Assets and Liabilities in State Budgets
In Order to cope with burdensome Liabilities of States
In order to observe international interest with the issue of "Assets and Liabilities in State Budgets" this is a condensed English version of the issue in the “German Version”
USA is considering productive Assets of States
The ECONOMIST published an extensive essay on the topic in the issue of January 11th 2014
This very policy of the following proposal is now being designed by the EURO-Group of Jean-Claude Junker to cope with the Greek Crisis of burdensome debt by liquidation of State-Assets through a body of trust estate (acc. German Treuhand-Anstalt). Problems in Liquidation of Greek productive State-Assets is no objection in principle.
Loans and Collaterals
EURO-Bonds and further loans to States of EURO-System should be secured by COLLATERALS issued by a TRUSTEESHIP - Body (like German Treuhandanstalt) managing assets deposited as securities.
This policy is matching to manage Greece-Problems but also for other countries of the EUROPEAN UNION like Italy, Portugal and Spain.
The very Problem of a 3-stage Banking-System
After Elections in France and Greece Fiscal-Union again in discussion
The problem of a 3-stage Banking-System ( = EURO-Countries) in comparison to a 2-stage Banking-System in principle. Just to say it simple: If in UK with its two-stage banking-system a City is not in line with policy of MP Cameron, Cameron could send troops. However, when in EURO-States Greece is out of Budget-Control Holland /Merkel could not send troops to discipline Greece.
Proneness to Crisis of the Euro Bank System
The initiative of the President of the ECB (22.
January 2015) to move onwards European economy (unemployment and debt
conditions) gives strong evidence that the Three
Stage Bank System with its many competencies is cumbersome and regarding
released speculations as crisis trouble spot.
The Problem of Managing Assets in Principle
If one considers the actively working total assets of STATE contributing directly to the Gross National Product (= highways, railways, interests in industry, real-estate, business etc) a gap between assets and debt is apparent. Such active property of STATE is regarded as spent expenditure as if never recoverable because of GOVERNMENTAL ACCOUNTING (= fund accounting ). But these assets parts participate in the process of the creation of the Gross National Product. The entrepreneur government counts itself as if poor and complains about its debts, however, the debts are covered by active parts of assets in their property. This gap is the issue.
The usual way to cope with the problem is to sell such active parts of National Assets to cover gap in State Budgets, leaving aside to cover lasting debts of state. Moreover, such government spending is attracting additional expenditures. A way must be found to cover debts from the capital market other then by surrendering important state assets to private entrepreneurs. Since it should be agreed that Government sometimes has a solid interest in ruling certain enterprises this could be managed by selling fond-shares in such assets.
Fiscal accounting is taking every expenditure in principle as never recoverable. But a big part as airports, highways, railways etc. further contribute to the Gross National Product.(see FAZ of the 11.1.2011.)
Nearly all States try to cope with such burdensome heavy debts
States could manage their active assets in a Fond. Fond-Shares are sold in the capital-market and credited to Debt of State.
Provided the fond is organised shrewdly by clear-headed managers and the assets are transparently managed such additional market to co-operate in Public–private partnership (PPP) is a promising new approach.
As a result the interest of future generations is born in mind. Lamentation about neglecting their interest is considered. Have a look to The Case of Germany
A Contribution in