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Moody's doesn't believe in the European plan

· Reserve also from the IMF ·

The enthusiasm for the December 9th European agreement is over. At mid-morning, Milan lost 2.37%, Paris, 1.84%, Frankfurt 2.15% and London .88%. Moody’s rating agency criticized the agreement and announced that it would review European countries ratings. The International Monetary Fund (IMF) made it known that the agreement reached at the recent Brussels summit may not be enough.

“The absence of measures to stabilize markets in the short-term means that the eurozone and the European Union in general remain subject to new shocks and the cohesion of the eurozone remains under constant threat,” said Moody’s in a note. The agency therefore rejected the conclusions of the last week’s European summit and announced a ratings review of European countries in the first trimester of next year. The Brussels summit, according to Moody’s, was incapable of making, “politically decisive decisions,” to recover from the crisis.

A partial rejection also of the agreement reached in Brussels for a new fiscal union and European budgets, which some say does not provide a comprehensive solution to the crisis of European debt. The head economist of the IMF, Olivier Blanchard said, “At the moment, I am more optimistic that one month ago; there has been progress.” What happened last week, he added, “is important; it is part of the solution, but it does not represent the solution.”

According to Jurgen Stark, member of the Governing Council of the European Central Bank, excessive involvement of the IMF in Europe would be a mistake because it would be interpreted as a “gesture of desperation.” For Stark, it would be advisable to appoint an informal commission of experts to examine the budgets of EU member states.

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