129859145612812500_249European debt crisis awaiting the end time
CICC (United Kingdom) Research Department, an economist and Chief Executive Xu Guohui reached a series of agreements in favour of eurozone while the EU Summit, but its effectiveness has yet to be tested in real terms. CICC (United Kingdom) Research Department, an economist and Chief Executive Xu Guohui (Michael Chui) recently in London reporter an exclusive interview with the business daily believes that EuropeDebt crisis is sovereign and banking crisis "the double crisis", both are required for repair time.
From this perspective, the European debt crisis is over yet. Early on, from the United Kingdom bank started, Xu Guohui in United Kingdom Economist at the Central Bank, the European Central Bank, the Hong Kong Monetary Authority as not only witness the whole process of European debt crisis, but also to the Central Bank and Government decisionsRunning mechanism has a profound understanding. Greece quit the consequences should not be underestimated Xu Guohui believes that, in this crisis, if Greece with the International Monetary Fund (IMF) and the European Union (EU) do not help each other, the situation will only get worse. "It's like two young men, open express line, the one who can give, if no one concession, killed two people. "He said�� Greece According to a policy paper for the new coalition Government publicly in recent days, Greece will re-open negotiations with international aid donors of aid conditionalities to appease popular discontent due to continuing fiscal tightening is derived.
While in Greece before the general election, European leaders have repeatedly to rescue conditions are no longer on the space, like a pair of "take it or leave" gesture. Some have pointed out that, Greece exits may not necessarily be catastrophic implications for the global economy and financial markets, Greece can be immediate devaluation of the currency, theoretically increasing export competitiveness.
But Xu Guohui said, this is just a shortsighted idea. He said the devaluation means that the inflation rate has risen quickly, brought about by devaluation of the currency competitiveness will very soon be eroded. Due to the devaluation of the currency, enterprises held in eurosDebt servicing cost will rise in price, some companies will bankruptcy, banking system crisis, Greece economy shrinking fast. In his view, if Greece really leave the eurozone, Greece experienced a very long, painful period. Loss of external financial assistance to Greece, you can only solve the problem of capital, it will be very difficult, not to mention economic growth. "99%Relief experts would agree that Greece quit the euro zone is a bad choice. "" This is a financial crisis, the crisis is easy to suddenly upgraded, if Europe is in trouble, the world will not tranquility. "He said, people should not underestimate Greece raised after the exit of the banking crisis. European 70% of corporate borrowing through Bank, if the bank crisis will significantly implicated inEnterprise financing. When the collapse of Lehman, financial institutions are reluctant to accept collateral with each other, triggering a chain reaction. And was able to quickly restore confidence in the financial system, because the Government was funding bailouts, "and now the Government has no money. "In his view, the market did Greece preparing possible exit, under the huge uncertainty,Crisis is easy to self actualization. "We all know that Greece exit would lead to instability, but no one knows to what extent, and this is where the causes of panic. In a crisis, it's hard to rational thinking.
"He said. However, if Greece really quit, Xu Guohui to Asia is not so pessimistic. In his view, Asia in 1997 and 1998 crisesSevere trauma in the machine, because many foreign banks in particular Japan banks large withdrawals, Asian Bank borrowing in foreign currency lending currency, currency mismatch to occur, devaluation of the local currency to foreign currency-denominated debt increases.
And Asia also had the housing bubble, but now these problems have been greatly improved. In his view, India contacts with foreign banks are relatively small, so in thisLess affected in the crisis, Korea is because of the large number of derivatives transactions with foreign banks, against the larger possible.
But he also said that banks in crisis from the other branch access funds as they deleverage, it means that the credit crunch, thus affecting the real economy growth in Asia. Design flaws of the Monetary Union need to fix Xu Guohui believes that the eurozone itself is a realInspection, after the crisis, people have realized that single currency design flaws, these defects must be repaired in the future. He said that under the stability and Growth Pact, joined the national fiscal deficit in the euro area cannot exceed 3% per cent of GDP
guild wars 2 power leveling, but this provision has not been seriously implemented. Now people realize that, under the common currency Union, how the hell do you can alsoHow to spend money, this design is flawed and must be changed. But this involves the countries to abandon part of sovereignty, and this takes a long time to reach agreement. "Fiscal Union may not be achieved after 10 years, but at least be partially forward, otherwise monetary Union is still very fragile. "For the Government to meet the deficit does not exceed GDP3% requires the most easy way is to raise taxes, cut spending. If you cut spending on investments, no one would feel it
gw2 power leveling, but if you cut civil service salaries, there would be objection. But Xu Guohui believes that if you cut investment, equal to the reduction of future growth engines. European leaders should not cut investment, but should first think of abatement is currently openSupported. According to recent Greece a paper published by the Government, currently Greece Government wants donors to extend the time limit for achieving deficit reduction objectives, promise not to cut income and pensions. Greece Government hopes that the International Monetary Fund and the European Union can extend the time limit for implementing strict economic recovery programme, allowing Greece pushed back two years, by 2016 to reach donorsSet deficit reduction goals. Xu Guohui said, is sovereign and banking crisis of the European debt crisis "a dual crisis" because banks hold vast quantities of European sovereign debt, when government debt crisis, banks will be involved, so both need to cut off contact. "The solution is either to make banking health, either to allow the Government to become more healthy, and bothWill take time. From this perspective, the European debt crisis is over yet. ��
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