The European Central Bank Essay Example | Topics and Well Written Essays - 1250 words

The European Central Bank - Essay Example (ECB, n.d.) From the moment of its inception, the European Central Bank has been a favorite target of criticisms from economists and political leaders alike. Surprisingly, among its staunch critics are European countries themselves which suffer economically because of the oftentimes rigid and unreasonable policies ECB follows. This paper will thus examine how the political and economic world perceives the performance of the central bank in this regard. Commentaries from analysts, studies done by independent economic research bodies, and the media will be the three main sources for this research. "The list of challenges is long and a lot of work lies in front of us." This was the concluding statement of Gertrude Tumpel-Gugerell, member of the ECB Executive Board during a speech on a conference in Vienna, Austria in 2004. However, she was optimistic that the system would be able to handle challenges that would be present along the way. (ECB, 2004) Among the many challenges present is how to balance decision-making with regards to rate increase to benefit all the economies of the EU member states. Because the ECB does not only cater to a single economy, it has this inherent challenge. An increase in rate would mean a negative effect on a country with a growing economy while it is a positive move for a country with a high inflation rate. The GoCurrency website cited that "several larger economies in the euro area (Germany, for example) that were recently coming out of an economic slump were unhappy as the higher rates would stunt their growth."(GoCurrency, 2006) One classic example often mentioned by analysts is the effect of low interest rates in countries with property bubbles such as Ireland. Because "the ECB was keeping rates low to help the stodgy economies of France and Germany, where growth was weak and needed nurturing, the need of the Irish to raise rates to help their already ailing economy is not addressed". (Louth, 2007) With the recent slump in mortgages in the American market, ECB is once more in the dilemma of raising rates in September or not. It should be noted that this is the first time since September 2001 that there is a proposed increase in rates. (MECB Update, 2002, p 3) Jean-Claude Trichet, President of ECB, indicated in August that the ECB "will raise its key refinancing rate to 4.25 from 4.0." (TodayOnline, 2007) However, there has been pressure from the world community to halt this intended rate increase. The article that appeared on the Business World website entitled "NCB: Another ECB hike could be risky", quoted NCB analyst Dermot O'Brien as saying that the credibility of the ECB may be in question if it does not proceed with the intended rise in rates and sticking to its original plan would be seen as immature stubbornness. This is the current dilemma. (Business World, 2007) With the "surprisingly weak growth figures for the

Gulf country orientation of Renewable energy Research Paper

Gulf country orientation of Renewable energy - Research Paper Example Given the potential for renewable energy in the GCC and the need for renewable energy due to large scale infrastructure development and reliance on energy, a number of renewable energy projects have been undertaken in the GCC states (Alnaser and Alnaser, 2011). This paper presents an overview of the renewable energy orientation in the Gulf countries. Saudi Arabia, Kuwait, Oman, Qatar, Bahrain and the United Arab Emirates (UAE) make up the six states in the GCC and are regarded as among the world’s ‘major oil and natural gas producing countries’ (Reiche, 2010: 2395). The GCC states are ranked among the world’s top 25 carbon dioxide emitters ‘per capita’ (Reiche, 2010: 2395). Due to infrastructure and economic development in the GCC, the demand for electricity has increased exponentially and the GCC states have been forced to consider renewable energy sources. With an abundant source of solar and wind energy, it is hardly surprising that the GCC countries have taken the initiative to plan for the implementation of renewable energy as a solution to the pending energy crisis brought on by high demands for electricity (Hertog and Luciani, 2009). There are three main advantages to GCC states in implementing renewable energy sources. The first advantage is a reduction in the cost of power plants together with reduced costs in the transmitting and distributing operations. Secondly, with reliance on renewable energy sources at home, the GCC states can increase their oil and natural gas exports which would normally be put to use locally and finally, GCC states would benefit from a reduction in carbon monoxide emissions from conventional power plants (Sharples and Radhi, 2013). The European Union (EU), as a driver of renewable energy elsewhere signed the EU-GCC Clean Energy Network agreement with the GCC in 2010. In signing the EU-GCC Lean Energy Network, the EU has undertaken to and taken action for the promotion and ‘transfer of expertise and