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The Crisis of the Euro

Updated on August 30, 2012

IMF promises to act on the Crisis of the Euro

The International Monetary Fund promised to act firmly to fight the crisis of sovereign debt in the "Euro area", with countries around the world to warn of the erosion of European Union economies.

Different member states of the International Monetary Fund (IMF), including China, the United States and Brazil, seized the annual meeting of the Fund and the World Bank to ask the EU to act quickly against the crisis in the "Euro area", and heard the promise that European leaders will take all necessary measures to prevent the escalation of the current situation.

The policy board of the IMF admitted that the EU - whose countries are the 27 largest shareholders of the fund - is at the epicenter of the crisis and ensured that it will strive to "restore confidence and financial stability" to help the world economy back to grow.

In a press conference, the Director of the IMF said the fund needs to raise capital that is available if the Eurozone crisis will worsen.

Also at the press conference, Tharman Shanmugaratnam, Minister of Finance of Singapore, which chairs the Monetary and Financial Committee of the IMF, said that there is a "collective will" to prevent the escalation of the crisis, a promise made after the United States and major emerging economies have asked the Europeans to act faster and better.

Zhou Xiaochuan, who leads the Chinese Central Bank, said that "the crisis of sovereign debt in the Euro area must be addressed quickly to stabilize market confidence".

The Finance Minister of Brazil, Guido Mantega, said that European leaders must take steps to "stop the contagion to countries beyond the periphery of the "Euro Area"", such as Portugal, Greece and Ireland.

Timothy Geithner, Treasury Secretary of State for US, considered the European debt crisis "the biggest risk facing the global economy" today and said they still needed more to create a wall to prevent further infections.

Funny´╗┐ but sadly true


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    • SoaresJCSL profile image

      SoaresJCSL 5 years ago

      Thank you

    • SoaresJCSL profile image

      SoaresJCSL 5 years ago

      Thank you

    • EurionConst profile image

      EurionConst 5 years ago from Delhi, India

      Informative hub!

    • SoaresJCSL profile image

      SoaresJCSL 6 years ago

      First Greece, then Ireland, Italy, Spain and Portugal: the European common currency has come under pressure from large national debts and the effects of the global financial crisis, ultimately requiring a rescue package close to a trillion euros.

      The crisis in the EU spirals because it is systemic. Part of this systemic crisis is the banking sector crisis, that is almost bankrupt and acts like a black hole. For as long as politicians insist on their false interpretation of the crisis and for as long as they continue to deny the truth about European banks, the problems will only accumulate and the solution to them will become even more difficult, if not impossible to achieve.

      The European banking system is verging on insolvency. It is a system filled with zombie banks that only exist thanks to the liquidity of the ECB.

    • CHRIS57 profile image

      CHRIS57 6 years ago from Northern Germany

      The longer i think about all so called sovereign debt crisis, the more i tend to interpret the crisis as a natural reaction of real economy to the overdose of financial economy.

      The Euro crisis is not really a sovereign debt crisis, it is more a crisis of the overdoped banking system. All statements above in your hub make sense if you take a perspective from the banking system. Everyone realizes the Ponzi scheme has reached its culmination point. That makes people nervous.

      But what will happen. Is it really too dangerous to bust the financial bubble? What will happen to Northern Europe, if Southern Europe has to default? Nothing much, just a suspense period of rearrangement. Northern Europe will have to realize that the will never see the money, they had never seen anyhow. Actually a current account surplus is nothing else but money generated in an economy, but never used to spend in said economy. So why worry about that?

      Southern Europe will eventually find out, they live in a very lovely, sunny region with lots of tourism, lots of easy going, but little producing, wealth creating industry.

      So just relax, lay back and watch what will happen. We are not living in dull and boring times.

      Thanks for you hub, indeed we have a crisis going on.