sentimental Journey

The index of economic sentiment, which is published by the European Commission in August fell by 4.7 points to 98.3, falling below long-term average of the last two decades. This aggregate indicator of confidence fell particularly low in Germany. Will the eurozone's biggest economy to pull the peripheral countries of the swamp, or she gets stuck with them? Premature tightening of monetary policy this year has not helped improve the situation. At the meeting on 8 September the European Central Bank left interest rates at 1.5%, but increases damage already inflicted. Tertius major source of instability - is inadequate arsenal of Europe dedicated to rescue the distressed countries. Increased EFSF with a wider range of powers and the sum of 440 billion euros, part of which is spent to help cope with the problems of Ireland, Portugal and perhaps Spain. But when the markets began to worry about the stability of Italy, the strategy chosen by Europe, began to bulge at the seams. The third-largest economy in the euro area total debt 1.9 trillion. Euro is too high, so it can be saved by the fund. According to Charles Vayplottsa, an economist from the Graduate Institute in Geneva, the situation has reached boiling point when the scale of potential disaster exceeded sredtsva possible to prevent it. Given that EFSF too small and not able to cope with its functions, the solution is obvious: enlarge. However, the borrowing fund provided guarantees of Eurozone countries, each of which provides a means roughly proportional to its share in the overall economy in the Eurozone. Higher than those obligations, the greater concern about the state of public finances in these countries. Rating downgrades would reduce the resources EFSF or make it less reliable borrowers with higher interest rates.