PM Key thinks Europe will "muddle-through" crisis; "Utterly convinced" about Merkel's resolve; Feeling better about NZ's position

PM Key thinks Europe will "muddle-through" crisis; "Utterly convinced" about Merkel's resolve; Feeling better about NZ's position

By Alex Tarrant

Prime Minister John Key thinks Europe will messily muddle through its sovereign debt crisis after being "utterly convinced" German Chancellor Angela Merkel has the resolve to keep the Euro-zone together.

Key said his trip to Europe last week, which included meetings with Merkel, British Prime Minister David Cameron and Bank of England Governor Mervyn King, also left him feeling more upbeat about New Zealand's relative position in the global economy.

While he was slightly more confident than before that the Euro area would hold together, Key told media at his post-Cabinet press conference on Monday that the meetings also made him more aware of how big the challenge was facing Euro policy-makers.

Key's meeting with Merkel included a wide-ranging discussion about the problems faced.

“I came away from that meeting utterly convinced she is totally committed to the future of Europe,” he said.

“I think they’ll muddle through, yeah. It might be a messy muddle, but they’re going to do it.”

That was indicated by the fact the Spanish banking crisis last weekend had been met with a €100 billion package. Meanwhile, if Greek voters voted in a pro-austerity government this weekend, Key said he would be amazed if it didn’t continue to get support. Likewise in Portugal, which is also undertaking economic reforms in return for a bailout package.

“There is a huge amount invested in the success of Europe. It doesn’t mean it can’t fail, but if it does fail, it won’t be without the best of intentions and a massive amount of support," Key said.

People generally were worried about the crisis spreading to other countries like Italy, “but maybe that answers the question of why a bailout package for Spain was provided before the [Greek] elections on June 17."

Key’s view of the track New Zealand needed to take to deal with the implications of the Eurozone crisis had not changed.

“What I would say is, possibly I’ve got slightly more confidence that the Euro area will hold together, but I’m more cognisant of how big the challenges are," Key said.

NZ in good shape, relatively

Looking through the basic economic ingredients New Zealand had, relatively speaking, they were pretty good, Key said.

“Our tax system is broad-base, low rate, with high degrees of integrity – most people pay their taxes; Our employment markets are flexible - more flexible even than Australia’s; Our level of government – got a unicameral system, relatively low levels of massive bureaucracy in our state government; Our education system, for all of the challenges that we have, still ranks with the best in the world; We’re building infrastructure - rolling out ultra-fast broadband.

“We’ve got a lot of great things going for us. We also happen to have very creative people and a product that the world wants to buy,” he said.

Organisations like the IMF and OECD had supported the National government's track to surplus. And, despite rising debt levels, the government had been in a position where it had been able to use its balance sheet to help New Zealanders through the recession by maintaining entitlements.

The economy had also turned and was improving.

“Our unemployment numbers are, relatively speaking, ... pretty good. Growth overall looks pretty good over the next three years. I think New Zealand’s in great shape," Key said.

“But it’s a very uncertain world.”

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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“But it’s a very uncertain world.”
 
True, but I am not sure JK understands it very well. Certainly, his views are not shared by all:
 
http://hat4uk.wordpress.com/2012/06/09/euroblown-merkel-the-merciful-off...
 

Have a think about the following statement....
.“I came away from that meeting utterly convinced she is totally committed to the future of Europe,” he said.
“I think they’ll muddle through, yeah. It might be a messy muddle, but they’re going to do it.
Now try to reconcile the two sentences as compatible....(A) clearly hinges on Merkels survival.
(B) what the hell kind of reassurance is that ...?  muddle..messy muddle.....is that what it was in the dealers room ...?....I suspect not , and therefore a  naive statement.
100billion says ,your not there to muddle..not there to be  messy...that you have used portion of that 100 bill buying the right people..ensuring the Spanish internal defence services are well provide for....etc.
On to this....“There is a huge amount invested in the success of Europe. It doesn’t mean it can’t fail, but if it does fail, it won’t be without the best of intentions and a massive amount of support," Key said.
What a freakin rube...... best of intentions.? WTF.....best of intentions......oh he came away upbeat alright...!  but thats because in political terms he's about 12 and the the Big M just told him she's a committted player...and she'll sort it....but if it does go tits up...it wont be because she didn't think it was a good idea...
This is your Prime Minister.....by modern N.Z. standards enjoying  Presidential style voter adulation while his party loses ground.......?
This man is not qualified to occupy the position the public entrusted him to do.....
 

Sorry Christov - he is perfect person for the job and we (most) voted for him. We deserve it.

 
"The poorest man may in his cottage bid defiance to all the force of the crown. It may be frail; its roof may shake; the wind may blow through it; the storms may enter; the rain may enter--but the King of England cannot enter; all his forces dare not cross the threshold of the ruined tenement." -- William Pitt, Earl of Chatham
 “The wind and rain may enter the cottage of the most humble Englishman,” the proverb went, “but the King with all his might and majesty may not.”
The final frontier for the onslaught of big-banker stealing was the threshold of America’s and Europe’s homes. The savings and product of Americans' and Europeans’ livelihoods, which is held in their very homes, was just too tempting for these bankers to resist and they moved in to take it.
Therefore, let those who made the profits from the real estate bubbles that destroyed people’s home equity and savings, those who are now stealing depositors’ savings to re-inflate their quadrillion dollar derivatives bubble, i.e., the bankers who created this crisis, pay the losses.
The bankers who operate this worldwide financial system went gone too far when they have put into their pockets the very proceeds of a man’s home equity, life savings, and future…just to satisfy their greed. And, in the current chaos they created, are acting as crazed animals.
We need, finally, to put the levers that control the financial system into the hands of the people and to slap the hands that are in the till and fit them with handcuffs,
They are not bankers; they are robbers.

Robbers, yes....however they have little really to lose.....sadly indeed we dont see them going to jail.....they should be IMHO. Might yet happen (I live in hope) when Pollies feel the finger on the collar from the electorate.
regards