Since the euro-zone’s leaders met in July, market instability has continued based mainly on fears of a Greek default and concerns over rising bond yields for euro-zone countries on the fringes of solvency. Thursday night Europe’s leaders met again with the intention of finding a solution. A hopeful, three-pronged approach to the market concerns was agreed, namely that (1) the European Financial Stability Fund (EFSF) would be more than doubled to 1 trillion euros (at the July meeting of euro-zone leaders the EFSF was increased to 440 billion euros); (2) banks holding Greek debt are to accept a write-off of 50% of debt (increased from the 20% proposed at the July meeting), and (3) European banks will be required to raise 106 billion euros in new capital by June 2012.
Though markets have reacted well to the deal, as with everything EU, it takes time for the summit-level agreements to filter down and be ratified by the individual euro-zone countries. Until that takes place, the deal is theoretical. Also theoretical is the increase in the size of the EFSF. Funding for the EFSF cannot come solely from the euro-zone countries themselves. To do so would raise their debt limits to such a level that many of them would suffer downgraded ratings meaning increased government borrowing costs. So the head of the EFSF is turning to China to discuss its terms for buying EFSF bonds.
The latest agreement among euro-zone leaders however has not resolved some of the key issues which strain the seams of the European project. The first issue is who takes the losses when debt has to be written down? European banks (mainly French and German), as well as the European Central Bank, are the largest holders of Greek debt. In the event of a default by either Greece or another ailing euro-zone economy, experts have predicted that some banks may not survive (nine banks failed the stress tests conducted earlier this year). Presently there is no European agreement on how those banks’ depositors will be protected in the event of such a default. However, this issue is not being discussed because national leaders know that it implicates fiscal transfer between nations.
The second issue is the economic agenda. In northern European countries there is a strong preference for austerity, after all Germany implemented painful labour market reforms in the mid-2000s causing unemployment to soar to around 13% but ultimately leading to its stronger export position now. By contrast, in 2001 at the time of joining the euro, Greece went on a spending spree increasing wage levels and worrying little about labour market competitiveness. But in the south, the Mediterranean countries need growth to be able to service their debt. Under the heavy hand of their rescuers they have been implementing austerity measures aimed at reducing their budget deficits and ultimately debt, but the spending cuts are unpopular and killing growth. As austerity kills growth, demand for unemployment benefits swells and imperilled government coffers are again depleted making the climb back to surplus all the more difficult.
The third issue is how to ensure fiscally responsible behaviour in the future. Germany wants to implement disciplinary measures imposing fines on governments running budget deficits. But such punishment is regarded as useless by some who argue that financially penalizing an indebted country only exacerbates the problem. Others don’t miss the opportunity to point out Germany’s hypocrisy since after its accession to the euro, it was cavalier (as was France) in its flouting of the agreement amongst euro-zone members to not exceed the agreed maximum debt to GDP ratio. Of equal concern is the effectiveness of this approach. While rigid discipline might punish profligate behaviour by spendthrift governments, what of those countries whose economies have collapsed for other reasons? Both Ireland and Spain had relatively well managed public spending but were crucified by the 2008 property crash. It doesn’t appear that the sort of rigid discipline Germany wants would be universally useful to stamp out rampant debt accumulation in the south.
National leaders seem reluctant to tell voters what they don’t want to hear – that is that if the euro unravels, everyone will suffer. As an export-lead economy, Germany benefits from the increased competitiveness of the currency which is due to the presence of the Mediterranean countries in the euro. If they were to leave, the value of the euro would shoot up leaving Germany’s exports uncompetitive. Likewise, the south does not seem to realize that they don’t have a choice but to stay either. If they were to leave, their currencies would be so highly devalued that inflation would skyrocket leaving them in a potentially worse situation than they currently find themselves in under austerity.
This all leads to the inevitable conclusion that Europe needs empowered and strong decision makers for all of Europe. National politics, riven with ideological divisions, and cultural rivalries amongst states, has meant that domestic governments have become ineffective for making decisions which require coordination of multi-national interests. It remains to be seen how long it will take leaders and voters to accept the inevitability of a more powerful and centralized European government.
Eye on Europe
Recently we witnessed a shocking prisoner exchange, the Netanyahu government agreed with Hamas to release over 1,000 Palestinian prisoners in exchange for one Israeli soldier, Gilead Schalit. Some Israelis say the exchange “radiates weakness”.
The hard truth is that the release of 1,027 terrorists for Schalit will lead to the murder of more Israelis in the future. Past history confirms this as truth.
Israel has always taken pride in the fact that it will not negotiate with what it considers terrorist organizations. Hamas, the terrorist group that rules the Gaza strip, has vowed its number one foreign policy goal is the destruction of the Jewish state.
Many are asking, Why the extremely lopsided exchange? The prisoners released include those who orchestrated suicide attacks on a Jerusalem pizzeria (15 killed), a Passover seder in Netanya (30 killed), a bus in Jerusalem (11 killed) and a bus in Haifa (17 killed).
What many Americans may not appreciate it that every night when Mr. and Mrs. Netanyahu went to bed the parents of Noam Schalit, Gilead’s father, and his wife Aviva were lying on their beds in a cold tent on the pavement just around the corner of the Netanyahu’s home. The protest camp out (which began in March 2009), for the release of Gilead, gained massive support throughout Israel.
David Landau, well known Israeli journalist believes that, “It got to Netanyahu and it got to Mrs. Netanyahu, and over the course of time he gradually found his determination to resist this kind of campaigning getting weaker and weaker, and I have the fullest empathy for that.” The long campout ordeal weakened Netanyahu’s resolve.
Others say Netanyahu caved to pubic opinion, which overwhelmingly supported negotiations to return Shalit to Israel. The decision by Netanyahu may be based upon a mixture of motives.
The exchange was done with the heart, but was it wise? No. To every thing there is a season, and a time to every purpose under the heaven (Eccl 3:1). It is not the time for Israel to be giving in to terrorist Hamas. Handing over 1027 Palestinian criminals for one Israeli soldier was a very bad deal. Israel will pay a hard price for this decision of the “heart”.
We wonder, sometimes, why our kids don’t respect us like we think they should. We supply their needs, give them decent homes to live in and pay their way through expensive schools to help them with their futures. At least many of us do. Others do what they can along those lines, even though they may be disadvantaged in some way. Our kids, compared to most in the world, are truly “blessed” by their parents. Yet, there’s something missing in our relationship with our kids.
This subject came to mind as I looked at the calendar and realized another Halloween is about to arrive – next week in fact. I hate Halloween. I refuse to participate in it. It celebrates evil. Yet I am definitely in the minority when it comes to hating this holiday (more properly called “Helloween” if you ask me). Have you ever had your house egged, your mail box torn up, your door mat stolen, your yard trashed on Halloween? I have. This is a good holiday?
So how does all this connect with the lack of respect our kids often show us? It connects because kids hate hypocrisy. Even though as they age they can be hypocrites too, they still hate it in others. And that is what they see their parents practicing when they foist off holidays on them that they know are filled with evil ideas and cult or false religious practices that include demonism and witchcraft. Parents go along to get along when it comes to child rearing all too often, and claiming doing stupid things because everyone else does it, is fun for the kids, is just plain ignorant. Yet, because society approves hypocrisy, that is what parents do when they have their kids going door to door threatening their neighbors with “tricks” if they don’t get something from them for free. Is this what we tell our kids to do the rest of the year? No Way! Do we want them to behave like demons, witches, or even ghosts? Are you kidding? But on Halloween, it’s ok. Even churches approve it. This is crazy.
So why do our kids show us little respect? Because we show disrespect to our kids. We tell them creepiness is ok on Halloween, then punish them if they act creepy at other times. We tell them lying is wrong, but dressing up to appear evil is ok. We tell them not to steal, but encourage them to hold up their neighbors on Halloween. We teach them moral values, but show them that dumping all that to have fun one night each year is acceptable behavior. Yes, we parents do that and a whole lot more when we send our kids out the door every October 31 with a bag in their hand and a costume on their backs to threaten their neighbors with harm if they don’t hand over the goodies.
Maybe it’s time we took a good hard look at our adult behavior. Maybe we are selling our kids far too short when we think they don’t notice the inconsistencies in what we teach them. Maybe we don’t honor their intelligence when we foist off our foolish childishness on their developing, sensitive minds. You want respect from your kids? Perhaps we need to first try to truly respect them.
US President Barack Obama has announced the ban on openly gay people serving in US military ended on September 20th. In Washington, the President marked the day in a written statement, noting… “patriotic Americans in uniform will no longer have to lie about who they are in order to serve the country they love.” The President continued by stating that, “Our armed forces will no longer lose the extraordinary skills and combat experience of so many gay and lesbian service members”.
Isaiah 3:9 describes many of our Civilian and Military leaders today, men and women in leadership positions who have openly rejected God’s laws: The look on their faces is a witness against them. They show off their sin, just as the people of Sodom did. They don’t even try to hide it. How terrible it will be for them! They have brought trouble on themselves.
With the certification, Mr. Obama affirmed that he, Defense Secretary Leon Panetta and Joint Chiefs of Staff Admiral Mike Mullen have officially confirmed that the military is prepared, following extensive training and preparation, to implement December’s repeal of the law.
Under the US policy of DADT (Don’t ask, Don’t tell), established in 1993, gay people could serve in the military but could not acknowledge their orientation. The military was forbidden to inquire but was permitted to expel service members found to be gay. Britain, Israel, Canada, Australia, France and at least 20 other nations allow gays to serve openly.