Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Politics for Pros- moderated -- Ignore unavailable to you. Want to Upgrade?

To: LindyBill who wrote (27812)	2/4/2004 4:21:32 AM
From: Elsewhere	Respond to of 793608

The European Predicament Europe's loathing of the war distracted attention from its own failures. Agreed. ... France's and Germany's violation of the Stability and Growth Pact, requiring member countries to hold their budget deficits to less than 3 percent of gross domestic product. In 2002 and 2003, France and Germany failed and, rather than face penalties, forced other countries to suspend the rules. Sad, yes. But Europe is feeding off the revival of its export markets, including the United States Not right to criticize that. It has always been like that in post-war Germany. Even this is imperiled by the recent rise of the euro on foreign-exchange markets. As the author says himself the rising euro is not a "mistake" caused by Europeans. One obvious step is to cut interest rates. No. It's useless to drown the horses if they don't want to drink. Compared with the Federal Reserve, the European Central Bank (ECB) has been overly cautious. Its key interest rate is 2 percent; the Fed's is 1 percent. Rather than the ECB lowering its rate further one could argue that the US Fed is irresponsibly keeping the interest rate too low. The ECB's timidity reflects excessive worry about higher inflation (now 2 percent) Timidity? I thought you guys like Milton Friedman? The main target to watch is monetary growth which is reasonably high. ... a more defensible belief that Europe's main economic problems are "structural" -- meaning high taxes and regulations. Exactly. Although these were remarkable political steps, they won't single-handedly reinvigorate Europe's largest economies or avert the long-term budget problem. Well, the budget outlook of EU members is better than the US one. Strange why people like Samuelson get paid to write for the Washington Post.