Europe rejects U.S., IMF recommendations on debt crisis, stirring doubts about plan

Discussion in 'Wall St. News' started by THE-BEAKER, Oct 16, 2011.

  1. oh there is a shock

    2 weeks of bullshit headlines and propaganda only to discover yes you guessed it.

    no deal

    PARIS — European officials working to address the region’s financial crisis have rejected key recommendations from the United States and the International Monetary Fund, casting doubt on whether an emerging plan will be as broad or fast-acting as hoped.

    As crisis negotiations continued this weekend, European officials said they had reached general agreement on a response they were confident would restore faith in European banks and government finances.

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    The detailed plan to be agreed on by European officials next weekend “will be decisive,” French Finance Minister Francois Baroin said Saturday as he concluded a two-day session with finance ministers from the Group of 20 major economic powers.

    But the plan excludes the open-ended use of the European Central Bank as a guarantor of government debt and the swift infusion of public capital into banks that U.S. and IMF officials say could be critical to restoring confidence in the euro region. Both were central elements of the effort to shore up the U.S. financial system three years ago.

    “They clearly have more work to do,” U.S. Treasury Secretary Timothy F. Geithner said after the meetings adjourned, withholding judgment on whether the European plan will prove convincing.

    “It’s all in the details,” he said. “In financial crises, it is more risky to act gradually and incrementally than to act with bold force.”

    At the peak of the U.S. crisis, then-Treasury Secretary Henry M. Paulson Jr. summoned major bank executives to an October 2008 meeting in Washington and ordered them to immediately accept billions of dollars in government money. Paulson argued that the infusion of funds was vital for saving the financial system and that all the banks had to take the money, regardless of whether they needed it, so none would be singled out for accepting a bailout.

    European leaders have rejected a similarly swift and dramatic response.

    Their planned effort to prepare banks for a possible default by Greece or another heavily indebted European nation could take until June to complete. Banks first will be asked to raise extra capital from private sources — such as their own profits or a new sale of stock — and then, if necessary, to appeal to their governments for public help. If a government cannot afford it, officials could ask to borrow the money from the new bailout program, the European Financial Stability Facility.
  2. sheda


    Their planned effort to prepare banks for a possible default by Greece or another heavily indebted European nation could take until June to complete.

    I had to post this, in an effort to form a deeper relationship with the sentence, allowing me to absorb it and accept its real.
  3. haha

    Remember that TARP didn't stop the decline, it was mrk to mkt papering over that did it.
  4. Why the US is even thinking of giving finacial aid to the Europeans is an outrage. The Euro currency is a failed experiment. The necessary social change did not occur, work hours and benifits did not change and created a larger population of free riders. Let the Swiss bail them out. There are more protectionist measures for American bussiness put up by the EUthan the Chinese. The Europeans do not support American bussiness in relaltion to the open door policies for them here in the states. I am still waiting to see a Wal Mart Super Center in downtown Berlin.

    Welcome to Neo Feudalism,

  5. gtor514


    Probably because U.S. banks are deeply exposed to the european banks, more so than anybody knows or letting on. You can hear the desparation in Geitners voice every time he urges the Europeans to solve the crisis.

    The U.S. taxpayer is going to end up bailing out the banks all over again on account of Europe. That's not going to be too polular.
  6. Am I hearing this right?

    Our "libtard" cousins across the pond are resisting the US prescription of pumping vast quantities of public dollars into private banks?

    Damn those socialists, they're causing trouble again...
  7. Socialists?
  8. The reason the US wants this - needs this - is because the US sovereign debt issue is untenable. The way out of the trap is to do everything possible to make sure everyone else (that matters) is as fiscally screwed up as "we" are.
  9. S2007S


    Forums ›› Main ›› Wall St. News ›› Are you Fu$%@#$ kidding me....geithner plans on helping europe?


    Registered: Aug 2006
    Posts: 13125

    10-14-11 11:04 AM

    geithner plans on helping europe, he cant even help the US economy get out its own fucking way and now he wants to run and go help europe, what the fuck is going on in this world. Doesn't geithner know the credit crisis still exists in the US and that all his programs like TARP and QE 1, 2 etc have not worked. This cannot continue, the US is still struggling and he thinks he is going to improve europes problems, this is a fucking joke!

    US to Play 'Very Major Role' In Helping Europe: Geithner
    Published: Friday, 14 Oct 2011 | 10:25 AM ET
    Text Size
    By: Jeff Cox Senior Writer

    The U.S. plans on being an active partner as efforts intensify to get Europe get back on its feet financially, Treasury Secretary Timothy Geithner told CNBC Friday.

    With global leaders preparing for next month's G-20 summit in Cannes, France, the International Monetary Fund — of which the U.S. is the greatest contributor — is being relied on to help underwrite whatever efforts are needed to backstop toxic European sovereign debt.

    Geithner said the IMF has "very substantial" resources to fund a device that could look like the Troubled Asset Relief Program, which helped navigate American financial institutions through the crisis in 2008 and 2009.

    "Through the IMF, of course, we're already playing a very major role," he said in a live interview in Paris. "We're happy to see the IMF continue to play that role in support of a more forceful, comprehensive strategy where Europe's own resources—very ample resources—are deployed on a much more substantial scale."

    The comments give a lift to US stocks, which have been highly volatile in the past several months as proposed solutions have come and gone for the euro crisis.

    Geithner declined to give a specific number on what would be required to aid Greece and any other potential countries that need help meeting their obligations.

    Estimates have run as high as $2 trillion for a liquidity fund, and Geithner said that whatever the figure is, it should leave no doubt that there will be more than enough.

    "A basic rule of financial crises management is you want to make sure you have a level of resources that are larger than the potential need you face," he said. "If markets see that then they'll have the incentive to continue to lend, invest, to get more exposure to those countries."

    By next week, IMF participants should have "a more comprehensive strategy" to solve the problem and put in place a plan at the G-20 summit, which begins Nov. 3.

    While that is happening, Geithner said the threat of a massive global recession has decreased, making solutions easier to devise.

    "The numbers as we see them around the world have been somewhat encouraging over the last couple of weeks," he said. "You've seen steady, gradual—not strong, but gradual—growth across large sections of the US economy and you're seeing a little bit of that outside the United States, too.

    "The concerns you saw over the summer that the world might be headed into a much weaker growth outcome have receded a bit."

    He said he understands the concerns of widespread protests that emanated from the Occupy Wall Street movement, and said the administration is taking steps to address concerns of economic imbalances.

    "What you see is a general sense across the country from concern that the US economy is not growing faster, you're not seeing unemployment come down more rapidly, you're not seeing incomes rising," he said. "People to make sure that the government — Washington — is acting to make things better now."

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  10. S2007S


    There is no getting out of the financial crisis here or in other parts of the world, everyone thinks that printing more money has been the answer but will soon realize it wasn't the right way to go about and fix this crisis or any other crisis coming. You do not fix a credit crisis with more worthless dollars, thank BUBBLE ben bernanke for his ways of believing that's how its done because its not!
    #10     Oct 16, 2011