A proposito di default.....
--------------------------------
May 22 (Bloomberg) -- European Union finance ministers pledged to stiffen sanctions on high-deficit countries and
ruled out setting up a mechanism to manage state defaults, saying no euro country will be allowed to renege on its debts.
After committing as much as 860 billion euros ($1.1 trillion) to halt a European sovereign debt crisis, the ministers vowed to plug holes in the euro region’s system of penalties for countries with runaway deficits.
“We will provide new sanctions, more than is now provided,” EU President
Herman Van Rompuy said after the four- hour brainstorming session in Brussels yesterday. “Everyone is ready to go ahead with a strong stability and growth pact.”
Concern that the Greece-fueled European fiscal crisis would drag Europe back into recession pushed down European stocks to a six-month low before the
Euro Stoxx 50 Index rebounded to gain 0.2 percent. Rates for three-month loans in dollars between banks rose to the
highest level in almost 10 months.
Deliberations over the revamp of Europe’s economic management came after German Chancellor
Angela Merkel won parliamentary backing for Germany’s contribution of as much as 148 billion euros to the EU’s planned 440 billion-euro debt- stabilization fund, the largest single share. Spain, meanwhile, enacted the first public wage cuts since returning to democracy in 1978 and cut its economic growth forecast for next year.
Both “financial and non-financial sanctions” are under consideration for repeat violators of the euro area’s deficit cap of 3 percent of gross domestic product, Van Rompuy said.
Budget Fines
Under the German-inspired Stability and Growth Pact, countries with deficits above the ceiling face fines of as much as 0.5 percent of GDP unless they get the budget back into compliance. No country has been fined during the euro’s 11-year lifespan. Germany and France teamed in 2005 to dilute the rules after overstepping the limits for three years in a row.
Greece, which triggered the crisis by piling up a deficit of 13.6 percent last year, said it will be part of a front that opposes German-led calls to strip high-deficit countries of the right to vote on some EU decisions.
“There are a lot of reservations about this,” Greek Finance Minister
George Papaconstantinou said. “We aren’t the only country with reservations.”
The goal is to make legislative proposals by October, with the EU setting no deadline for when the policy changes would take effect. Some proposals may require an overhaul of EU treaties, a process that took eight years for the 27-nation bloc’s current rulebook.
‘Very Quickly’
“Forget the treaty, let’s focus on what we can achieve in the short term,” French Finance Minister
Christine Lagarde told reporters. “We are not against change, but let’s see what is deliverable very quickly.”
The consultations came before U.S. Treasury Secretary
Timothy F. Geithner visits Europe next week to discuss the debt crisis in separate meetings with U.K. Chancellor of the Exchequer
George Osborne, European Central Bank President
Jean- Claude Trichet and German Finance Minister
Wolfgang Schaeuble.
Schaeuble’s main contribution to the debate -- a call for a way to manage “orderly state insolvencies” in case emergency lending to distressed governments fails -- found little backing in the 27-nation meeting, Van Rompuy said.
Germany was alone in calling for a default procedure “only in a long-term context” and “in the short term, nobody proposed that kind of scheme,” Van Rompuy said.
Instead, the EU stuck to the view, voiced by European commissioner
Joaquin Almunia in a Jan. 29 Bloomberg Television interview, that “in the euro area, default does not exist,”
se no mi scopre................. 
