Rehn said “To beat the crisis, we have taken action to deal with short, medium and long-term challenges. For the short-term, we had to stabilise financial markets so as to avoid the free fall of our economy. For the medium term, we need economic reforms for sustainable growth and job creation. And for the long-term, we needed to redesign the architecture of European Monetary Union”.

Mersch, as a central banker had to concentrate on the capital market. He stressed that “Governments have recognised that certain powers need to be at the European level for a Single Market to function. But what we have seen in the crisis is that we do not yet have the right powers at the European level to support a Single Market in capital…We see Banking Union, therefore, not only as a necessary complement of monetary union but also as a way of putting in place the necessary institutions, rules and instruments to sustain a genuinely single financial market”.

Who is responsible?

Let’s see if they are telling the truth. No doubt they are absolutely right that the EU is still fighting the repercussions of the crisis and tries to fill the institutional holes in the EU’s edifice. Speaking about the crisis the two top EU officials should have said a few words about its causes. None of them however mentioned that the German and the French banks kept lending money to Greece until the spring of 2009 that is almost two years after the first sings of the crisis were quite visible and the ECB had already sounded the alarm, even from September of 2007.

The Greek borrower

The Greek minister of Finance at the time Yiannis Papathanassiou had boast in March of 2009 for his high performance as a borrower. He stated that the Greek exchequer ‘under his guidance’ had borrowed in the first two months of that year €50 billion. This kind of money was of the order that could make or break Greece and as everybody learned some months later the poor country ended up totally broke.

Of course the Greek government wasted the €50bn as they had done with previous loans. Their ‘policy’ was to use the loans to appoint thousands of their political clientele in the public sector. The money was also misappropriated by corrupt politicians. Akis Tsohatzopoulos, the No2 in all Costas Simites governments from 1996 to 2004, is on trial today for money laundering and for taking bribes. From 2004 until 2009 the two Costas Karamanlis governments hired 850,000 more people in the public sector, as Leonidas Grigorakos, the deputy minister of Interior revealed yesterday in Athens.

The bank connection

However the Greek and the other mindless EU governments didn’t do it alone during the party years of the first decade of the new Millennium. All the major EU banks kept lending them hundreds of billions of euro without a second thought. Greece was borrowing at the same interest rate as Germany. No worries if those loans were ever to be repaid. It was enough to write the loans as ‘assets’ in the bank’s balance sheet, thus fattening the bonus of the banker at the end of the year. The bonuses to bankers for approving that kind of lending were so huge, in the area of millions annually, that one year’s take home pay was enough to support a family for a lifetime. Consequently the lenders are equally responsible as the fraudulent and mindless Greek politicians now in the hands of the penal justice. Unfortunately no banker has been put behind bars.

It’s deplorable that a Commission Vice President and a Member of the Executive Board of the ECB didn’t make the slightest reference to such actions of bankers and politicians which caused the worst economic crisis of Europe after the WW II. Not even a word about how dearly the average European pays for the ‘party’ held for years by a handful of people. Both speakers enjoyed the trip and the stay in the Alpine landscape of Alpbach and recited once more the recipe for Eurozone to come out from the crisis, at a dear cost paid by the many.

In short Rehn and Mersch didn’t say a word on their experience from the crisis nor on what caused it neither how much the average European pays for it.

Republished by permission from Europeansting.com.

The IMF approved a $6.2 billion precautionary line of credit for Morocco over two years, which it said the government would treat as “insurance” in case economic conditions deteriorate and it faced sudden financing needs, according to Reuters.

“The Moroccan authorities have stated that they… do not intend to draw on the line, unless Morocco experiences actual balance of payments needs from a deterioration of external conditions,” the IMF said in a statement.

The IMF board also approved a $2 billion loan to Jordan, announced last month.

Jordan faced a series of exogenous shocks, beginning in 2011. Repeated damage of the Arab Gas Pipeline prompted an increase in imports of expensive fuel products for electricity generation. At the same time, regional tensions adversely affected tourism, remittances, and foreign direct investment. As a result, the current account deficit widened and growth slowed. The social impact of these shocks was contained because the authorities accommodated it by increasing subsidies and wages, financed by grants.

”Jordan is facing external and fiscal challenges stemming largely from exogenous shocks to its energy sector. These shocks have put pressure on the external accounts and increased the deficits of the central government and the public electricity company.

Separately, Morocco has been struggling with drought and the sovereign debt crisis in the eurozone, which is Morocco’s biggest trade partner.

IMF Managing Director Christine Lagarde said Morocco’s economic policies have contributed to strong growth, low inflation and a resilient banking sector. But the country has been hard hit by a decline in trade from the euro zone.

“High oil prices have contributed to a build-up of fiscal and external pressures. “The authorities have already taken action to address these vulnerabilities, and are committed to maintaining sound policies,”

 Legarde said.

Jordan is the first Arab country to formally request assistance from the IMF since the Arab Spring.