Europe Retorts To Geithner With Some Lecturing Of Its Own, Demands The World Promptly Fix Itself
Demonstrating that when it comes to "lecturing" Europe is no better than America's own Tim Geithner (who was loudly jeered at last week's FinMin meeting in Poland after he came, he saw, and told Europe to do everything that the US had done before with such 'stunning success'), is an exclusive report from Reuters which references an EU document according to which "the European Union will call on China this week to boost domestic demand and on the United States and Japan to tackle their public deficits." Furthermore "the consolidation plans to be undertaken in most EU countries, in the U.S. and in Japan need to be accompanied by appropriate policies in other regions of the world so as to avoid an undesired compression of global demand." In other words, if the rest of the world could promptly go ahead and fix itself and fall bak in line so the status quo can resume its dutiful creep to previously unseen Ponzi heights asap, that would be wonderful and much appreciated by Brussels, and Europe can pretend its monetary union is still a viable long-term option.
More on Europe's lecturing of how the world should run itself:
By allowing its tightly managed currency to rise, export giant China would also let other Asian currencies, now kept competitively low, to rise, and boost demand in Asia.
This could help compensate for lower demand in advanced economies as they curb government spending. In Toronto in June 2010, G20 leaders, facing market concern about rising debt, agreed to halve budget deficits by 2013.
"The EU considers that the G20 should focus on ... fiscal consolidation following the Toronto commitments and in particular the need for the U.S. and Japan to adopt credible medium-term fiscal consolidation plans," the document said.
The EU itself is fiercely consolidating fiscal policy to regain market confidence in the sustainability of its policies.
"Fiscal consolidation is a top priority for all countries in the EU, even though the extent of necessary adjustments differs across the countries," said the document, endorsed last week by EU finance ministers.
While Greece, Ireland, Portugal, Spain and Italy are under most pressure from markets to reduce budget deficits, the euro zone's biggest economy Germany expects a deficit of just 1.5 percent of GDP this year and a balanced budget in 2014.
Following last week's warm reception of Tiny Tim by a very antagonistic Europe we are quite positive the US Treasury department will promptly jump to satisfying a sinking Europe's demands.
That, and of course China, which just loves being told what to do...