep the eurozone together. The future of Greece in the eurozone now lies in the hands of Greece,” he stressed.
Greek politicians are battling to form a government after inconclusive elections at the weekend that handed massive gains to parties opposed to austerity measures the EU has attached to its bailout packages.
There were small signs of progress late on Thursday after socialist leader Evangelos Venizelos won the conditional support of the small Democratic Left (Dimar) party in negotiations to form a cabinet.
The stalemate in Greece has raised concerns about possible political chaos that could kill off reforms and eventually force the debt-laden nation to leave the eurozone.
Germany has kept up the pressure on Greece to push through the austerity measures required or face the consequences.
“Solidarity is not a one-way street,” Westerwelle cautioned.
Westerwelle’s comments followed remarks by Finance Minister Wolfgang Schaeuble, who appeared to suggest that the eurozone could cope if Greece left the 17-nation club.
Asked by the regional Rheinische Post daily whether the eurozone could withstand a Greek exit, the minister said: “Europe won’t sink that easily.”
“We want Greece to remain in the eurozone. But it also has to want this and to fulfil its obligations. We can’t force anyone.
“We have learned a lot these past two years and have built protection mechanisms. The danger of contamination for other countries in the eurozone has become weaker and the eurozone as a whole has become more resistant.”
“No-one is threatening anyone here,” Schaeuble said in the interview. “But we must be honest… and tell our Greek friends and partners that there is no other way that the one that we have chosen together.”
Earlier in the week, the eurozone announced it was blocking 1.0 billion euros ($1.3 billion) out of 5.2 billion euros in bailout loans for Greece until Monday amid uncertainty over the country’s political future.
Germany’s chancellor, Angela Merkel, said on Monday that reforms in Greece were “of utmost importance.”
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Eurozone
The eurozone is an economic and monetary of 17 European Union (EU) member states that have adopted the euro (€) as their common currency and sole legal tender.
The eurozone currently consists of:
Austria
Belgium
Cyprus
Estonia
Finland
France
Germany
Greece
Ireland
Italy
Luxembourg
Malta
the Netherlands
Portugal
Slovakia
Slovenia
Spain
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European Central Bank
The European Central Bank (ECB) is the institution of the European Union (EU) that administers the monetary policy of the 17 EU Eurozone member states.
The European Union is an economic and political union or confederation of 27 member states which are located primarily in Europe.
There are 27 EU member states:
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Finland
France
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
German
Malta
Malta
Netherlands
Poland
Portugal
Romania
Slovakia
Slovenia
Spain
Sweden
United Kingdom
6 core states founded the EU’s predecessor, the European Economic Community
Belgium
France
West Germany
Italy
Luxembourg
Netherlands
France
West Germany
Italy
Luxembourg
Netherlands
Dilemma X 
May 12, 2012
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