Interactive
Euro zone bank stress test calculator
Use the Reuters Breakingviews stress test calculator to calculate how the Target core Tier 1 capital ratio and sovereign haircut levels affect the amount of capital banks need to pass the stress test. Full Coverage
Juncker lists 10 steps to stem euro zone crisis
Jean-Claude Juncker addresses a news conference during a European Union leaders summit in Brussels, June 24, 2011.
Credit: Reuters/Francois Lenoir
FRANKFURT |
FRANKFURT (Reuters) - Eurogroup Chairman Jean-Claude Juncker has proposed ten steps for solving the euro zone crisis including automatic sanctions for fiscally irresponsible governments, greater authority for the Commission and a dividend for taxpayers who rescue banks.
In an interview with German newspaper Handelsblatt published on Wednesday, Juncker also implied that a deeper debt reduction might be necessary for Greece.
"If elements appear in the troika report which call into question the sustainability of Greece's debt burden, then we must discuss how we can guarantee Greek debt (with measures) beyond a participation of the private sector," Juncker said.
Asked whether he had a plan to end the crisis, Juncker made ten suggestions:
1 - "(Release) the next tranche, if that's possible"
2 - "Ascertain the sustainability of Greek debt, otherwise we have to think about other steps that we can only take if we have given thought to all the consequences of those steps -- to those outside Europe as well."
3 - "Strict continuation of course of budget consolidation, with automatic sanctions for repeated failures to meet budgets
4 - "A road map toward bank recapitalization. The under-capitalized banks have to first try to get refinanced on markets. If that does not succeed, states have to consider whether they can jump in to make available the necessary capital."
Tax payers should get dividends for rescuing banks.
"We cannot simply hand them the money. We need to make sure that those who provide capital in whatever form are also represented in the decision making bodies -- in the supervisory board, the board of directors, in management -- and that we participate in the profits."
5 - Introduce a financial transaction tax
6 - "A growth program for so-called struggling countries."
7 - "A different tone in Europe on budgets. It is not acceptable that European Union countries are divided into those who give and those who take."
8 - "Stronger regulation of financial markets"
9 - "A new way to deal with ratings agencies."
10 - "We need an economic government. I'm delighted that the number of those supporting this idea has grown rapidly."
(Reporting by Christiaan Hetzner and Erik Kirschbaum; editing by Anna Willard)
- Tweet this
- Link this
- Share this
- Digg this
- Reprints
But I doubt if everything will hold together long enough.
http://hat4uk.wordpress.com/2011/10/12/crash-2-junckers-10-point-plan-to-solve-the-eu-debt-crisis/
The entire EU was a scam from the start. The entire reason for the common currency was to sell German and French goods to the countries they brought in to the EU. They did not demand that all the countries were equals, therefore the present problems were inevitable. Had they demanded that all of the countries had an equal ratio of manufacturing to GDP it would never have happened. But GE and FR only wanted customers not competitors.
So they made the mistake, now correct it. GE and FR can demand that companies within their countries that are using secondary manufactures from outside of the EU pull the contracts back and give them to Greece, Italy, Spain or Ireland. And continue this effort until all of them have and equal ratio of manufacturing to GDP to GE and FR. This will make all of the members of the federation equals and make the system work. It will also put a strict requirement on new members. Finally the bond market will see there is a rational and viable plan to work their way out of the problem and take the pressure off.
Follow Reuters