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Euro News

Wednesday, 6th April, 2011 10:06am

International press heeds Harkin's warning of imploding Europe

WARNINGS by Northwest MEP Marian Harkin that the unsustainable debt borne by Ireland and Greece could lead to a fatal weakening of the euro have drawn the attention of global media this month.

Two letters by the Independent MEP made the Opinion Pages of The New York Times and The Financial Timesduring the last month. In the most recent letter published in The Financial Times on  March 28, Ms Harkin accuses the European Parliament of "ducking the hard question" in its recent vote to create the permanent stability fund, a debt-crisis mechanism for eurozone countries, in 2013. "The withdrawal of the amendment, which could have given the fund the ability to purchase bonds of a member state on secondary markets, sends a clear message," she writes, adding that the current solutions to the banking crisis being put forward by the EU institutions amount to "little more than sticking plasters on a deep wound."

The Northwest MEP says the bailouts for countries like Ireland and Greece represent a dangerous procrastination. "A two-speed euro, with core countries converging, while their debt-ridden neighbours are in danger of collapse, is the spectre that stalks the eurozone," she cautions.

It's interesting to note that Ms Harkin's letter is published alongside a similar warning sent by Charles K Seavey, who is a former employee of US investment advisers, Morgan Fuller Capital Management. Mr Seavey expresses amazement that the Irish bailout included "no haircuts for banks and bondholders." He urges EU decision-makers not to follow the disastrous mistake made by  US leaders during the American banking crisis, namely: "their failure to impose any haircuts on major banks during the bail-out, as well as their failure to impose any consequences or accountability on Wall Street in the aftermath of the bail-out." History repeats itself.

EU moves to protect future mortgage holders

TO MANY Irish homeowners struggling to meet repayments on inflated mortgages they should never have acquired in the first place, the EU's latest proposals for protecting borrowers may seem too late. However, the latest draft legislation put forward by the European Commission is an important first step towards ensuring that the type of irresponsible lending and borrowing that has landed this country in so much trouble cannot be repeated in the future.

The new rules, which have yet to be approved by MEPs and member states before they can take effect, would set strict criteria governing advertising, pre-contractual information, advice, creditworthiness assessment and early repayment. The directive would also require lenders to make general information available through a European Standardised Information Sheet, which would allow consumers, at a glance, to compare mortgage conditions from different providers.

Irish MEP Gay Mitchell, a member of the European Parliament's Economic and Monetary Affairs Committee, said the legislation could play a vital role in restoring confidence in the banking sector across Europe.

"Ireland's economy suffered greatly due to the reckless financial behaviour of a minority. This legislation represents the important first step towards preventing a reoccurrence of such bad practices," said the Fine Gael MEP.

Genetically-modified feed could solve pig crisis

A CONTROVERSIAL plan to introduce genetically-modified animal feed to help Irish pig producers in the Northwest afford soaring feed prices was put forward this week by Northwest MEP Jim Higgins.

Mr Higgins said GM crops grown solely for animal feed could be part of the solution for Irish producers in Donegal, Cavan, Monaghan and Longford, who, he said, are struggling to cope with unsustainably high feed prices caused by a worldwide reduction in cereal output.

Speaking in Brussels, Mr Higgins explained that the monthly feed bill for the 150,000-strong Irish sow herd has risen from €19 million in January 2010 to almost €25 million by January of this year.

"One local producer has suffered a  €50,000 rise to the monthly feed bill over the last six months, while pig return prices remain unchanged. We need to explore other options before one of our most profitable agri-industries becomes extinct," he warned.

The EU is currently revisiting the debate on GM foodstuffs, and the Fine Gael MEP claimed that legislative reform was needed to allow the use of GM crops to ensure increased competition and fair prices.

"It's important to note that GM regulations in the EU are said to be the strictest in the world, and that no evidence of adverse health effects have been discovered in the US, Canada or in Latin America, where the consumer market to GM food has been opened," said Mr Higgins

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