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Old 14th Jun 2012, 09:48
  #1484 (permalink)  
Join Date: Mar 2008
Location: London
Posts: 759
I'm not surprised Big Macs are so cheap in India - they probably can't give 'em away given the no. of vegetarians. I am surprised at why the cost of living appears so low in the Ukraine. Why is this?

Meanwhile, from today's Telegraph:

The Redemption Pact covers all public debts of EMU states above the Maastricht limit of 60pc of GDP, roughly 2.3 trillion. It is modeled on Alexander Hamilton's Sinking Fund in 1790 to clear up legacy debts after the American revolutionary war.

The idea is to treat the first decade of monetary union as a learning experience -- with mistakes made all round -- and allow a fresh start. The excess debt would be paid down over twenty years.

The beauty of the proposal is that would return Europe to the Maastricht discipline where each state is responsible for its own debts. It is the exact opposite of fiscal union.

Officials at Germany's top court say it appears compatible with the country's constitution -- unlike eurobonds. There would be a fixed limit to costs and the fund would not endanger the tax and spending sovereignty of the Bundestag.

The debt would be covered by joint bonds, payed for from a designated tax. Each country would be responsible for its own share of debt in the fund -- Italy 960bn, Germany 580bn, France 500bn, and so forth -- but would issue bonds jointly.
Neat idea. I wonder if it would actually work?
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