Arab Today, arab today eurocrisis buzzwords made easy
Last Updated : GMT 19:53:43
Arab Today, arab today
Arab Today, arab today

Eurocrisis buzzwords made easy

Arab Today, arab today

Arab Today, arab today Eurocrisis buzzwords made easy

Berlin - DW

As the euro crisis becomes more threatening, understanding the buzzwords is becoming more difficult. This guide explains of some of the terms politicians and economists have been throwing about. Bonds These are a very important element in the eurozone crisis. Everything revolves around bonds issued by national governments, known as government bonds. They\'re the main reason why a country becomes financially unstable, or may even go bankrupt. Governments obtain money for their national budgets from investors through government bonds, as well as through national debt. The money is then paid back with interest over a period of six months, three years, or six to ten years. Government bonds were long considered a low-risk investment, but the eurozone crisis has changed all that. Now, investors are only willing to invest in countries in financial crisis if the risk they take is a profitable one. Generally it is, because these governments urgently need the money and are therefore willing to pay a much higher rate of interest. The interest rate is a good indicator of whether a government\'s finances are likely to recover. If the interest rate of long-term government bonds (to be paid back in six to ten years) exceeds seven percent, the government will be too deeply indebted to bounce back. At this point, the country needs aid in the form of a bailout. Banking union In times of crisis, the EU must first and foremost rebuild confidence. This is where it would be useful to have a banking union. The name alone conjures up solidarity and trust. There have already been discussions about replacing national banking supervision with a coordinated European banking supervisory authority. There could also be a common European deposit protection that would protect deposits in European bank accounts. But this is problematic, particularly for Germany. German credit institutions don\'t want to take indirect responsibility for ailing banks in other countries. It\'s also unclear who would take on the role of banking supervisor. The EFSF, whose headquarters are in Luxembourg, celebrated its second anniversary on June 7, 2012. The organization can borrow up to 440 billion euros ($589 billion) on the financial markets. The EFSF pays money back at a low interest rate because the wealthy eurozone countries are its guarantors. The rescue fund can give money to ailing countries when other lenders won\'t. If the EFSF collapses, Germany is liable for 211 billion euros ($259 billion), more than two-thirds of the country\'s annual tax revenue. The EFSF is to be replaced by the ESM (European Stability Mechanism) by mid-2013 at the latest. ESM - European Stability Mechanism The ESM is scheduled to permanently replace the EFSF (European Financial Stability Facility) by mid-2013. The main difference between the ESM and EFSF is that the eurozone countries will be paying real money into the organization. In the EFSF, the wealthiest countries currently act only as guarantors. The ESM has up to 500 billion euros ($614 billion) in loans on hand with which it can buy government bonds from or give money directly to ailing countries. At 27 percent, Germany is the biggest guarantor and provides the most money to the ESM. The ESM was actually supposed to be ready to start work in June of this year, but the German Constitutional Court is still reviewing its status. The EU expects a decision from the court by September at the earliest. ESM banking license Every commercial bank needs a banking license if it wants to borrow money from the European Central Bank (ECB). It must also provide security in order to receive the money. Those who have financed European bailouts want the ESM (European Stability Mechanism) to receive a similar banking license. That way, the ESM would have considerably more money with which it could help eurozone countries, either by purchasing government bonds or by raising loans.  A banking license would enable the ESM to use these government bonds as security for the ECB. That would then allow the ESM to borrow endless amounts of money and use everything in its power to rescue Europe, according to those who support the idea. Critics argue that this kind of banking license would violate existing EU agreements.

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today eurocrisis buzzwords made easy Arab Today, arab today eurocrisis buzzwords made easy

 



Arab Today, arab today
Arab Today, arab today Saudis await visitors but will they come?

GMT 11:54 2017 Thursday ,23 February

Saudis await visitors but will they come?
Arab Today, arab today Sarah Belamesh designs antiques of "ceramic"

GMT 19:45 2017 Monday ,20 February

Sarah Belamesh designs antiques of "ceramic"
Arab Today, arab today Blind sheikh buried in Egypt

GMT 06:32 2017 Thursday ,23 February

Blind sheikh buried in Egypt
Arab Today, arab today Media host Mona Iraqi stresses her show's success

GMT 15:32 2017 Wednesday ,22 February

Media host Mona Iraqi stresses her show's success

GMT 16:32 2017 Wednesday ,22 February

US Treasury chief tells IMF to monitor currencies

GMT 16:08 2017 Wednesday ,22 February

Qatari banks merger to rebalance financial sector

GMT 05:57 2017 Wednesday ,22 February

Britain risks clash with EU over RBS bailout

GMT 05:26 2017 Wednesday ,22 February

Singapore carbon tax would hit refiners, help renewables

GMT 05:18 2017 Wednesday ,22 February

Chinese PM: US should avoid ‘trade war,’

GMT 20:59 2017 Tuesday ,21 February

Economy good, but homes in German cities overpriced

GMT 05:29 2017 Tuesday ,21 February

Sovereign funds pulled $38bn from markets in 2016
View News in Arabic - Business: نفط وبتروكيماويات
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today To hold social dialogue over secondary school

GMT 07:43 2017 Wednesday ,22 February

To hold social dialogue over secondary school
Arab Today, arab today UK appoints 1st Scotland Yard chief in 188 years

GMT 05:14 2017 Thursday ,23 February

UK appoints 1st Scotland Yard chief in 188 years
Arab Today, arab today Ex-yoga missionary unleashes rage

GMT 12:16 2017 Thursday ,23 February

Ex-yoga missionary unleashes rage
Arab Today, arab today Pluto's unruly moons

GMT 06:31 2015 Thursday ,04 June

Pluto's unruly moons
Arab Today, arab today Tesla back into red but revenue grows

GMT 07:27 2017 Thursday ,23 February

Tesla back into red but revenue grows
Arab Today, arab today Nissan enhances sales in most markets

GMT 14:08 2017 Monday ,20 February

Nissan enhances sales in most markets
Arab Today, arab today Salma Rashid happy for 'A Whisper of Love'

GMT 05:19 2017 Tuesday ,21 February

Salma Rashid happy for 'A Whisper of Love'
Arab Today, arab today Milan laughs while Rome cries

GMT 10:28 2017 Wednesday ,22 February

Milan laughs while Rome cries

GMT 06:41 2017 Monday ,20 February

Janat pleased for issuing 'Good Morning'

GMT 12:35 2017 Tuesday ,21 February

63-Year-Old Woman Delivers Baby

GMT 14:29 2017 Monday ,20 February

Prepares to present her new collection

GMT 15:53 2017 Tuesday ,21 February

Small ponds have outsized impact

GMT 23:29 2017 Thursday ,16 February

Home built on sand castles-style costs $8m

GMT 07:51 2017 Wednesday ,22 February

Mom's immune system accepts babies

GMT 17:46 2017 Saturday ,18 February

Tourist guide reveals methods of tourist attractions

GMT 13:12 2015 Saturday ,09 May

Sheikh Sultan opens Sharjah Centre

GMT 19:10 2017 Friday ,17 February

Hats, scarves add beauty to women
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday