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European experts call for a stability fund other than ' Austeritario '

Similar to the Monetary Fund (FME) that the Commission defends, would be valid for crises but applicable for vulnerable countries and for the rich

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European experts call for a stability fund other than ' Austeritario '

The proposal is signed by final conference of ADEMU (for its acronym in English) A project for a dynamic economic and monetary union, closed in Florence. The project has involved for almost five years a wide network of researchers in support of deepening architecture of euro.

The idea of FEE ( EMU after euro crisis: lessons and possibilities, CEPR Press) would fit ( how) in FME (what). With differences. It does not seek to materialize rescue of vulnerable doblegados by crises and in need of emergency assistance. But also "stabilize situation in normal times", as highlighted by professors of Florencia Árpád Abraham (Budapest) and Ramon Marimón (Barcelona), coordinator of Ademu.

It is not based on rescue contracts of limited duration and refore besieged (of seven or ten years, like those that IMF signs with countries in need of aid), but of very long term, after an audit on risks that affected country exhibits. In order to "build trust, rar than unleash stigma and resentment."

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Not to purge sins

The cornerstone of that contract is a new conditionality. Different from that imposed by IMF on Latin American or Asian countries, or one that applied Community bailout fund or European Stability Mechanism (MEDE) in Ireland or Greece. Both tended to a great austeritaria hardness, as a purge against presumed wasteful sins of excessive debtor.

Ex-Ante was implanted (prior to granting of support, sometimes of each tranche), so that beneficiary population tended to feel violated by imposition of a very specific recipe, which had not helped to forge.

The experts of Ademu argue, on contrary, that conditions part of proposals of affected, so that everyone could internalize (holds ir ownership, ir property); And that it materialize time after initiating contract, ex-post and over a long term (around 30 years). And with flexibility, so that if economy of needy improves sooner than expected to repay loan also earlier, as Spain has tried seven times with European bank bailout loan, without achieving it.

It is not a question of forgiving free debts, but of aid, always linked to ir repayment. "I don't forgive you, but I help you, but not for free," summarized Professor Giancarlo Corsetti.

The question arises as to wher country helped will be responsible for its return: "So far we have seen not always positive or effective effects of sanctions or threat of sanctions; We believe more in efficacy of carrots ", because what is played is not a stick in knuckles but its prestige and its future to markets, reasoned Marimón.

The philosophy of encouraging more than punishing is also worth to prosperous or surplus countries which also have difficulties, but inversely to those of vulnerable and deficit.

Because approach flees from — already consecrated as perverse — permanent transfers from rich to poor. The best placed can also suffer crises or asymmetric shocks tomorrow, and FEE, which in time of bonanza can be nourished of its contributions, n have to scratch pocket to support m.

The FEE should in this field be linked to procedure of Macro imbalances (PDM, of 2011). It pursues oretically — but virtually never sanctions — those who, like Germany, have excessive (commercial or fiscal) surpluses: not for ir success, but for not applying m to multiply domestic economic growth and consequently eurozone.

Well, absence of sanction "damages credibility" of mechanism. And again carrot would solve dilemma: se countries could "contribute to fund with part of what would be a oretical fine," argues Ademu. And in weak junctures y could take advantage, m also of reserves which accumulated like ants.


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