BANKER ON HOW TO SOLVE DEBT CRISIS: The Public Needs To Work Harder For Less Money And 50% Fewer Benefits

BUSINESS INSIDER-An investment banker from BarCap recently told the Forum of Economic News that he's got the solution to bring "competitiveness" back to the European Union.

Cut benefits by half, and make everyone work harder.

The comments from Hans-Jörg Rudloff, the head of the Management Board of investment bank Barclays Capital, will obviously infuriate the public, who will remember that BarCap paid out bonuses that were so good this year that bankers gathered at a bar immediately after work for a champagne toast to everyone receiving "at least a £600,000 bonus."

Here's a transcript of what he said:

"Europe is carrying a social rucksack, which makes us uncompetitive in this world. We have provided living standards for our populations which are unheard of, which no one ever thought would be possible, for the last 50 years."

"People do not want to give up these living standards."

"Populations are not ready to voluntarily discipline themselves in more work, less rewards, and less security. And it's only [natural] that the population would react like this and here, its a question of democratic leadership and a question of whether indeed we are able to reinvigorate ourselves and to state public ally in this world that that we want to be competitive."

This is what Rudloff says the EU has to do:

• Half of the social benefits have to go 
• People have to work more, longer hours, longer years.
• Otherwise, it is impossible to continue to fund the present system of today. 
• Promote communication and the free movement of people and the immigration from all European countries will push us to a much strong union.

Watch a video of his speech by clicking here

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EU leaders reach deal on debt crisis

European leaders reached agreement in the early hours of this morning on how to tackle the debt crisis afflicting the nations using the single currency, with significant concessions from Germany.

Wiki Commons/Lars Aronsson

Philip Aldrick
Telegraph

"The fundamental path was hacked open," German Chancellor Angela Merkel said.

Along the way, Mrs Merkel made some serious concessions, which might cost her when she faces her electorate at home.

Together with her eurozone counterparts, Chancellor Merkel agreed to boost the region's bailout fund, the European Financial Stability Facility (EFSF), so it can lend the full €440bn (£380bn) that it initially promised.

Up to now, the EFSF was only able to lend about €250bn because of several buffers required to get a good credit rating - fanning fears that it would not be big enough to save a large country like Spain.

The fund will also be allowed to buy the bonds of governments in financial difficulties on the open market, but only if the respective country is locked into a national bailout program based on strict conditions.

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EU, IMF Bailout of Ireland Worth $32,000 per Citizen

Investment Watch Blog

That’s like bailing out the entire US national debt.  If this happens in all the PIIGS countries, Europe is in REALLY deep doo-doo.

According to MarketWatch:

The International Monetary Fund, European Union and European Central Bank are preparing a 120-billion-euro ($164 billion) bailout of Ireland, requiring the country to raise taxes and nationalize more banks, the Sunday Times of London reported.

The plan, which would exceed the 110-billion-euro bailout created for Greece, could be unveiled as early as Monday morning, the paper reported.

Ireland’s cabinet is meeting in an emergency session this weekend to complete a four-year budget, the paper reported. The budget is also set for release this week, the Sunday Times reported.

A property tax of 500 euros a house plus more public-sector cuts are expected to be part of the plan, the paper said.

A team that is figuring out how to restructure Ireland’s banks is also developing a proposal for a wealth tax on the country’s richest citizens, the Sunday Times reported.

France and Germany are pressuring Ireland to raise its 12.5% corporate-tax rate, the paper reported.

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Why the Irish Crisis is Going Global

Rick Newman
US News 

You may not have to worry about Ireland in a week, or a month. But at the moment, the Emerald Isle is causing global investors a whole lot o' anxiety.

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On the surface, it's reminiscent of the problem Greece had with its unmanageable federal debt early this year, which shook world markets, ended a global rally in stocks and ultimately led to a $146 billion bailout by the European Union and the International Monetary Fund. Greece spent more money than it took in for years, papered over the gap, and essentially became insolvent when it could no longer borrow the money needed to finance its debt.


Ireland is on the brink of insolvency too, which has helped drive down the S&P 500 stock index by nearly 4 percent over the last few days. But unlike Greece, Ireland is a relatively wealthy country, with per capita GDP of nearly $38,000. That's 21 percent higher than per capita GDP in Greece, and in the top third for European countries. Low corporate tax rates and a skilled workforce have made Ireland a haven for some of the world's biggest companies. And its public debt, about 65 percent of GDP, is far below Greece's crushing load, which is 126 percent of GDP. Ireland's debt levels are even lower than those in France, Germany and the United Kingdom.

But Ireland has one huge problem that may soon make it a supplicant to its European brethren: A failed banking sector that Ireland's government can no longer rescue on its own. Ireland is in the midst of a real estate bust that could trump even the ruinous downturns that turned parts of southern California and Nevada into suburban ghost towns, with home-grown banks stoking it all. Now, those banks are trying to manage catastrophic losses. The Irish government has effectively nationalized the nation's biggest banks by guaranteeing their debt, which would be akin to the U.S. government taking over Citigroup, Bank of America, J.P. Morgan Chase and Wells Fargo.

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That means the Irish government is also on the hook for the losses those banks endure--which have risen far beyond initial estimates, and may have a lot farther to go. So far, the Irish government is obligated to cover losses amounting to 175 percent of Irish GDP, which is becoming an unsustainable burden. "If the Irish banks go down, the Irish government also goes down," says economist Jacob Kirkegaard of the Peterson Institute for International Economics.

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