23 thoughts on “Axel Weber on European Reforms”

  1. “given the direct support of the ESM, member states in distress would already be protected from high market interest rates.”

    Eh, i’m calling bullsh1t here.

  2. More bright ideas for preventing, and then dealing with, the next crisis.

    What about the current crisis? Sorted already?

  3. “First and foremost, it is up to the member countries themselves to consolidate their public budgets and to initiate comprehensive economic reforms. Financial assistance is a supplement to buy some time and to smooth this process. Against this backdrop the existing instruments for short-term crisis resolution are adequate and, despite repeated demands to the contrary, should not undergo significant adjustment. ”

    Axel seems to think it is all the fault of the stability ang growth pact not being robust enough. Remember when that was referred to as the “stupidity pact” ?

    Is it possible to arrange for Axel and David Begg to be trapped in a lift together for a weekend?

  4. Hey – this is Axel Weber!!

    As an earlier Weber might put it, were he still around, we are all (citizen-serf socialized slaves) now in Axel’s ‘iron cage’.

  5. @colm mccarthy
    “More bright ideas for preventing, and then dealing with, the next crisis.”
    Surely you jest?! These are the same old tired ideas for dealing with the crisis before last. Stability and growth pact? Ireland was a model citizen until the country went bust. Don’t mention that France and Germany were amongst the first to break it. Inflation is not currently a problem because wage demands have no traction.

    Capital flows, bubbles and personal and corporate debt, now they’re problems. They are at the root of the current crisis and Herr Weber’s musings do little or nothing to address them. It is not enough to look at the mechanics of humpty-dumpty hitting the ground and breaking, one must also look at how he fell/was pushed off the wall.

    Individually, the components of the ESCB are neither bright enough nor strong enough to manage this. The current supervision without responsibility is a total and utter failure. More of the same is going to mean more looking under street-lights. The next failure is unknown and will come as a surprise to regulators. Amateur commentators will have spotted it in advance, but the left-field loons get neither profit nor credit from their rantings. Worse still, they save fewer than the ‘professionals’ could save.

  6. We have all had a healthy dose dose of realpolitik. 4 million people do not matter!
    The Americans wound down banks – the Europeans wound down a country. Cest la vie!

  7. If the news reported on Eurointelligence that the results of the next round of stress tests will be censored to conceal any problems in the banking systems of the Euro core is accurate, I think Mr Weber’s real analysis may not be fully represented by this article.

  8. The guy seems to be living in some sort of parallel universe where “the principles of subsidiarity, responsibility of individual member countries and no-bail-out remain essential for the EU”. Not a single one of those principles has been given significant respect by the institutions of the EU in their dealings with Ireland through the crisis. If those principles had been respected, the natural consequences of “no-bail-out”, combined with subsidiarity in a world where it’s the IMF’s job to help countries through such crises, might now have us past restructuring and moving towards recovery.

  9. Prof. Weber should be admired for standing on principle, at the expense of having a powerful European role.

    He would be a rare bird indeed in Ireland – – where a trade union leader could spend 15 years on the board of the central bank – – just 5 years short of Rip Van Winkle’s legendary snooze — and still accept no responsibility.

    Weber’s concerns are misplaced in the context of a serious crisis and it’s good that he will not have a European role.

    There are 16 other members countries of the EMU and Ireland has to engage with them.

    It is likely to be more productive thane the whingeing, xenophobia and victimhood.

  10. While I’m open to the pros and cons of the current package, we desperately need a political figure who can challenge these myths on a European level. Kenny is really going to have to step up to the plate and take on a lot of this crap that is being peddled.

  11. It is all well and good to bemoan political compromise in the process of strengthening the SGP, but an unelected technocrat like Weber should at least do lip-service to the other side of the argument.

    Policymakers across the EU oppose giving unmitigated power to technocrats in the EC, precisely because they have no democratic accountability.

    That is a powerful argument to counter, especially given the EU’s unpopularity already.

  12. Seriously annoyed again! Programme about Ireland on tv. Unemployment, hopelessness, people emigrating etc…why? property market, banks , spending collapsed, businesses fired workers, of course government ran out of euros…..Able people still there. Most of the capital still there. Scrap the euro. Bring back the punt. Reschedule foreign debts. Print money. Employ those people. Get some confidence into that economy!

    It is time to abandon much of the neoclassical synthesis which has been behind the economic and financial policies of recent years and give PostKeynesian economics a try.

    Successful Asian economies abandoned the neoclassical school after 1998, and the whole world should do likewise.

    Google billyblog for Professor Mitchell’s guide to modern monetary theory and what places like Ireland SHOULD be doing. Definitely NOT the time for austerity.

  13. @Eamonn Moran

    Given his comments about the Nama valuations and the “or so I’m told” comment about commercial realestate going up in US and UK on Vincent Browne’s programme in the Autumn, it also tells me something about P Honohan.

  14. About market perception and the loss of Ireland’s image from successive miscalculations regarding recapitalisations:

    How bad does it look if we had put in €7-10bn into our banks by the end of this month and then, sheepishly, having to put even more in after the Stress Test results in April (or June as the MoU says)?

    Has anybody acxtually found a logical reason for this well-publicised “cart-first” policy?

  15. @The Iberians

    Spain Identifies Risk of Problem Loans in Savings Banks
    Spain’s central bank on Monday classified 46 percent of the exposure that the country’s savings banks had to the construction and real estate sectors as “problematic.” […]Miguel Ángel Fernández Ordóñez, the governor of the Bank of Spain, insisted that such a risk level — 100 billion euros ($137 billion) of the 217 billion-euro total — did not endanger the Spanish financial sector as a whole. […] … latest risk assessment by the central bank is an attempt to reassure investors that huge and as yet unrecognized losses linked to reckless real estate lending are not threatening to sink the savings banks, known as cajas.

    http://www.nytimes.com/2011/02/22/business/global/22cajas.html?ref=todayspaper

    Capital Flows – Dangerous Capital Flows – Neither Axel nor Lorenzo want to know …. Iberians – look at Ireland – be very afraid … and don’t also be taken for Fools. Time for a Coalition of Willing Realist Bank Defaulters prior to the Fudge being prepared for March? European Citizens First – Lets skip the Franco-German Tango – and combine the Flamenco with the Irish Riverdance ….

  16. @Tracy Alloway

    Thanks for that Tracy – bet you never seen anything quite like this before? Neither have we! And they say the last thing a fish discovers is water (-;

    @grumpy

    Ta for that – a must read.

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