What are we afraid of if we do not provide a loan of 90 billion to the International Monetary Fund to help the eurozone? Fear of the eurozone and the IMF is unfounded.
Our government is currently discussing a possible loan to the International Monetary Fund to help indebted eurozone countries. This is about 90 billion crowns, which we would send from the CNB's foreign exchange reserves.
If we do not provide this money - say the proponents of the loan - then we isolate ourselves from the world, the IMF or the EU (Germany and France) will take revenge on us and when we need help ourselves, everyone will cough on us.
The EU cannot do anything to us
To say that the EU or eurozone countries will take revenge on us is a statement made without knowledge of basic economic laws.
For example, in Slovakia, Chancellor Merkel was a popular scarecrow "Would call" German investors and agreed "By" with them their departure from the land. This idea is of course absurd.
As a result, it is not states that trade, but private individuals and companies. It does not trade Germany with the Czech Republic, but Volkswagen with the Škoda, certain people with certain people. They have their own interests and it is not their task to follow the "interests of the state". It's about their own money and business.
Customs will not hurt us
Even if there were a rather extreme situation today - a kind of period of trade war, when the eurozone countries would introduce retaliatory duties or import quotas on imports from the Czech Republic for our negative attitude - we have nothing to worry about.
Of course, many exporters might lose their current markets. The situation would change, but it would be enough to reorient to other markets.
And honestly, there are already much more lucrative markets in the world todaythan euro area markets. Reorienting to Asia, the USA or Russia could bring us much more benefits and security in the future than the association of mutually borrowing chronic debtors, in which a group of countries paying euro.
On the other hand, for companies in Germany or France, customs duties on Czech imports mean a necessity buy real more expensive productsthan what they could take so far. As a result, he will feel it, of course consumer, which can be the German, French or Spanish. Surely we all agree that artificially increase costs in uncertain times of crisis not exactly far-sighted.
For us, a possible duty only means pressure to reorient our exporters, which is only relatively short-term problem. For the euro area, however, this means insuring another economic downturn accompanied by classic clichés of protectionism, namely in the long run.
We will lose subsidies!
… I would just add: thank God!
Of course, subsidies from Eurofunds are not free. Everything that is subsidized by the EU the Czech Republic must co-finance with its own money. Given how important and useful projects the EU finances, we often find our own resources drowning in black holes for money.
However, the initial funding itself does not end there. Every project has its own other operating costs to be paid.
Finally, subsidies distort the market and have the potential for corruption.
Is it worth it to us?
When we need to, they won't help us!
Here you just need to answer two questions: would their help be beneficial and would those institutions benefit from anything?
As he says, for example Markéta Šichtařová: that IMF Decades of bankruptcy do not mean that this cannot happen now. The IMF is not a central bank, money does not print. When debtors have nothing to repay him, he has nothing to repay the money from.
However, this does not change the fact that similar "assistance" in the form of debt transfer from one institution to another only creates moral hazard environment. After all, bankruptcy with a debt in the order of trillions of crowns is much more "pleasant" than bankruptcy with a debt in the order of tens or hundreds of trillion crowns.
The effect of "help" is nothing but allowing much more debt and once so bankrupt with a lot worse looking account. The result will only be cuts and changes that will be much worse for each of us than if we did not artificially prolong the agony of debt.
We have nothing to fear
Fear of the eurozone and the IMF is unfounded. We need to realize that indebted countries now need us much more than we do. They have nothing to threaten us at a time when they are running out of money, even for their own normal operation. It's like being afraid of being slapped by a paralyzed person.
PS: The IMF should contribute EUR 200 billion to eurozone countries. However, in the first months of next year alone, bonds of euro area countries maturing in the amount of € 1,1 trillion (over 25 trillion crowns), half of which are bonds of Italy, Spain and France. Does anyone really believe that IMF action would help?