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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Ramsey Su who wrote (5284)	1/16/2004 4:24:24 PM
From: Louis V. Lambrecht	Respond to of 110194

Ramsey. They can and the reason some countries are fined. Germany could sell Bunds, Schatz, whatever for as long as German monetary mass would stay in the window of their Euro allocation. (ECB sets the mass). France and Germany are above their allocation for more than 3 years (deficit larger than 3% of GDP) and should be fined for non-observance of the stability pact. In November last year, the Councel of Finance Ministers decide to not fine, against the rules of the Maestricht treaty (stability, fines,...) Let's do some eurotalk: the European Commission (sort of a government for the Union. Commissioners are a sort of ministers) has the role of implementing the treaties, but the national finance ministers are only responsible in their own governments. So, we have a major problem here: conflict of interest at the level of individual finance ministers. The commission has to try France and Germany for inobservance of the Maestricht Treaty (court decision expected by July). This is, IMHO, the major problem of the EUR currently: shows the weakness of the ECB and the commission and their inability to be obeyed when implementing treaties. Definitely not good for the confidence in a common currency.