Archive for the ‘#italy’ Tag

Central Banks Search for Fixes to Calm the World’s Markets – NYTimes.com   Leave a comment

The world is integrated economically  in so many ways . The public’s shift of focus  from last month’s USA debt ceiling crisis is now onto the S&P USA debt downgrading and even further now onto the Eurozone concern over Italy and Spain”s debt and bond yields. There is indeed a high level coordination happening but the limits of that coordination are hopefully not being reached. Timing and tolerances are very fine-tuned. The integrated Global economy is operating under certain structures , ie the global banking system. Undoubtably , a shadow sytem is being conceived and worked upon as the current structure is reaching its governance capacity.

“Mr. Dadush of the Carnegie Endowment acknowledged that it would be a big political undertaking to assemble support for an international bailout of Italy.

“There is no precedent. It would be extraordinarily fraught,” he said by phone from Washington. He said leaders have perhaps four months before borrowing costs for Italy and Spain reach the point where they cannot afford to refinance their debt. World leaders, he said, “cannot stand by and watch the biggest default in history unfold.” ‘

via Central Banks Search for Fixes to Calm the World’s Markets – NYTimes.com.

Posted August 7, 2011 by arnoneumann in Economic, Europe

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Italy: Call in the G20? – Carnegie Endowment for International Peace   Leave a comment

“A bailout of Italy—on the order of that organized for Greece, Ireland, and Portugal—would require a loan of $1.4 trillion. Bailing out Spain would cost an additional $700 billion. Such sums, representing some 16 percent of eurozone GDP, are unlikely from eurozone members alone, even if the IMF provides one-third of these amounts. Such bailouts would not only strain the frail political support for these exercises to the breaking point, they would also call into question the debt-carrying capacity of the core European countries.

At the same time, given the systemic global implications of a financial collapse in Italy, and possibly Spain, the rest of the G20 could hardly stand idly by as another Lehman-class global credit crunch unfolded.

A globally coordinated bailout—led by the IMF and including bilateral assistance from the United States, Japan, China, the UK, and other countries—would amount to 5 percent of the rest of the G20’s GDP. It would inevitably have to carry far-reaching conditions not only on Italy, along the lines set out above, but also on the rest of the eurozone.”

 

via Italy: Call in the G20? – Carnegie Endowment for International Peace.

Posted August 7, 2011 by arnoneumann in Economic, Europe

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