China, the United States, Australia and Canada together oppose the expansion of the International Monetary fund (IMF) to a larger size capable of dealing with the problems of the Euro centered on Portugal, Italy, Ireland, Greece and Spain. the countries that oppose IMF expansion want European banking organizations and mechanisms to deal with a Euro debt issue, leaving the IMF to continue with its original mission.
The idea of an increase of $350 billion to the IMF’s assets was openly and successfully opposed by the United States, Canada and Australia. The dominant sources in the IMF – Germany, Japan, the United States and China, appear to feel the current $380 billion in assets is sufficient.
"G20" finance ministers are meeting in Paris and the block to a wider IMF capable of aiding the European nations was effective. There will be more talks tomorrow (Saturday).
Reuters reported, "The United States is among countries keen to keep pressure on the Europeans to act more decisively to end the two-year-old debt crisis that began in Greece but has since spread to Ireland and Portugal and is lapping at Spain and Italy." The article then quotes the Australian Finance Minister, Wayne Swan: "The first priority here is for Europeans to put their own house in order."
Standard and Poor’s cut Spain’s credit rating, making it clear that a larger country than Greece is currently in trouble.
Fears of a Greek default have been rattling world stock markets all summer. France and Germany are likely to ask banks to accept bigger losses on the Greek debt that they carry. The first bailout, asking for writing off up to 21 percent of the loans, appears to be insufficient. Reuters quotes French Finance Minister Francois Barin stating, "It will be more, that's more or less certain."
Greece, Portugal and Ireland are being helped by an entity called the European Financial Stability Facility or EFSF. The problem is that EFSF would be overwhelmed if it were needed to assist the larger economies of
Italy and Spain. The IMF is closing its teller window in this situation. One plan is to turn EFSF into a bank.
A G20 summit is scheduled November 3-4 in Cannes, France. In addition to the European debt crisis, China is preparing to commit for a growth in domestic consumption over the next five years. China has not committed to floating its currency, the yuan, preferring to offer growth in domestic spending as an alternative.
But the news is that the largest Pacific economies – the United States, Canada, China, and Australia, do not want those monies they have committed to the IMF to be utilized in a European debt problem which has grown continuously, without coming under the control of the large European economies of France and Germany.
With the IMF essentially off-limits are a solution or palliative for the European debtors, it is likely that the US stock market will revert to the rolling volatility experienced in July, August and September.
There is an on-going question here: Why haven’t the French and Germans told the Greeks and other debtors to tighten their belts further or face dismissal from the European Union and the Euro? The lack of commitment by the European debtors invites a return to their soft individual currencies rather than continued participation in a Euro they don’t fully qualify to use.
The idea of an increase of $350 billion to the IMF’s assets was openly and successfully opposed by the United States, Canada and Australia. The dominant sources in the IMF – Germany, Japan, the United States and China, appear to feel the current $380 billion in assets is sufficient.
"G20" finance ministers are meeting in Paris and the block to a wider IMF capable of aiding the European nations was effective. There will be more talks tomorrow (Saturday).
Reuters reported, "The United States is among countries keen to keep pressure on the Europeans to act more decisively to end the two-year-old debt crisis that began in Greece but has since spread to Ireland and Portugal and is lapping at Spain and Italy." The article then quotes the Australian Finance Minister, Wayne Swan: "The first priority here is for Europeans to put their own house in order."
Standard and Poor’s cut Spain’s credit rating, making it clear that a larger country than Greece is currently in trouble.
Fears of a Greek default have been rattling world stock markets all summer. France and Germany are likely to ask banks to accept bigger losses on the Greek debt that they carry. The first bailout, asking for writing off up to 21 percent of the loans, appears to be insufficient. Reuters quotes French Finance Minister Francois Barin stating, "It will be more, that's more or less certain."
Greece, Portugal and Ireland are being helped by an entity called the European Financial Stability Facility or EFSF. The problem is that EFSF would be overwhelmed if it were needed to assist the larger economies of
Italy and Spain. The IMF is closing its teller window in this situation. One plan is to turn EFSF into a bank.
A G20 summit is scheduled November 3-4 in Cannes, France. In addition to the European debt crisis, China is preparing to commit for a growth in domestic consumption over the next five years. China has not committed to floating its currency, the yuan, preferring to offer growth in domestic spending as an alternative.
BLOG AUTHOR’S COMMENTS
Over the past week, an eerie calm and peppy confidence have been evident in the U.S. stock markets, almost as if the debt crisis of Greece and possible defaults of larger Spain and Italy had been solved and were no longer a factor.But the news is that the largest Pacific economies – the United States, Canada, China, and Australia, do not want those monies they have committed to the IMF to be utilized in a European debt problem which has grown continuously, without coming under the control of the large European economies of France and Germany.
With the IMF essentially off-limits are a solution or palliative for the European debtors, it is likely that the US stock market will revert to the rolling volatility experienced in July, August and September.
There is an on-going question here: Why haven’t the French and Germans told the Greeks and other debtors to tighten their belts further or face dismissal from the European Union and the Euro? The lack of commitment by the European debtors invites a return to their soft individual currencies rather than continued participation in a Euro they don’t fully qualify to use.
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