Joaquin Almunia Is At It Again

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Well if you want to set off a further wave of speculative contagion, here exactly is how to do it:

European Union Monetary Affairs Commissioner Joaquin Almunia said “there are risks in the banks” of eastern, southern and central Europe. “The assets of these subsidiaries of foreign banks are being impaired because of the crisis,” Almunia said at an event in Brussels today. Across the EU, “we need to have sound balance sheets in the banks to restore the credit channels.”
Bloomberg

Isn’t it time this guy was replaced, he is definitely on the liability rather than the asset side of the balance sheet? Helloo, anybody there?

Oh, and yesterday, according to Dow Jones News Wire we had this performance:

“Member States that have not done so should strive to meet the criteria for euro adoption,” Almunia said at a conference in Prague. The euro “provides a considerable shield from the worst effects of economic turbulence” and leads to better trade and financial integration and more competition, he added. Almunia said that an expanded euro area would have to go hand in hand with wider surveillance of national economies “in order to anchor stability and prevent the build up of macro-financial risks.”

What the hell is he going on about here? Is he suggesting that people haven’t been striving to join? What does he think they have been doing in Eastern Europe for the last 8 years. Or is he announcing a change in policy, that we will offer the carrot, and if they jump hard enough so they can bite it then in they will come, behind our defensive shield? Really the man is completely useless. As Krugman said yesterday, what IS the weather like on his planet, maybe we could all go for a visit.

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About Edward Hugh

Edward 'the bonobo is a Catalan economist of British extraction. After being born, brought-up and educated in the United Kingdom, Edward subsequently settled in Barcelona where he has now lived for over 15 years. As a consequence Edward considers himself to be "Catalan by adoption". He has also to some extent been "adopted by Catalonia", since throughout the current economic crisis he has been a constant voice on TV, radio and in the press arguing in favor of the need for some kind of internal devaluation if Spain wants to stay inside the Euro. By inclination he is a macro economist, but his obsession with trying to understand the economic impact of demographic changes has often taken him far from home, off and away from the more tranquil and placid pastures of the dismal science, into the bracken and thicket of demography, anthropology, biology, sociology and systems theory. All of which has lead him to ask himself whether Thomas Wolfe was not in fact right when he asserted that the fact of the matter is "you can never go home again".