Austria calls for fixing the value of the euro before 2013

The idea of the common European currency in the early seventies of last century, but have not been realized until reaching the Maastricht Treaty or the Treaty on European Union in 1992, which established norms, as well as a road map aimed at achieving a monetary union and economic, which led to the official announcement of the launch of the euro as the "Securities book-entry" - that is to deal in bonds and money only - in 1999 and the start of instrument traded currencies and the euro banknotes in 2002.

The euro was a major step on the path to European integration. The euro is now the second largest global currency after the U.S. dollar.

December 1999: EU summit identified in The Hague formally launch the goal of a unified European currency and charged the Prime Minister of Luxembourg at the time, Pierre Werner, to draft a report on the launch of currency before 1980.

October 1970: Warner proposed a plan to develop three phases of a single currency, which must include a transition to a free goods within the European Economic Community and install the equation between the values of currencies.

March 1979: entered the European Monetary System Hiv implementation, a mechanism for the exchange rate and the unity of the European currency.

February 1992: The signing of the Treaty of Maastricht in the Dutch city of Maastricht, to put a time frame and a standard to join the euro.

January 1994: I was the launch of the European Monetary Institute, the first core of the European Central Bank.

Dec 1995: launched a European summit in Madrid on the name of the single European currency the euro.

December 1996: Development of European leaders in Dublin Stability and Growth Pact, which calls for countries of the single currency following the strict guidelines of the budget on a sustainable basis.

May 1998: launched a European Union summit in Brussels, officially the euro, to confirm the initiative 11 countries using the currency. These countries are Belgium, France, Germany, Italy, Spain and the Netherlands, Luxembourg, Portugal, Austria, Finland and Ireland.

July 1998: resolving the European Central Bank replaced the European Monetary Committee, and took from Frankfurt, Germany-based.

January 1999: euro was formally launched after proving equation between the values of currencies are not irreversible. Three days after the European currency began trading in currency markets.

October 25, 2000: The euro fell to 0.8252 dollars, its lowest level so far.

Jan. 2002: printing and issuing currency euro notes and coins.

September 2003: Swedes voted against adopting the euro.

Jan. 2007: Slovenia has become the member of the 13 euro-zone.

Jan. 2008: Cyprus and Malta joined the euro zone.

April 22, 2008: The euro reached a level of $ 1.60 dollars in New York trading, the highest level to date.

January 2009: Slovakia joined the euro zone, to become a member of the 16 euro-zone.

October 20, 2009: The Greek government approved the continuation of the country's budget deficit, to exceed 12% of the total GDP of the country in 2009, which far exceeds the deficit ceiling rate set by the EU at the level of 3% of GDP. Then lifted the Greek debt crisis after agencies cut credit ratings three global level of sovereign credit to Greece.

May 2, 2010: The EU leaders agreed to revitalize the aid package to Greece, as well as the International Monetary Fund, to provide 110 billion euros Pmaiedl $ 146 billion over three years, is like the first rescue operation ever for a member of the euro zone.

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-29 October 2010: EU leaders adopted a reform plan to prevent recurrence of the crisis of sovereign debt, and agreed to tighten budget controls and enter the rules to oversee the macro-economy and have improved coordination of economic policies and put a permanent mechanism to resolve crises in the euro zone. This was the ambitious plans is the largest in the euro zone.

January 2011: Estonia's accession to the euro area on Saturday to European Union countries that use the euro as its official currency, becoming the No. 17 in the euro zone at the time of the region remains mired in debt crisis.

It is worth mentioning that the euro zone is the monetary union had all its member states to abandon their currencies, but the former authorities and the transfer of national monetary policy to the European Central Bank in transition, based in Frankfurt, Germany. And manages the European Central Bank and European System of Central Banks, which consists of the central banks of member states, the affairs of the euro.

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America provides GMAC with $ 3.8 billion to rescue

WASHINGTON: The U.S. Treasury Department that it will provide financial services group, "GMAC", which was formerly a subsidiary of "General Motors" $ 3.8 billion dollars, according to findings of the assessment program capital controls.

The ministry said in a statement: It is due to a number of factors, including restructuring, "GM" and "Chrysler" without affecting the "GMAC" undertake the ministry to provide the group at $ 3.8 billion dollars in addition to the amount previously announced a $ 5.6 billion .

The ministerial statement reported by the Kuwaiti news agency "KUNA" that the measure would result in a decrease of $ 1.8 billion from its previous forecast for the costs of the program to save the troubled assets.

The statement said that such assistance brings the total government spending of public funds to rescue the group to 16.3 billion dollars. Thus increasing the State's share in the group of 35 to 56% of the Group's capital

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IMF warns Pakistan of continuing budget deficit

Washington: International Monetary Fund urged in his speech, the Pakistani government to take immediate action to reduce public spending, warning of further aggravation of the economic situation of the country.

The newspaper "The Wall Street Journal" America that the IMF believes that Pakistan needs to achieve growth of between 8 and 10% at least in order to absorb the annual increase in its workforce and reduce poverty.

Said Paul Ross, the UNFPA representative in Pakistan: "It is very important for Pakistan to achieve higher growth in order to fight poverty and provide jobs for about two million people enter the job market every year, pointing out that the external debt of Pakistan stands now at more than $ 53 billion in spite of pay more than $ 6 billion in the last three years. "

The newspaper said the U.S. report that the IMF did not spend any loans to Pakistan since last May, not even the victims of flood aid worth $ 450 million, and other donors did not provide any loans.

The news agency quoted the country, "Qana", the paper suggested that the United States of America sought to contribute to the pressure from the IMF on the Pakistani government to make economic changes, which led to the suspension of funding the $ 3.5 billion in 2010 out of loan package a total value of $ 11.3 billion to Pakistan in the context of pressure on them.

The newspaper said that the rate of budget deficit of Pakistan has already 6% higher than the deficit target of 4% due to failure in the application of general sales tax and curb expenditure, which had promised to make the IMF borrowing against it. One of the problems faced by Pakistan that those who pay taxes, only about two million who are mostly professionals and the staff of the middle class out of the country's population, which numbered about 180 million.

Analysts say delays in the implementation of tax reforms may lead to larger deficits in the budget, noting that the failure of Pakistan to complete the IMF program could hurt the country's ability to access international capital markets have hurt investment flows.

Said JR Mudassir Malik, Executive Vice President of the company, "BMA Capital" of the brokerage: "The ability of Pakistan to access the capital market could be hurt significantly, while worried about the IMF and the World Bank and major countries like the United States and European countries and Japan that the economy of Pakistan has paralyzed in light of rising rates of inflation

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Financial reforms urgently waiting for the European economy

Greece has caused the recent financial crisis to draw attention to the differences in the pace of growth observed between the European Union, which necessitated the call for a radical structural reforms on the basis of the European economy in order to avoid the occurrence of any future crises of the Member States.

Was confirmed in that regard the European Commission is the executive organ of the European Union economic growth in the euro area draws many challenges and obstacles, particularly the expansion of unemployment for up to 10% and 9.6% in the countries of the European Union.

The Commission in its official report that the financial and economic crisis plaguing a number of Alni Union countries, which requires him to do deep reforms.

The call by UNHCR to undertake significant reforms on the basis of the euro zone economy at a time when the European institutions, sparked heated debate on the feasibility of establishing a so-called European economic government.

Germany is opposed to the first economic power in Europe this trend, backed by France and the European countries of the South.

In the view of several European countries that the performance of the German economy based on exports, without focusing on domestic demand detriment of the European economy with modest performance, which faces fierce competition by the German exports in particular.

And invited the European Commission in its report in the Saudi Press Agency "SPA" All of Germany and the Netherlands specifically to stimulate the internal market and encourage the demand rather than to focus only on exports to foreign markets.

Crisis Greece

Unlike the negative impacts of the global crisis on the European economy was fiscal mess facing Greece is currently a pressure on the European currency as the return of the crisis to the arrival of the percentage of deficit in the budget for Greece to 12.7% of GDP, which is more than four times the limit allowed by EU agreements with increased debt to Athens to 300 billion euros.

And the crisis that necessitated the application of Greece strict austerity measures aimed at providing about 4.8 billion euros to support plans to reduce the budget deficit to be within 8.7% as a percentage of GDP of Greece.

The European Commission expressed its support for the new procedures announced by the Greek government, noting that Greece is moving on the right track now about to reach the target rates of reduction of the budget deficit during the current year.

However, the crisis necessitated the intervention of Greece Mali, where European Union leaders expressed their approval to approve the financial plan funded by the euro-zone countries and the International Monetary Fund to save the Greek economy which is facing a severe financial crisis.

Said Jose Manuel Barroso, President of the European Commission "I think this a good decision at this time to face a special problem with one of the Member States of the Union, taking into account the consequences of this problem on the stability of our economy and monetary unity."

The rescue plan in the participation of Greece, the International Monetary Fund to secure part of the loans they need in Greece holds the European countries to provide loans on a bilateral level.

The questions focused on the size of contributions from the International Fund and loans provided by Member States, ranging from Greece is a need for the reimbursement of debts within the months of April and May between 25 and 27 billion euros

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The credit crunch has shattered America's neoliberal dream

With money comes great influence: political, ideological, even sartorial. The doublet and hose of Henry VIII were copied from the lavish dress of rich Florentine and Venetian merchants at the height of the Renaissance; sombre suits spread throughout the world in homage to the Victorian gents who commanded the British empire, and the jeans and T-shirts of today's teenagers were born in the United States, the 20th-century hegemon.

In their new book, The End of Influence (subtitled What Happens When Other Countries Have the Money), the economists Stephen Cohen and Brad DeLong argue that the supplanting of the US by other rising economic powers will have seismic consequences for a world that has spent the best part of the past century buying up the American dream and all its accessories – from Coca-Cola to schmaltzy Hollywood movies, hamburgers to irritating conversational tics ("like, whatever!").

"Because America had the money – had it solidly, rightfully, self-assuredly, and durably – for about 100 years, people all over the world wanted to be like Americans: successful, modern, loose-jointed, efficient, democratic, socially mobile, leggy, clean, powerful, and, of course, rich," they say.

Today, the US is in hock to China to the tune of $800bn (£520bn) in treasury bonds, and potentially a much larger sum in shares and other *investments, after a decade-long borrowing binge by governments, families and corporations. Even before the crunch, that shift made it inevitable that the US model would lose its allure. But the crisis, which had its roots in the home of the unbridled free-market capitalism, has supercharged the transfer of power from the west to the emerging economies of China, India and Latin America.

Cohen and DeLong argue that we are about to see an end to the cultural *dominance of American fashions and mores – and also a major ideological shift: what they call the collapse of "the neoliberal dream".

The past couple of weeks alone have brought new evidence that a rethink is already under way, even in that crucible of the Washington consensus, the International Monetary Fund. A paper published on 12 February by its chief economist, Olivier Blanchard, and his colleagues acknowledges that policymakers became much too complacent during the "Great Stability" of the early 2000s, attributing years of low inflation and stable growth to their own genius, instead of a lucky conjunction of circumstances.

Blanchard et al then ask whether it wouldn't have been better to allow inflation to rise a bit more, so central bankers would have had a bit more room to manoeuvre when everything went wrong. Perhaps, they muse, an inflation target of 4% might be better than the 2% or so that many central banks aim at.

As Blanchard told the IMF's house magazine: "The crisis has shown that interest rates can actually hit the zero level, and when this happens it is a severe constraint on monetary policy that ties your hands during times of trouble. As a matter of logic, higher average inflation, and thus higher average nominal interest rates before the crisis, would have given more room for monetary policy to be eased during the crisis and would have resulted in less deterioration of fiscal positions."

He called for policymakers to look at other factors such as leverage and asset prices, as well as inflation, and to use a range of other tools, as well as interest rates, to control the economy – limiting loan-to-value ratios when a credit boom is getting out of hand, for example. It wasn't quite as radical as Alan Greenspan's admission after Lehman Brothers collapsed that he had discovered "a flaw" in his free-market philosophy but as Damascene conversions go, the concession that inflation might not be so bad, after all, showed how severely shaken the world's economic policymakers have been by the credit crisis.

For decades, the IMF has promulgated a mix of anti-inflation policies, financial deregulation and free markets that became not just the accepted norm for the rich world but the recipe imposed on scores of developing *countries. With this came the powerful threat, politely known as "conditionality", that if they didn't follow the rules, their financial lifeline – IMF funds – could be cut.

Blanchard's paper is not official *policy, just the IMF chief economist's musings about the lessons of the crisis. But for developing countries that have endured eye-wateringly high interest rates, or pegged their currencies at artificially high levels, in the battle against the great demon of inflation, his words will have seemed like an extraordinary volte-face. Even the "Washington consensus" seems to be losing its grip.

'Socially useless'

Lord Turner, chairman of the Financial Services Authority, tore into another tenet of the "neoliberal dream" in a characteristically thoughtful speech in Mumbai last week. He had already made himself a hate figure in the City by describing as "socially useless" many of the innovations its finest minds have come up with over the past few years. This time, he turned to the international equivalent of the same argument, questioning whether the "financialisation" of the world economy has had the benefits often claimed for it.

Apart from a shrewd analysis of the causes of the crash, and its most recent predecessor, the Asian crisis of the late 1990s, Turner argues powerfully that the exponential expansion of financial activity in the run-up to the crunch had few of the benefits claimed by proponents, in terms of efficiently allocating capital around the world, or transparently revealing the "true" value of underlying assets.

"The case that short-*term capital flow liberalisation is beneficial is based more on ideology and argument by axiom than on any empirical evidence."

In 2006, he points out, the IMF was happily claiming that the now-notorious credit derivatives "enhance the transparency of the market's collective view of credit risks". Unfortunately, that collective view was often utterly wrong. As Turner says, in 2007, on the brink of the crisis, the credit default swap market was "revealing" that the risk of a major bank defaulting had hit its lowest ever level – a message backed up by the banks' share prices (see graph three).

In the event, financial liberalisation led not to safer but riskier markets, a message not lost on countries such as India, where Turner was speaking. The Indians refused to swallow the neo*liberal orthodoxy completely, keeping some control over the growth of credit, for example – a decision that once made Delhi look woefully backward, but has helped India avoid the worst excesses of the financial boom and bust.

After the most catastrophic crash for 80 years led to a shattering world recession, the ideology that transmitted American economic ideas across the globe has been comprehensively trashed, even in its spiritual homes of Washington and London. But the thinking about what will replace it has only just begun. China, India, Brazil and Russia have taken divergent paths to development. Cohen and DeLong *suggest a growing role for governments and regulation; Turner talks about *controls on capital flows, and a transaction tax to throw "sand in the wheels" of the hyperactive financial markets; the IMF muses about new macroeconomic "tools".

But none of that amounts to a fully thought-through alternative, and that will take time. We have no more idea of what the economic orthodoxy of the next half-century will look like than of what will supplant Coke, denim or hamburgers

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