US Treasury
Secretary Timothy Geithner held private talks with German Finance Minister
Wolfgang Schaeuble and ECB’s President Mario Draghi this week. The other
confidential meeting was carried between ECB’s President Mario Draghi and Bundesbank
Chief Jens Weidmann before the ECB’s monetary policy vote on Thursday, 2 August.
Last week M. Draghi’s publicly announced to do whatever it takes in order the Spain’s
and Italy’s borrowing costs were reduced and euro stability was maintained.
However, Germany’s position remained against resuming the ECB’s government bond
buying programme and issuing Eurobonds. Broadcasted the US Treasury Secretary’s
interview with Bloomberg on Wednesday, 1 August revealed T Geithner’s concerns about
market stability and desires to sustain investors’ confidence, though usage of
the euro zone's rescue funds is not clear. Does it mean that €500bn funds
of European Stability
Mechanism could be used to implement reforms not necessary related to the recapitalization of
European banks and sovereign bonds purchase programme?
The slowing
down global economy growth was captured with different statistics. However,
World Trade Organization’s observations may reveal some new aspects of slowing
growth. According to the World Trade 2011, Prospects for 2012, WTO’s press release
on 12 April 2012, the world trade expended in 2011 by 5.0%, which is a sharp
deceleration from the 2010 rebound of 13.8%. Moreover, it was predicted that
the growth would slow further to 3.7% in 2012. On World Trade Report 2012
released on 16 July, 2012, WTO focused on new international trade challenges – increased
use of non-tariff measures. These measures reflect regulatory standards for
manufactured and agricultural goods. So, political concerns about the health,
safety, environmental quality and other social aspects may affect international
trade even more than tariffs.
Consequently,
value creation should be a priority of stability policy, shouldn't it?
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