ECB threatens to impose new crisis in the Baltics

The Baltic states risk being sucked into a second debt-fuelled crisis if their governments fail to impose austerity measures that support their euro pegs, the European Central Bank (ECB) said. The Baltics suffered a deeper economic slump than the rest of the EU because tight euro pegs led to asset bubbles, the ECB said in a confidential document obtained by ''Bloomberg News''. “But really, we created the last crisis, and we can do it again if we want,” said an ECB spokesman, Jacques van der Fuffle. He explained “we enforced the Maastricht Criteria on those silly Balts, so they use the Euro as a de facto currency, and their central bankers have to sit and watch, cause we control the money supply, not them!" he said, "and the funny part is that the other EU member states completely ignore the Maastrich Criteria, and we do too!”
“Oh, Jean-Claude is a real practical joker,” said van der Fuffle, referring to the ECB president Jean-Claude Trichet. “He and I were sitting around the bar in Brussels pounding lambics the other day and he says to me ‘Jacques, I’m bored. Whaddya say let’s threaten the Balts with another crisis, unless they close a bunch of their bad old Baltic hospitals, fire teachers, lay off cops, cancel unemployment benefits, and jack up taxes.’ And then I said ‘wait, and stop paying pensioners!’ Boy did he laugh at that.” Asked if fiscal discipline should be a primary goal of any member state, van der Fuffle replied “Hell no! This is the EU you’re talking about. You know the average deficit among the EU member states today is 6.9%, and here we are bellowing at the Balts. And they don’t even get it! Don’t those people read the papers? I love this job. Want a beer?” he asked.

Swedbank: “No Bonus 4 U”

The Scandinavian banking group "Swedbank" decided to pay bonuses for 2009's results only to those bank units that operated profitably, BBN reports. This means that the Baltic subsidiaries will receive nothing. Bo Swenson, Swedbank’s Chief Financial Officer, said “Our Baltic business has not developed exactly according to plan. We’ve lost 55 billion Euros, 85% of our loan portfolio is not performing, and we are the laughing stock of the Baltic banking world. So the board has instituted some radical changes. For example, in Estonia from now on, all managers will wear orange neckties. In Latvia, we have turned over the bank to a guy named Dan, who once read an entire book about finance. He is assisted by an electrician, who can also read. And we've placed the Lithuanian credit committee in detox.” Swenson continued, “We remain committed to our team. We’re proud of them, and of their decision making abilities. This is why all managers are still allowed to select their own ringtones, and the hot lunch choices in our cafeterias remain as challenging as they’ve ever been.”

Meet Mr. Euro

Although the Baltic premiers have agreed a joint action plan for the introduction of the euro, the Baltic countries will be unable to introduce the euro simultaneously. Estonian President Toomas Hendrik Ilves said at a meeting with the Estonian parliament’s Finance Committee last week, that Estonia’s 2010 budget must ensure accession to the euro zone in 2011. According to Janis Blumenthals, analyst with SEB Enskilda, Latvia “has a little work yet to do,” and could introduce the euro in 2041 at the earliest. Lithuania on the other hand, has abandoned plans to introduce the Euro. Vindaugas Symkus, spokesman for Lithuanian Central Bank, said “Introduce the Euro? To whom? If the Euro hasn’t already been properly introduced to all Lithuanians, why should it be our job to do it? It’s just silly. We’re the central bank, not a bunch of party organizers for crissakes.”