The CEO Poll: EU bailout of Ireland necessary
Canadian execs expect more financial rescues to come but question effectiveness.
Author:
Angelina Chapin
Date: December 9th, 2010
Publication: Canadian Business Online
The recent European Union bailout of out Ireland has sparked a loud
debate over the future of Eurozone economies. In a recent COMPAS Inc.
poll, Canadian execs surveyed said that Europe was right to provide
Ireland with the bailout, giving the action 5.1 on a 7-point scale,
where 7 means strongly agree.
But the executives were divided on whether the bailout would
succeed in stabilizing the EU. On a 100 point probability scale, the
respondents gave the likelihood of Ireland failing to recover within a
year and calling for a second bailout a 53. When asked if Spain will
demand a bailout, the chief executives gave that possibility a 62.
Recently, German chancellor Angela Merkel declared that bondholders
should share a stake in future government budget crises, which would
pressure weak governments into becoming more self-disciplined. Seventy
three percent of execs agreed with that statement. “This kind of
economic pain is going to continue until governments stop spending more
than they’re taking in,” said one CEO. “The problem is that a lot of
voters still don't get that their government can't live beyond its
means forever, so politicians are not able to tackle the real problem of
government spending.”
As for the future of the EU, respondents gave the possibility that
one or more of the weakest Eurozone countries will leave to establish
its own currency a 40 on a 100-point probability scale. The possibility
that Germany will leave the Eurozone, alone or together with some
other strong European countries, scored a 38. “The situation shows the
problems inherent in tying different regions together,” says one CEO.
“The potential benefits are there in good times but the issues arise
when one economy fails.”
EU leaders will debate ways of involving investors in bailouts
To view complete results and additional polls, please click here.
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