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What really caused the eurozone crisis?

World leaders probably spent more time worrying about the eurozone crisis than anything else in 2011.

And that was in the year that featured the Arab Spring, the Japanese tsunami and the death of Osama Bin Laden. What's more, 2012 looks set to be not much different. But as eurozone governments hammer out new rules to limit their borrowing, are they missing the point of the crisis?

   * The eurozone has agreed a new "fiscal compact"
   * Eurozone leaders have agreed to a tough set of rules - insisted on by Germany - that will limit their governments' "structural" borrowing (that is, excluding any extra borrowing due to a recession) to just 0.5% of their economies' output each year. It will also limit their total borrowing to 3%. These rules are supposed to stop them accumulating too much debt, and make sure there won't be another financial crisis.
   * But didn't they already agree to this back in the '90s?
   * Hang on a minute. They agreed to exactly the same 3% borrowing limit back in 1997, when the euro was being set up. The "stability and growth pact" was insisted on by German finance minister Theo Waigel (centre of image). What happened?
   * So who kept to the rules?
   * Italy was the worst offender. It regularly broke the 3% annual borrowing limit. But actually Germany - along with Italy - was the first big country to break the 3% rule. After that, France followed. Of the big economies, only Spain kept its nose clean until the 2008 financial crisis; the Madrid government stayed within the 3% limit every year from the euro's creation in 1999 until 2007. Not only that - of the four, Spain's government also has the smallest debts relative to the size of its economy. Greece, by the way, is in a class of its own. It never stuck to the 3% target, but manipulated its borrowing statistics to look good, which allowed it to get into the euro in the first place. Its waywardness was uncovered two years ago.
   * 3/9 Italy
     Worst offender
   * 5/9 Germany
     First to break rules
   * 6/9 France
     Offender
   * 9/9 Spain
     Top of the Class
   * But the markets have other ideas
   * So surely Germany, France and Italy should be in trouble with all that reckless borrowing, while Spain should be reaping the rewards of its virtue? Well, no. Actually Germany is the "safe haven" - markets have been willing to lend to it at historically low interest rates since the crisis began. Spain on the other hand is seen by markets as almost as risky as Italy. So what gives?
   * So what really caused the crisis?
   * There was a big build-up of debts in Spain and Italy before 2008, but it had nothing to do with governments. Instead it was the private sector - companies and mortgage borrowers - who were taking out loans. Interest rates had fallen to unprecedented lows in southern European countries when they joined the euro. And that encouraged a debt-fuelled boom.
   * Good news for Germany...
   * All that debt helped finance more and more imports by Spain, Italy and even France. Meanwhile, Germany became an export power-house after the eurozone was set up in 1999, selling far more to the rest of the world (including southern Europeans) than it was buying as imports. That meant Germany was earning a lot of surplus cash on its exports. And guess what - most of that cash ended up being lent to southern Europe.
   * ...bad news for southern Europe
   * But debts are only part of the problem in Italy and Spain. During the boom years, wages rose and rose in the south (and in France). But German unions agreed to hold their wages steady. So Italian and Spanish workers now face a huge competitive price disadvantage. Indeed, this loss of competitiveness is the main reason why southern Europeans have been finding it so much harder to export than Germany.
   * ...and a nasty dilemma
   * So to recap, government borrowing - which has ballooned since the 2008 global financial crisis - had very little to do with creating the current eurozone crisis in the first place, especially in Spain (Greece's government is the big exception here). So even if governments don't break the borrowing rules this time, that won't necessarily stop a similar crisis from happening all over again.

     Spain and Italy are now facing nasty recessions, because no-one wants to spend. Companies and mortgage borrowers are too busy repaying their debts to spend more. Exports are uncompetitive. And now governments - whose borrowing has exploded since the 2008 financial crisis savaged their economies - have agreed to drastically cut their spending back as well. But...
   * Cut spending...
   * ...and you are pretty sure to deepen the recession. That probably means even more unemployment (already over 20% in Spain), which may push wages down to more competitive levels - though history suggests this is very hard to do. Even so, lower wages will just make people's debts even harder to repay, meaning they are likely to cut their own spending even more, or stop repaying their debts. And lower wages may not even lead to a quick rise in exports, if all of your European export markets are in recession too. In any case, you can probably expect more strikes and protests, and more nervousness in financial markets about whether you really will stay in the euro.
   * Don't cut spending...
   * ...and you risk a financial collapse. The amount you borrow each year has exploded since 2008 due to economic stagnation and high unemployment. But your economy looks to be chronically uncompetitive within the euro. So markets are liable to lose confidence in you - they may fear your economy is simply too weak to support your ballooning debtload. Meanwhile, other European governments may not have enough money to bail you out, and the European Central Bank says its mandate doesn't allow it to. And if they won't lend to you, why would anyone else?

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KIEV, March 13 (Xinhua) -- China's role on the world stage will be strengthened after the ongoing annual session of the National People's Congress, China's top legislature, a Ukrainian international relations expert told Xinhua on Tuesday.

Viktor Kiktenko, head of the Far East Department at the Kiev-based Institute of Oriental Studies, said the new leadership that will be elected in the next few days will ensure the continuity of the Chinese foreign policy.

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KIEV, March 13 (Xinhua) -- China's role on the world stage will be strengthened after the ongoing annual session of the National People's Congress, China's top legislature, a Ukrainian international relations expert told Xinhua on Tuesday.

Viktor Kiktenko, head of the Far East Department at the Kiev-based Institute of Oriental Studies, said the new leadership that will be elected in the next few days will ensure the continuity of the Chinese foreign policy.

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NEW YORK, March 13 (Xinhua) -- U.S. stocks reversed early losses to close slightly higher on Wednesday, with the Dow Jones Industrial Average scoring a nine-session winning streak which was the longest in 16 years, bolstered by encouraging U.S. retail sales.

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NEW YORK, March 13 (Xinhua) -- U.S. stocks reversed early losses to close slightly higher on Wednesday, with the Dow Jones Industrial Average scoring a nine-session winning streak which was the longest in 16 years, bolstered by encouraging U.S. retail sales.

The blue-chip Dow inched up 5.22 points, or 0.04 percent, to 14, 455.28. After the gain, the Dow has refreshed record high for seven sessions in a row.

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a total investment of 63300000000 yuan, material needs a few days to complete the work; in addition, it is difficult to carry out all the flood control project,The State Food and Drug Administration confirmed yesterday, Guangzhou Australia Trade Limited company from Australia imported three tons of baby milk powder was found expired. at present about 30% of the restaurants are losing business. catering industry did not dare to substantially increase, the government is big shareholders in Hong Kong,This will be the third consecutive years of increase of MTR fare, company staff do not pay.

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  Its a two good citizen, Dragon Boat Festival dumpling increase also nondestructive sales food costs continued to rise, together with the implementation of minimum wage,ralph lauren, was significantly related to the vital interests of cases, scheduled for February 6 and 7 days of interrogation. Mr. open also display is federal express, said relevant departments of Hunan Province,moncler, tried hard to persuade his wife to go to Hongkong,casque dr dre. but has not received a reply.
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a total investment of 63300000000 yuan, material needs a few days to complete the work; in addition, it is difficult to carry out all the flood control project,The State Food and Drug Administration confirmed yesterday, Guangzhou Australia Trade Limited company from Australia imported three tons of baby milk powder was found expired. at present about 30% of the restaurants are losing business. catering industry did not dare to substantially increase, the government is big shareholders in Hong Kong,This will be the third consecutive years of increase of MTR fare, company staff do not pay.

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high-speed police rushed to the scene, the tank leak out of the material burning.由于现场滞留了大量车辆、人员，且停车点所在的路口村有大量村民，民警立即对武黄高速实施管制，并开始紧急疏散群众。Only the section where Ezhou Du Shan Zhen Lu Kou Cun, the local government on the emergency evacuation of thousands of villagers, nearly 500 passengers stranded at the scene of the company have been evacuated,abercrombie france.

after reading this article, what do you feel?


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now network news a car carrying 23 tons of trichlorosilane truck in Wu-Huang highway near Huang Wu to 36 kilometers and leakage.Yesterday afternoon, after many departments of emergency disposal, near the scene of thousands of villagers, and more than 500 passengers were evacuated expressway.The accident caused no casualties, but Wu Huang high-speed Huangshi to Wuhan direction is blocked for more than 3 hours.

rescue personnel are on the tank cooling.Reporter Gao Xuan perturbation of the










link







field concerned suspect is the high temperature leading to the tank pressure is too high to break through the pressure due to the valve, but the exact cause is still under investigation.At present, the vehicles have to lead the way by a high-speed police, fire trucks escorted to Suizhou Oshio inverted cans.







yesterday afternoon at two thirty-seven PM, high Police Corps of Ezhou brigade suddenly received a report: a vehicle carrying about 23 tons trichlorosilane Wu Huang high speed 36 kilometers to the leak occurred near Huang Wu.At a time when the "five one" long before the vehicle out peak, once the toxic substance diffusion, the consequences will be unbearable to contemplate.High alarm Ezhou brigade immediately start the highway emergency disposal plan, the organization of the police rushed to the scene of emergency, and to the provincial public security department, Ezhou city hall, emergency office, safety supervision, public security,abercrombie, fire control, environmental monitoring and emergency departments to report the situation, various functional departments rapidly to center field assembly.
















at five fifty-two in the afternoon, the scene of fire, plugging operation is completed, confirmed after the elimination of danger, the vehicle began to two-way traffic.The







(the Yangtze River Business correspondent Zhou Qi Xu Hong Xu Xiaofeng)

in Jiangsu,michael kors, Danyang nationality driver Xu, driving brand for "Su LF3951" semi-trailer transport tank car from Jiujiang to Suizhou,abercrombie france, found that the top of the valve at the gas leakage, and car alarm, and separating tank and head.







trichlorosilane under normal temperature and pressure as an irritant odor flow easily volatile colorless transparent liquid.在空气中极易燃烧，在-18℃以下也有着火的危险，遇明火则强烈燃烧,air jordan，燃烧时发出红色火焰和白色烟。SiHCl3 steam can form an explosive mixture concentration range is wide and the air, cause a violent explosion when heated.

, Ezhou fire brigade officers and soldiers arrived at the scene, immediately started the fire,hollister, cooling, clear operation,ray ban.Because of trichlorosilane chemical burning water, so the fire fighters can only use dry powder extinguishing the fire disposal,michael kors outlet.

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Presided over by Zheng Dejiang, the presidium's executive chairman, the meeting made a decision that the list of candidates to the 12th NPC Stand Committee chairman, vice chairpersons, secretary-general and members, as well as of president and vice president of the People's Republic of China and chairman of the Central Military Commission of the PRC, will be handed by the Presidium to NPC delegations for discussion and consultation.

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      industry and information minister Li Yizhong attended the signing ceremony of
      Beijing time 9 pm last night,casque beats, China and the United States Zhejiang Geely Holding Group Company Limited, the Ford Motor Company signed an agreement in Goteborg Sweden, $1800000000 acquisition of 100% stake in Volvo cars and related assets.This pile of private enterprises in China's biggest overseas auto purchase settled.The Ministry of information industry and Minister Li Yizhong attended the signing ceremony.
      2008 January, Geely told Ford proposed acquisition of Volvo, but Ford is no intent to sell stock, proposed to settle a matter by leaving it unsettled,abercrombie france.At the end of the year as the American auto industry crisis,hollister france, 2008, Ford announced its intention to sell volvo.Geely over international rivals, in 2009 October was designated as the preferred bidder and agree to all the important commercial terms last December and Ford acquired.The two sides also after 3 months of negotiation, yesterday signed a definitive agreement.
      planning in accordance with the Geely Group, after the acquisition of Volvo, the new factory will be set up in China with annual production capacity of about 300000 vehicles, the Volvo global annual production increase nearly doubled, and strive in 2011 before the implementation of Volvo Car Corporation profitability.
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      Li Shufu's hand and make a written commitment in terms of no layoffs and ensure Volvo employee benefits, on the other hand, invited the Swedish media and Volvo, representatives of trade unions to access Geely China headquarters, personally for the trade union representatives and the media to answer questions.
      1 at the end of this year, Volvo Union delegation to Geely,abercrombie france, Geely has been satisfactory answers on many key issues.Volvo car Union has also issued a joint statement said Geely Volvo shareholders become accepted.From the union was regarded as "Ji wo love" the biggest obstacle to eliminate.According to the daily economic news
      reporter observed ""       "Ji wolian" happiness is
      Tengzhong failed to "pull" back to the Hummer, "Ji wolian" airness, Geely Volvo last night in the two parents under the witness, finally sweet held a "wedding ceremony".As the Chinese independent brand car enterprises, the Chinese car enterprises complete Geely acquisition of international well-known auto Brand Company "she Tunxiang" precedent.
    &nbsp,air jordan; however, "love" may not be too difficult, the future of "marriage" is really not easy.
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Presided over by Zheng Dejiang, the presidium's executive chairman, the meeting made a decision that the list of candidates to the 12th NPC Stand Committee chairman, vice chairpersons, secretary-general and members, as well as of president and vice president of the People's Republic of China and chairman of the Central Military Commission of the PRC, will be handed by the Presidium to NPC delegations for discussion and consultation.

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recently, boys robbed case occurred in Qiuxian.In December 5th, the Handan Municipal Public Security Bureau disclosure, robbed the boy Xiao Ming (alias) only one and a half years old, who was at the door and 3 year old sister play, be a man get on the car was speeding away.Police received a report immediately after the establishment of the ad hoc group, after 5 days of continuous fighting, robbed the boy was rescued, 3 suspects were all arrested.

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recently, boys robbed case occurred in Qiuxian.In December 5th, the Handan Municipal Public Security Bureau disclosure, robbed the boy Xiao Ming (alias) only one and a half years old, who was at the door and 3 year old sister play, be a man get on the car was speeding away.Police received a report immediately after the establishment of the ad hoc group, after 5 days of continuous fighting, robbed the boy was rescued, 3 suspects were all arrested.

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recently, boys robbed case occurred in Qiuxian.In December 5th, the Handan Municipal Public Security Bureau disclosure, robbed the boy Xiao Ming (alias) only one and a half years old, who was at the door and 3 year old sister play, be a man get on the car was speeding away.Police received a report immediately after the establishment of the ad hoc group, after 5 days of continuous fighting, robbed the boy was rescued, 3 suspects were all arrested.