Next Wunder Tool a Euro Zone $200 Billion “Rainy Day”Fund

European Stability Mechanism (ESM) chief Klaus Regling is over in London pushing the latest wunder tool for crises, 10 years after we are still trying to solve the Greece crisis. Regling wants a ‘rainy day’ fund  to counter “asymmetric shocks in the euro zone.

ESM Klaus ReglingEuropean Stability Mechanism (ESM) chief Klaus Regling is over in London pushing the latest wunder tool for crises, 10 years after we are still trying to solve the Greece crisis. Regling wants a ‘rainy day’ fund  to counter “asymmetric shocks in the euro zone.

Regling was speaking at London’s Chatham House think tank on Tuesday with his thoughts published Wednesday. He sees such a mechanism as “an important gap in the euro area’s fiscal tools.”

Regling said. “A discussion about a limited fiscal capacity that would fulfill this function has begun. The tool can be designed without debt mutualization, and without permanent transfers between countries,” 

A cynic would suggest this is just another diversion as the central banks grapple with ending QE or at least making it work! Others would see $200 billion as a little on the light side. 

Interesting in the light of the recent FEMA disaster funds being raised following Hurriucanes Harvey and Irma where it became a political tool until President Trump stepped in and sided with the Democrats. Four Texas congressman actually voted against the increase in aid in their own state. However in this case we are dealing with helping out banks and in another case. the point shouldnt be lost on the double standards in a globalist world. 

Perhaps a poor choice of words by the stoic German academic. It does show  “In this context we could look at examples that exist in the U.S., for instance rainy day funds, or a complementary unemployment scheme.” Reuters reports that amounts around 100-200 billion euros ($119.74 billion – $239.48 billion) have been suggested privately by euro zone officials as a starting size for any such fund.

Regling in the big picture sees a “European safe asset”, but that “it would require some debt mutualization.” But wait, didn’t he say it didn’t? You can see where we are headed, keep tryinmh to move the cups rather than admit perhaps we may have a few things wrong here.

Regling concluded “cannot happen unless there is a lot more confidence that all euro area countries comply with the rules they have agreed to.”  Then there is a little matter of Brexit to get though.

Source: Reuters

From The Tradewrs Community News Desk

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