Main focus of Monday, August 8, 2011

Fears of a new financial crash

The rating agency Standard & Poor's on Friday downgraded the US's credit rating, sparking global fears of a further stock market crash. The press blames the ultra-conservative Tea Party for the loss of the AAA rating and doubts politicians deal effectively with the crisis.

Tiroler Tageszeitung - Austria

The ultra-conservative Tea Party's attitude to the US debt crisis has led to the wrong decisions being taken and provoked the downgrading of the country's credit rating, writes the liberal-conservative daily Tiroler Tageszeitung: "The loss of the top credit rating must be a wake-up call for the moderate majority. It's high time that Obama and the Democrats took over setting the agenda from the Tea Party. The US budget can only be sustainably balanced when the wealthiest ten percent of the population and companies raking in billions in profits start pulling their weight. According to opinion polls that's also how the Americans see things. And it's time the moderate conservatives showed courage and vision and voted against the Tea Party. As long as they allow the radical minority to hold America hostage, the biggest economy in the world will be threatened with a new recession." (08/08/2011)

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More from the press review on the subject » Fiscal Policy, » Economic Policy, » Financial Markets, » U.S.
All available articles from » Floo Weißmann

Les Echos - France

By downgrading the US credit rating the rating agency Standard & Poor's has made it clear that politicians have failed to fulfil their controlling function, the liberal business paper Les Echos writes: "The representative democracy we live in emerged three centuries ago from a simple idea: to avoid a debt spiral and bankruptcy, public finances must be controlled by public representatives and not left to the discretion of the king. Today this fundamental mission is no longer being accomplished in the US, which was long considered the model of such representative democracy. And in our old Europe doubt is also growing over the states' ability to honour their financial engagements, as we saw last week on the markets. The politicians multiply their reassurances, but they are losing their credibility as the debt grows. To bolster confidence, deeds are needed rather than words. Not just the health of the financial markets is at stake, but also the future of democracy." (08/08/2011)

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More from the press review on the subject » Domestic Policy, » Financial Markets, » Economy, » Europe, » U.S., » Global
All available articles from » Jean-Marc Vittori

Trud - Bulgaria

The reports of a global crash on stock markets that had the whole world holding its breath last weekend are nothing but a big scam, according to the daily newspaper Trud: "The world woke up to a big lie on Friday and Saturday. Share prices may be going down on the international stock markets, but it's no major drama. What's all this talk of a record low? The key stock markets haven't even reached their lowest point for this year and are far above 2009 levels. We're dealing with panic mongers here. They are making people panic so they can buy shares at low prices and then sell them at high ones. How else are we to understand the pessimistic conclusions that our [Bulgarian] economy is shrinking? After all, there is no direct threat to us because the Bulgarian banks and pension funds don't own any US bonds. ... So what are we afraid of?" (07/08/2011)

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More from the press review on the subject » Financial Markets, » Economy, » Global, » Bulgaria
All available articles from » Emil Harsev

taz - Germany

Standard & Poor's downgrade of the United States creditworthiness comes hardly as a surprise for the investors, writes the left-leaning daily die tageszeitung: "Investors don't depend on the rating agency to assess the debt crisis in the US - and have long since made their own analyses. ... They are staying remarkably cool, as indicated by the extremely low interest rates the US is paying for its loans: 2.5 percent with a ten-year repayment period. Because inflation is at 3.6 percent investors are even willing to put up with losses as long as they can park their money in the US. This is not what distrust looks like. ... The investors are not wrong when they say the US is a safe haven. The threat of bankruptcy has political, not economic reasons. Tax hikes for the wealthy would be enough to considerably reduce the deficit in the US budget." (08/08/2011)

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More from the press review on the subject » Fiscal Policy, » Economic Policy, » U.S., » Global
All available articles from » Ulrike Hermann

Il Sole 24 Ore - Italy

The Asian stock markets registered further losses today in reaction to the downgrading of the US's creditworthiness. The downward slide can only be stopped if the US accepts China's help, writes the liberal business daily Il Sole 24 Ore: "We are witnessing the chaotic decline of hundreds of years of Western dominance. Strangely, China is missing from all the proposals for preventing collapse. Beijing quite rightly insists on the importance of its role and is using the doubts about US creditworthiness to question the US dollar as the global reserve currency. As a result of the already existing and threatening state bankruptcies the EU is now paying for its mistake of not having consolidated its debt in time. European bonds would be far more secure than the bonds of individual states. Because Europe is the biggest market worldwide such securities would be a worthwhile investment for China." (07/08/2011)

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More from the press review on the subject » International Relations, » Fiscal Policy, » Financial Markets, » Europe, » U.S., » China
All available articles from » Guido Rossi

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