15 YEARS AGO
"I'm sorry about the mess, Mr Samaras often does than when he comes for talks."|
In May 1997, Ivan Kostov was elected as Bulgaria's President, after a mass protests took place against Bulgarian SocialistParty's government which had led the country to hyperinflation and a complete crisis, and those protests ultimately led tothe fall of the government. This became the country's first post-communist government to serve its full 4-year term.He iscredited with turning around his country's fortunes, starting sustainable economic growth, and establishing a path towardsBulgaria's complete integration with the West. Under his government, long-delayed economic reforms were carried out,including privatization of state-owned enterprises was carried on a large scale and the country started long-sought acces-sion talks with the European Union. However, there were serious allegations of massive mismanagement and corruption.A number of major enterprises were sold out apiece under the label of "privatization", and all of them eventually bank-rupted. Capital stocks of state companies were deformed by government officials, while their equipment was sold.
It's conditionality, stupid
Europe's problems have apparently been solved, Mario Draghi theillustrious President of the European Institution based inFrankfurt that is the European Central Bank has officially declared that Euro bonds can now be bought in unlimited quan-tities and this will be the key for the road to recovery. It may justbe the saving grace Europe needed.On the same day as his announcement, the markets rallied, thecurrency rose and positive statements were the only course of the day.Draghi did not fail to also state that his outlook was downwardand that the situation remained at low growth and high inflationbut that 2013 could be different, further details on that press con-ference and wider repercussion are on page 4 by our correspondentPeter Taberner, including Draghi's persisting phrase that “theECB would go to all costs to ensure the stability of the Euro.” This was a week of hard figures, the Eurostat indicators releasedshowed a first estimate for the second quarter of 2012, where theEuropean Union of 27 Member States showed a current accountsurplus of €4.6 billion, a €32.5 billion surplus on trade in services.European Commission President Jose Manuel Barroso said that,"The logic of integration cannot be only economic. Bankingunion requires a single European supervisor for the Euro area.Further economic union, too, requires supervision of the memberstates' economic policies, joint supervision. It is therefore logicalbut also right and just that there is further political or institution-al integration as well."Calling for a tighter and more democratic political unionPresident Barroso stressed the pertinence of a Banking Union andthe accountability this required.On the 12th this month President Barroso said he would be pre-senting his “proposal for a single supervisor on the Euro area.""We must end this vicious circle when rescuing banks weakensthe governments' budgets while increasing risk-averse banksstop lending to businesses and that can undermine the econo-my further.""The single banking supervisory mechanism does not require a Treaty change and should be in place by January 2013."On an upbeat note from the world markets due to this shift fromthe ECB, a mixed figure came from the US economy whichadded 96,000 jobs in August according to the U.S. Bureau of Labor Statistics, a figure lower than expected however unemploy-ment did drop to 8.1% from 8.3%.In Strasbourg this week President Barroso is expected to focus on ways to tackle the Eurozone crisis and to advocate an ambitiouslong-run EU budget for growth and as far as the Banking Unionis concerned, MEPs will quiz Commissioner Michel Barnier onhis banking union plans.European economic think tank Bruegel's senior research fellow Andre Sapir commented on 7 September that the word of the day was “conditionality”, going back to the essence of the matter on what Member States implement or not is the key for futuregrowth.Ever looking for a closer political, Fiscal Union and conditionali-ty from the Member States was a repetitive cry from Jean Claude Trichet, the former President of the European Central Bank, whostated in an op-ed last week that what was necessary was theestablishment of “a eurozone finance ministry … responsible foractivating economic and fiscal federation when and where neces-sary, and for managing new crisis-management tools like theEuropean Stability Mechanism..Also be responsible for oversee-ing the banking union, and it would represent the eurozone in allinternational financial institutions and informal groupings.But, most important, “federation by exception” would ultimately cease to be an exception. The finance minister would be a mem-ber of the EU’s future executive branch, together with the otherministers responsible for other federal departments.From this perspective, the Commission presages a futureEuropean democratic government, as German Finance Minister Wolfgang Schäuble, who has proposed instituting an elected pres-ident, has suggested. The Council, meanwhile, appears to antici-pate the European Parliament’s future upper house, with the lowerhouse already elected by all EU citizens.More Federation to come? Is that the only answer for the Euronow?
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ISSN number: 1106-8299
9 - 15 September, 2012