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Eurozone Crisis: Leaders Reach Agreement To Resolve Debt Crisis

Eurozone

First Posted: 27/10/11 08:40 BST Updated: 27/10/11 08:47 BST

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BBC:

European leaders have reached a "three-pronged" agreement which they say is vital to resolving the region's massive debt crisis.

After marathon talks in Brussels, the leaders said private banks holding Greek debt had accepted a loss of 50%.

Read the whole story: BBC

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European leaders have reached a "three-pronged" agreement which they say is vital to resolving the region's massive debt crisis. After marathon talks in Brussels, the leaders said private banks hol...
European leaders have reached a "three-pronged" agreement which they say is vital to resolving the region's massive debt crisis. After marathon talks in Brussels, the leaders said private banks hol...
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fco1922
193 Fans
08:52 AM on 10/27/2011
Excellent news, and much better covered in the international press than here in the UK. Lots of nonsense talk, however, about what the IMF aspect of the deal will "cost" Britain. The facts are as follows:

Despite being a mid-sized economy, the UK is the second most powerful and influential country in the IMF. It has the second largest bloc of votes. Its voting share is far too large, giving the UK arguably undue influence.

The UK coordinates closely with the US, giving it even more (disproportionate) leverage and influence.

Countries only "pay in" a small percentage of the IMF's capital. So the "cost" to the UK is much smaller than implied.

The UK is the only western country ever needing to be "bailed out" by the IMF. We need to remember this. The US and Germany effectively saved the UK economy in the 1970s.

If the UK is unhappy with being part of the IMF, or contributing to its operations, it is free to leave. One US official said the US would be happy to "assist" the UK if it wished to leave the IMF and World Bank. (Recalling that we once needed the IMF, this may be a bit risky).
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Orthrus
72 Fans
10:20 AM on 10/27/2011
Quote: "The UK is the only western country ever needing to be "bailed out" by the IMF. We need to remember this. The US and Germany effectivel­y saved the UK economy in the 1970s."

This is something that all the British anti-EU brigade, who delight in the problems of the Eurozone, should remember.

Any real or perceived weakness in the Sterling area will have the speculators, aided by the totally unaccountable ratings agencies, attacking the Pound and sending the UK's borrowing costs sky high. Then, who will the UK turn to for help?
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