EUROPE’S FINANCIAL TROUBLE

The global financial crisis, which had been stirring for a while, really started to show its effects in the middle of 2007 and into 2008. Around the world stock markets had fallen, large financial institutions had collapsed or been bought out, and governments in even the wealthiest nations had to come up with rescue packages to bail out their financial systems. Now comes recovery, a time where the economy is supposed to rebound…but is it rebounding? Look at where Europe is at currently. January 1^st, 1999 the Euro made its debut, and now just over 10 years later the continent is in its own major financial crisis while the world is supposed to be rebounding from the global financial crisis. Europe has many countries, each with distinct financial and cultural histories, that have made this transition and are caught up together in this European Financial Crisis. Maybe if each country didn’t abolish their own currency to turn to the Euro each country could have stood stronger to help the ones that were failing, however they are now all in the same pot and it is taking other continents and countries around the world to look at bailing them out. The issue in Europe is already affecting the world wide economy and the rebound tougher for many countries especially the U.S. Recently the European Union has been working on limiting Europeans from investing in world markets to keep most European investing to Europe only. The issue has also caused the E.U. and G20 to look at developing another world wide tax, and other measures that would hinder the progress of recovering economies. Many are accrediting this financial crisis to Portugal, Italy and Greece not collecting their taxes. Why is it that taxing seems to be the solution. If taxation is increased more than it has already over the last 50 years most people will not be able to adequately manage a household budget without continuously going into further debt. Where will the taxing stop? There are two ways to increase cash flow, increase incoming and decrease outgoing. It seems like governments always to look at more coming in as more important than cutting back on what is going out!

You can't tax an economy to prosperity

“You can't tax an economy into prosperity; likewise you can't tax a financial sector into stability.” These are words by Stephen Harper in addressing the new international bank tax proposal. This proposed global bank tax would enforce banks in many countries of the world to pay a tax that is to help with the Bailouts that are happening around the world in this economic downturn. Many countries who have been beneficiary to the bailouts or think they may need bailouts in the future are for this plan, while Canada is not. Obama has also been backing this as he has been pushing towards the one world governing platform. The Prime Minister, Finance Minister and others from the Canadian Political arms are stepping up to try and stop this from happening. Canada will host extraordinary back-to-back meetings of the G8 and G20 next month in Huntsville, Ont., and Toronto. Harper said he will use his position as host to push the G20 to adopt a more sustainable system of financial regulation as a corrective to the economic meltdown. Canada has so far avoided the bailouts’ toxic assets and are continuing to put measures in place to strengthen Canada’s financial system, so why put more burden on a recovering financial system. We cannot continue to add taxes every time the economy is in trouble. Taxes are already a big cause of the downfall of many societies, on this Fiat system they are built on! Canada is standing up against this possible world tax and at the same time proposing a different solution: Rather than a more formal tax on bank earnings, Canada has championed a plan it calls "embedded contingent capital" as a way of strengthening the financial system and mitigating the need for bank bailouts. Essentially, the system would allow banks to sell bonds to pad their reserves, but the bonds would automatically be converted to equity during bad times, thus avoiding the need for a taxpayer bailout. The system theoretically would encourage bondholders to keep a closer eye on management because they would be unwillingly converted into shareholders if anything goes wrong. Will the Global Tax go through, will Canada’s proposal emerge on world platforms as a serious alternative, or will others come forward with other plans? …Only time will tell!