From:
Gordon Brown is like a wounded bull at a Corrida, putting his head
down and charging wildly ahead So it’s unlikely that he’ll take a
blind bit of notice!
But he should do or we’ll end up like Ireland. (see “The irish could
always devalue the (renewed) punt” just sent)
xxxxxxxxxxx cs
===================
FINANCIAL TIMES 9.1.09
Czech minister warns EU of debt risk from stimulus plan
By Tony Barber in Prague
A European Union fiscal stimulus plan may harm the ability of some of
the 27 member nations to refinance debt, the Czech finance minister
said yesterday.
Miroslav Kalousek, whose country took over the EU presidency on
January 1, said members were divided between advocates of the €200bn
($274bn, £181bn) extra deficit spending and those insisting on fiscal
discipline.
EU leaders approved the stimulus last month, leaving it largely up to
each government to decide how much to boost their economy by
increasing budget deficits.
Some hard-hit countries, such as Ireland, Spain and the UK, are
willing to let the deficits rise substantially, while others, such as
Belgium, Germany and the Czech Republic, emphasise control of public
finances.
Mr Kalousek said: "There is no way of concealing the risks . . .
attached to the expansion policy by means of which some countries
want to tackle the crisis."
An increase in deficit spending often necessitates issuing more
government debt. Investors have shown a strong appetite for less
risky bonds in recent months, but there are signs the appeal is
waning. Germany failed to attract enough bids to sell €6bn of 10-year
bonds on Wednesday - an ominous sign for governments that practise
less fiscal discipline.
Mr Kalousek said: "Some say this is a crisis that has to be tackled
through expansion. Others say the crisis should be accompanied by
even more rigorous discipline and that, if discipline isn't adhered
to, we'll have problems refinancing debts."
He said Czech public finances were in good order, but "often I'm
woken at night by a nightmare - how am I to refinance the debt?"
It was important the EU fiscal stimulus should be short term and
require a ra-pid return to discipline once the crisis ended, he said.
"This world crisis was not triggered by the financial policies of
this or that government. It was a total crisis of confidence on the
banking and financial markets," said Mr Kalousek. "For that reason I
think it's extremely important that the lack of confidence should not
be made even worse by unreliable policies on the part of certain
countries."
He also cautioned against regulatory overreaction to the financial
turmoil, saying: "History teaches that abrupt political decisions can
be of more harm than use. I have no reason to believe it will be
different this time."
The Czech minister's opinions carry weight as he will chair the
monthly meetings of EU finance ministers between now and June. He
stressed he would be impartial and always seek compromises among the
group rather than impose his personal policy preferences.
blind bit of notice!
But he should do or we’ll end up like Ireland. (see “The irish could
always devalue the (renewed) punt” just sent)
xxxxxxxxxxx cs
===================
FINANCIAL TIMES 9.1.09
Czech minister warns EU of debt risk from stimulus plan
By Tony Barber in Prague
A European Union fiscal stimulus plan may harm the ability of some of
the 27 member nations to refinance debt, the Czech finance minister
said yesterday.
Miroslav Kalousek, whose country took over the EU presidency on
January 1, said members were divided between advocates of the €200bn
($274bn, £181bn) extra deficit spending and those insisting on fiscal
discipline.
EU leaders approved the stimulus last month, leaving it largely up to
each government to decide how much to boost their economy by
increasing budget deficits.
Some hard-hit countries, such as Ireland, Spain and the UK, are
willing to let the deficits rise substantially, while others, such as
Belgium, Germany and the Czech Republic, emphasise control of public
finances.
Mr Kalousek said: "There is no way of concealing the risks . . .
attached to the expansion policy by means of which some countries
want to tackle the crisis."
An increase in deficit spending often necessitates issuing more
government debt. Investors have shown a strong appetite for less
risky bonds in recent months, but there are signs the appeal is
waning. Germany failed to attract enough bids to sell €6bn of 10-year
bonds on Wednesday - an ominous sign for governments that practise
less fiscal discipline.
Mr Kalousek said: "Some say this is a crisis that has to be tackled
through expansion. Others say the crisis should be accompanied by
even more rigorous discipline and that, if discipline isn't adhered
to, we'll have problems refinancing debts."
He said Czech public finances were in good order, but "often I'm
woken at night by a nightmare - how am I to refinance the debt?"
It was important the EU fiscal stimulus should be short term and
require a ra-pid return to discipline once the crisis ended, he said.
"This world crisis was not triggered by the financial policies of
this or that government. It was a total crisis of confidence on the
banking and financial markets," said Mr Kalousek. "For that reason I
think it's extremely important that the lack of confidence should not
be made even worse by unreliable policies on the part of certain
countries."
He also cautioned against regulatory overreaction to the financial
turmoil, saying: "History teaches that abrupt political decisions can
be of more harm than use. I have no reason to believe it will be
different this time."
The Czech minister's opinions carry weight as he will chair the
monthly meetings of EU finance ministers between now and June. He
stressed he would be impartial and always seek compromises among the
group rather than impose his personal policy preferences.
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