Update:
If Greece decides to drop the Euro, they have a stark choice. Do the countries funding their debt to the level of twice the annual GDP of the country decide that there will be debt repayment. If the Greek GDP is US $301 billion, or 236.4 billion euros, this means finding up to (give or take) 500 billion euros, for the Bank of England to lend to Greece. This means 25 billion euros a year in interest payments, and that meens finding 25 to 500 billion in assets which Greece has, which it is prepared to hand over if it defaults. If they adopted their own currency, (Drachma) the lending bank would have to either consider lending to them in that currency, and accepting repayments in that currency, and probable losses as it fell, or just reinvesting that money in Greece, or the Greek economy (Finance Minister who has my personal guarantee of an annual salary of $250,000 as part of the $1 million deal to Education, Health Housing and Finance mmMinisters of every country), would still have to pay interest in euros, either to France and Germany at 4% interest, the same as the Bank of England, or a higher rate. In additionthe Bank of England would lend "unlimited" funds to government guaranteed Greek banks at 8% to fund mortguage lending on first mortguages up to 50% of equity.
The formula is the same for all countries in Europe. 23% flat rate of tax (up to 30,000 euros pa, 10% GST, full welfare up to about 1,000 euros per month per person (flexible), free hospitals, schools, a police force and defense limited to 3% of GDP.
It shows that there is no uniform rate of tax in Europe, despite the fact that everybody shares a common currency. The problem could be as simple the fact that some people are working towards one world government, with one world currency, the US dollar, and they want a completely cashless society. I'm opposed to this because the world is a much more interesting place with more diversity and regional character. It is possible to have a uniform taxation system without a common currency, but let us assume that there will be a euro in Europe, at least for the forseeable future, and a US dollar in the United States, which is worth approximately 80% of the Euro.
Greece, as at 23rd February 2012, is undergoing a financial crisis. With a debt, allegedly 120% of GDP it has problems raising finance to repay debt.
My solution, surprisingly, is a simple one, and it is a three year program, in the first stage.
Taxation statistics taken from this page:
The wages in countries like Serbia, are too low to create ecomomic growth. with a salary of only 400 euros per month, 4,800 per year, how does one expect to raise a family, pay rent, and save for the future?
Tax scale for 2010:
Income bracket Tax rate Tax per bracket Aggregate Tax
First 10,500 Exempt 0 0
Next 1,500 15% 225 225
Next 18,000 27% 4,860 5,085
Next 45,000 37% 16,650 21,735
Exceeding 75,000 40%
Internet Provider
The price (my partner's share) of an internet connection rises to 5 euros per month on 1st June 2012, and to $5 per month in New Zealand.
The first thing I would do is reduce the tax rate on the 12,000 euros to 30,000 bracket to 22% to create some relief and stimulus to the economy.
The aim at the end of three years would be to have a flat rate throughout europe, as close to 20% as possible, with a gstrate of 10% in all countries in Europe.
The bottom line is the funding of the deficit, which if it is 120 billion, requires 6 billion euros or 5% to be paid to France, England and Italy through a European National bank owned by the Bank of England.
In other words, the ten European members of the group will be encouraged to deposit as much of the 120 billion euros as they can afford, and receive in return 5% interest year by year. The Bank of England, which owns the bank would be responsible for finding any shortfall, and using pounds to buy euros to deposit in the bank. That way the debt will be repayable, (in 20 years or whenever) in euros.
France Italy and England are the three key nations because the churches will be depositing in that bank, receiving possibly 2% or 3%, and they all have alternative keyboard and language code pages for the internet. The (National) bank of Europe, as it will be called, will also operate as a retail bank, the same as the currently ANZ owned National Bank of New Zealand.
It is interesting that the BNZ in New Zealand is now offering to consolidate (take over) credit card debt from other banks at a fixed rate of 4.95%, because the reserve bank is offering money to that banks at (OCR) 2.5%. This will have to rise to 8% to offset the inflationary effects of an increase in wages which is long overdue. The minimum wage should be for school leavers with few or no skills, not for 100% of the work force in some industries, like the seasonal kiwifruit industry.
The idea that controlling inflation by keeping interest rates and wages low is going to benefit th economy in the medium or long term is clearly wrong, as I shall argue in more detail later on.
Bank of New Zealand (BNZ)
4.95% p.a. interest on the balance transferred – until it's paid off
You'll continue to enjoy this rate until the balance is paid off, as long as your BNZ card remains active. You can do this simply by using your card to make a purchase and/or cash advance at least once every 12 months.
How to apply
It costs nothing to transfer your balance, and only takes a few minutes to apply. If you don't have a BNZ credit card, first you'll need to apply for a card. We'll include a balance transfer form when we send your new card. If you already have a BNZ credit card, you can transfer balances from non-BNZ New Zealand issued credit cards* by applying for a balance transfer online now.
Date 26 January 2012
The Reserve Bank today left the Official Cash Rate (OCR) unchanged at 2.5 percent.
Reserve Bank Governor Alan Bollard said: “Since the time of the December Statement, financial market sentiment has improved slightly, with increased liquidity in European financial markets. However, the global economy remains fragile and risks to the outlook remain.
“World prices for New Zealand’s export commodities have remained elevated but the recent appreciation of the New Zealand dollar is reducing exporters’ returns. The European debt crisis has also increased the cost of international funding, which will likely pressure funding costs for New Zealand banks over the coming year.
“In the domestic economy we continue to see modest growth. Over recent months there have been signs of a limited recovery in household spending and the housing market. Further ahead, repairs and reconstruction in Canterbury will also provide a significant boost for an extended period, though there may be further delays resulting from the aftershocks.
“Reassuringly, inflation pressures have remained well contained. Inflation has declined and now sits below 2 percent.
“Given ongoing uncertainty around global conditions and the moderate pace of domestic demand, it remains prudent to keep the OCR on hold at 2.5 percent.”
Media contact:
Mike Hannah
Head of Communications
Ph 04 4713671, 021
497418, mike.hannah@rbnz.govt.nz