Suchergebnisse

At present the ECB is striving, through its so-called zero interest rate policy, to avoid deflationary developments because, as past experience shows, a further price decay would be expected to lead to bankruptcies and be a strain on the real economy. Complementary quantitative easing (QE) and the resulting drop in returns on bought up securities will hopefully lead to the commercial banks giving more credits to small and medium-sized enterprises which are unable to, or have difficulty in financing themselves through bonds. Reducing the margin between interest income and refinancing costs to the lowest level possible has caused serious problems for credit institutions. The same applies, due to the reduced interest rates on loans, to the insurance companies and pension funds, which tend to invest conservatively. — Zero interest rate policy, which in itself is a contradiction of the principles of a market economy, should be relinquished as soon as possible. A return to a monetary policy which does not lead to misallocation and structural distortions is urgently necessary.

High public debt is causing serious difficulties, primarily in southern countries of the European Union that suffered the most during the business-crisis. State economists have different strategies for solving these problems, depending on their politico-economical orientation. In the neo-classical sense supply-side-policy orientated economists believe that deficit countries should first of all reduce their debts by starting an economical budget management. Demand-side-policy orientated economists, on the other hand, traditionally believe the exact opposite. Attempts should not be made to solve deficit problems through savings in budget management, although this may, at first, seem to make sense. Essentially it is vital, in this situation, to start extensive development programs to solve the structural problems and to increase the economical productivity and international competition of these countries. Both perspectives are too narrow minded as they are one-sided. They widely neglect the interdependencies of real production and monetary demand, resulting from the economic-circulatory-policy coherences. The pragmatic solution for the deficit crisis would be a combination of both approaches in the sense of: One should do one thing without neglecting the other.

Since state institutions began using account screening, in the bank sector, not only in cases of suspicion, but as a standard procedure for monitoring account and invest-ment data, much of the illegal transfer of funds has shifted towards cash payments. In order to hinder, or even do away with such illegal monetary transactions, the EU is considering two possible courses of action; one moderate and one more radical. The moderate solution would see the introduction of legislation restricting the amount of cash used in payments. Several countries already have such legislation. It is possible that this limit could be adjusted by governments ad hoc, and could even be set at zero. This would be the radical course of action; doing away completely with cash payments. The consequence would be that the transfer of money would only be possible by bank transfer from account to account. Representatives of the banking sector are in favour of the campaign to eliminate the use of cash transactions, as this would lead to advantages within the banking indus-try. However, there would be many disadvantages for the general public. In the world of commerce, contractual liberty is a fundamental principle. All contracting parties have the right, within the law, to negotiate the terms of a contract to be signed, laying down goods or payment (cash included) to be made, as a part of the contract. Thus, legislation restricting the use of cash would be a breach of the free-dom of rights as laid down in the constitution of any EU country. The question as to whether or not to do away with the use of 500, - Euro bank notes is of little interest to legal and private monetary transactions, as these are seldom used in such cases. Since these notes are a simple way of transporting large sums of money unnoticed, their use is mainly limited to the world of illegal transactions where large sums of money need to be moved, as in the case of money laundering