The 27-country EU took some action today to avoid a run on the banks in its member states. The minimum deposit insurance guarantee in the trade area was raised to €50,000 or about USD 68,000. Some countries wanted the minimum set even higher, at €100,000. That's still way less than the $250,000 amount in the US, but it should offer a measure of confidence to an increasingly jittery public in Europe. Nevertheless, at least two countries, Ireland and Greece, have offered a blanket guarantee.
Meanwhile, this morning Stéphane Dion suggested that our limit of $100k should be raised to $250k to match the US amount, among other measures. That's well and good, and it's something that I think will have to happen to avoid a flight of capital, no matter who wins a week today. But deposit insurance is just one piece of the puzzle.
What we need are leaders who are not afraid to take tough action if need be, to offer the right mix of restraint and spending to calm the markets and get people spending money again -- responsibly of course -- to make sure that we get out of recession as quickly as possible.
Someone who created a situation where we're barely scraping by federally, rather than have a cushion of tens of billions to help ride out the storm -- well, one really has to question what kind of leadership that is. Maybe it's me, but I'd rather have $15 or $20 billion to play with to inject into infrastructure and income tax cuts instead of starting with a base of zero -- which is what we would have had if the GST was still at 7% and the income tax cut by two percentage points instead.
I think you know who I'm referring to.
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