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Euro recovery will take a decade, says Merkel

AFP · 5 Nov 2011, 10:39

Published: 05 Nov 2011 10:39 GMT+01:00

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Resolving the debt crisis "is a path which calls for much effort, and along which we will have to advance step by step," Merkel said, the day after the end of a G20 summit in Cannes, France, which was dominated by the issue.

"The debt crisis will not be solved all in one go, (and) it is certain that it will take us a decade to get back to a better position," she added in comments posted on her website.

For that to happen, all eurozone nations would have to legally limit their debt levels, she stressed in the weekly web posting.

"Everyone in Europe must make an effort to achieve all that is required," Merkel said.

The G20 summit, bringing together the leaders of the world's most powerful economies, stumbled to a messy end in Cannes on Saturday with a list of promised measures to boost growth and reinforce the International Monetary Fund which was short on detail.

Story continues below…

Italy's Prime Minister Silvio Berlusconi was forced to accept IMF oversight of his budget-cutting programme, and Greek leader George Papandreou scraped through a confidence vote after swallowing EU bailout terms.

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Your comments about this article

13:24 November 5, 2011 by Wobinidan
I don't see them suggesting pay cuts for politicians, so it's obviously not THAT important to them.
16:00 November 5, 2011 by Major B
Let's take a macro view of this. And I know the from the past the negative points will flow. Two main points

For centuries, visionaries, brilliant leaders of substance and great ideas, dreamed of a Europe that would integrate, work together and avoid the destruction of war and plague. In this real crisis, that affects the whole world, at least there is negotiation and no threat of horse brigades marching or shots being fired. At least in the physical sense.

We really are interconnected. The Wall Street market has risen and fallen on this little crisis alone. My country has a vested interest in this being resolved.

Another point. To continue blaming the Greeks is ludicrous. Greek mininsters have righlty pointed out that the potential for the same looms in Italy and Spain. If that comes we'll be moving from a serious flu to an economic pandemic, if those budgetary problems are'nt corrected.

And yes, the U.S. budget deficit issues, foreshadow the belt tightening that MUST take place. And the belt will be tightened one way or another, adjusted with new revenues that must also be created.

Just can't help digressing for a second.

Few had the courage to publicly admit we were headed for a disaster with the U.S. tax cuts early in the last decade. Senator McCain knew the Bush tax cuts, enacted before a frigging war, would create a disaster. We took a hard earned budget surplus and blew it in a wild 8 yr gambling weekend in the Middle East. The honest brokers will admit that the government then said the deficits that would be incurred could be managed.

Now look. And then the financial gurus created and sold trillions in worthless paper in our financial sector, causing the government to have to step in. Oh, the movie Wall Street tells that story so well.

Keep occupying young people, all around the world. Let the hate mail flow.

Back to Europe. Get well cousins. Get well.
16:00 November 5, 2011 by derExDeutsche
it will take a Decade to fix a currency that has only been around for a decade. Of course, it will all be smooth sailing from here on out.
16:51 November 5, 2011 by Celeon
10 years for Europe 20 for the USA
17:00 November 5, 2011 by Englishted
Nobody was give the choice to if we wanted it in the first place.

As with nearly everything the E.U. does or has done it was imposed from above.

Democracy is a dirty word in the E.U.
17:12 November 5, 2011 by DOZ
Never forget that North America did this. Again!
18:43 November 5, 2011 by nemo999
Someone or something (Banks, Insurance Companies) had to purchase this Tier 1 Sovereign Debt. (Deutsche Bank, Hypo, PNB, Soc Gen, AXA, Unicredit ..... ) You name the bank they lined up at the trough to purchase this paper. When the notes were sold to the Banks there was very little discount on the price.

Very few if any individuals directly purchased this paper, even if they could get their hands on it.

The really remarkable thing is that the people who did purchase this paper were all "Professionals", "Experts", or "Specialists", aka "Smart Money", and in many cases were "licensed" and or "certified". An off course their actions or the actions of their institutions were inspected and regulated.

These instrument were like Crack, The various government (Producers) created it, various investment banks (Dealers) sold it, and various commercial banks (Users)bought it, and in many cases could not get enough of it. And these commercial banks (Users) were not worried, since if they got into trouble mom (Government) would come an bail them out. The only real loser would be the people, but that is a very small price to pay.

On face value these instruments paid higher interest, it was "Safe" and "Risk Free" (That right Governments do not fail and they do not inflate their currency), and it was pushed by the various treaties/conventions all in the name of creating a safer and more secure banking system. Are we any safer and or secure?

It appears that no one had any problems on the way up, there were no Cassandra in the street with prophecies of a coming doom, the wine and food were flowing, the future was bright (no one would have listen anyway), but it now the morning after and it is a real bitch coming down, with the headache and hangover just getting started, and now all you get is bread, water and some salt.

It took 10 years to get here, why is anyone (Politicians) surprised that it will take 10 years to get back to the starting point.
01:27 November 6, 2011 by srjmsbnd
As a left winger strangely I agree with Helmut Kohl who is on the record (Der Spiegel) criticizing Angela Merkel for wrecking the EU. I want to add or say I think Chancellor Merkel is an East German piece of S*** #$%^&*( she is arrogant, self-centered, popular opinion driven). People can not tell if she is addressing the public or the tabloids; and like Hitler she has picked the foreign scape goats while the crimes of Deutsch Bank, JP Morgan Chase, and Goldman Sachs have not been properly investigated and prosecuted for their corporate crimes of illegal profits, manipulation and conspiracy to commit many white collar crimes.

In my view Deutsch Bank, JP Morgan Chase, and Goldman Sachs are three financial groups who should be jointly prosecuted, nationalized and dismembered as any other crime organizations whose arrogance greatly contributed to this current financial mess.

The head of the Greek Chamber of Commerce (no left winger by any measure - since people do not like left winger I enjoy using right wing quotes to keep them honest) the EU has to be less German centric, and I agree as Germany benefited from its position in the EU and Euro-zone to suggest it does not act accordingly is a travesty.

Perhaps Angela Merkel wishes to crash the economy? as I dare not suggest more her actions have been brainless, ineffective, and laughable for Greece is the largest of 12 countries of smaller populations the five remaining are Spain Holland France Italy and Germany if she carry out what her mouth dares suggest there is no Eu and Germany is kaput in .face of the competition coming from the developing world of China, Asia and India.

These economic problems do not exist solely in Greece as they were created by the g-8 and G-20 sleeping while American government allowed corporations do what they liked.

Even today ironically the US Federal reserve does not have a rule that requires their idiot banks to prove a receipt of deposit (I know it happened to me and I filed an official complaint) but they can expand the currency by the push of a few button by 3 trillion dollars, and loan trillions to corporations without more than a handshake.

That is not proper business and commerce it is criminal insanity I say arrest the bankers and nationalize their banks assets.
07:19 November 6, 2011 by luckylongshot
The idea that this system will recover in time is naive for two reasons:

Firstly history shows that every single fiat currency has failed, going back to 400 BC and covering what is estaimated by some as around 3000 fiat currencies, This means there is 0% historical chance the Euro will survive.

Secondly the fractional reserve banking system is designed to transfer wealth out of the publics hands into the hands of the banking elite. The system will eventually cause revolution rather than stability because it is corrupt.
21:32 November 6, 2011 by derExDeutsche
The Economic collapse in the USA was caused by Democrats. Specifically, by the Gramm­Leach­Bliley Act. Although, by no means is that the only piece of bad legislation. Any attempt to rewrite history, to blame Bush Tax cuts for the collapse of Greece, is just plain Idiotic.
13:10 November 7, 2011 by Major B
@ derExDeutche

Please got back to Germany. Or just stay there and be German. We have our own Germans who perfectly know much of what happenned that created the US financial crisis. Much is probably unknown, although some of the commenters above have summarized much of it well.

If anything, the democrats should be blamed for not standing up more to the last U.S. government's decisions. Many of those were "idiotic", as well as your comment.
01:05 November 9, 2011 by Whipmanager
Wouldn't it be best if there was no common market, and if the countries went back to their original currency? If Germany, France, and Brittain are saddled with paying for everyone else, how do they benefit? Brittain hasn't seen an increase of jobs, but has had their borders breached. They -at least, didnt go the way of the Euro. Germany, has done well, but it is because of fiscal policy, not because of any advantages of a common currency. The Germans lost when the 5 DM Kaffee Kanne went to 4.9 euros (I thought there would be a two to one advantage?) it certainly didn't go down to 2.50 euros. Shop owners went greedy, people got stupid and inflation hit hard.

I think that Germans are going to be paying this debt more than others and it isn't right in my book, but, what do I know?
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