France and Germany Discuss Euro Reform [The Economist]


Translated from The Economist

European Commission President Jean-Claude Juncker likes to compare the area and the euro’s reform to a house that needs repair. ” Fix the roof,” he advises, ” while the economic climate is favorable . “

In preparation, Emmanuel Macron, President of France, and Angela Merkel, Chancellor of Germany, put forward joint proposals for reforms on June 19.

As a result of weeks of ministerial negotiation, they reconciled long-standing differences over the future of the monetary bloc and set the stage for discussion at the broader summit.

In a Macron victory, the Germans agreed on a euro-zone budget. In other areas, notably banking reform, progress is likely to be halted.

The reforms seek to redress the institutional weaknesses revealed during the years following the financial crisis.

Lacking control over interest rates and the ability to devalue their currencies, some countries have struggled to cope with violent economic shocks. Some, like Greece, were trapped in a “doom cycle” in which unstable markets destabilized the governments that supported them, which in turn weakened banks holding government bonds.

At the height of the crisis, a bailout fund was set up for emergency loans to countries that had lost access to the capital market. In 2012, the euro zone agreed to establish a banking union to contain risks and break the cycle of destruction. The European Central Bank now oversees all of the euro area’s consistently important banks. If a bank needs settlement, the Single Resolution Board provides short-term financing and imposes losses on creditors by limiting the cost to the taxpayer.

But five years later, the banking union remains incomplete. Macron is both committed to going through these remaining reforms and going further.

The purpose of the budget proposal for the euro area is to ensure that the economies of the countries continue to converge and help those affected by external events. New prime ministers from Italy and Spain seem to agree.

The Germans, Dutch and Nordic, however, resist the aggregation of risks across the bloc. They fear that fiscally prudent countries will end up subsidizing profligates. Italy, where an earlier version of the new ruling coalition seemed to disregard euro zone spending rules, did not reassure them.

The Franco-German compromise agrees with several proposals from the European Commission. The first involves reforms to the sovereign bailout fund of the euro zone, the European Stability Mechanism (ESM). It would function as a support to your bank resolution board, reinforcing the banking syndicate. And countries that were prudent but suffering an economic shock would have relatively soft access to a precautionary line of financing so that they could seek money before losing access to markets. So far, most of the ESM lending has been for countries already cut off from markets and conditional on the implementation of hard structural reforms.

All this would be a step forward, says Bruegel’s Guntram Wolff. But he thinks reforms must go further. The French and Germans agreed to keep the bailout governance unchanged. To be exploited, finance ministers must reach a unanimous agreement.

National laws mean that the parliaments of some countries, especially Germany, must grant their approval. This could prevent the fund from quickly ending up in a failed bank during a weekend, as may be necessary.

But the Germans insisted on national control, saying they have not hindered decision-making until now. His reserves also thwarted the immediate progress toward a common deposit insurance scheme. Juncker hoped to calm the fears of the Americans with a gradual implementation during which the common fund would lend to national schemes in times of difficulties. His hope that the banking union would be complete by 2019 now seems unrealistic. A commission proposal to create bonds backed by a pool of sovereign bonds was rejected. Without this, banks will have little incentive to diversify sovereign risk.

The Macron Award is a German concession on the euro zone budget. For the first time, the French point out, Germany has acknowledged that macroeconomic stabilization is not only a question of national governments, but a common concern. Although Macron glimpses a budget in the region of several percent of GDP, Merkel is known to want something “very miserly.”

However, as Mr Macron says, it would be a ‘real budget with annual revenues’. He would like to see revenue increase directly, possibly from a financial transaction tax, although this was controversial.

Most of the money would be invested in innovation, helping economic convergence. There is also mention of an unemployment stabilization fund to act as an emergency credit line for national unemployment insurance plans. But such a project, which agrees with German nervousness about tax transfers, may not be enough in deep crises.

MEPs Macron and Merkel can finally agree on the merits of a central budget. But others must now be convinced. Merkel’s coalition partner, the Christian Social Union, expressed skepticism. Dutch Prime Minister Mark Rutte said he sees little point if countries keep their public finances in order. However, even a well maintained roof can cause a leak.


How to Finance a Home with Informal Work?

We know that working informally and autonomously can be a way to earn extra money. As well as the reality of many Brazilians. But how does this informal worker prove income if he or she needs to finance a home?

Proof of income is a crucial factor in the process of financing a property of Caixa Econômica Federal , Banco do Brasil or other banks that operate with it. And it is very common for informal workers to use family income , since income from several people in the same household can be used.

That is, without registration in the portfolio, therefore, would be more difficult to prove what they receive. But there are ways to do that. Even working in an informal way.

Read also: How to make money from remote work?

How to verify?

How to verify?

Self-employed worker does not necessarily have a paycheck for not being a registered worker. In this way, he ends up having the same difficulty of proving income as the informal worker.

However, it is still possible to finance a home with proof of My Home My Life in both cases. According to a program primer, it is possible for the informal worker to prove income.

Also read: 100% of property financing: is it possible?

Among the documents, these documents are necessary:

  • Proof of Income Perception Statement (Decore)
  • Formal Customer Statement
  • INSS collection voucher
  • Contract of road transport of loads or persons
  • Declaration of amounts paid to the freight carrier or persons

Income Tax and bank statement

Income Tax and bank statement

There is also another way to prove income, through the Income Tax return . And also the bank statement. But in the case of the extract, only if the bank signaling that it is possible to use this modality.

Proof of income is important because it has substantial value in documenting the action of financing a home. This is because the value of the benefits can not exceed 30% of the proven value as family income.

In this way, proof of income is a limiter for the bank in releasing money. And also for the client, who will know the limit of his monthly payment responsibility.


What is a Credit Guarantee | Give wings to your plans!

Want to invest but are afraid of losing money? Then you need to know the FGC.

FGC (Credit Guarantor Fund) is a financial investment insurance.

The fund gathers banks and acts as a “deposit and application guarantor.” In the event that the financial institution goes bankrupt, it returns to investors the money deposited in the current account or in the majority of the investments. The maximum limit is R $ 250 thousand per CPF or CNPJ.

The institutions themselves support the fund with monthly contributions. The aim is to give stability to the financial system and give investors security.

The most popular applications that are covered by the FGC are: Current account, savings, CDB (Bank Deposit Certificate), LCA (Agribusiness Credit Letters), LCI (Letters of Real Estate Credit) and LC (Letters of Exchange).

You can check all institutions associated with the FGC here.

But be warned: not all banking services are secured. Investment funds, pension funds, Treasury Direct, financial bills, capitalization and stocks, for example, are out of coverage.

What would be the payment by the FGC?

What would be the payment by the FGC?

In the event of bankruptcy, the Central Bank intervenes in the financial institution and surveys the clients. Credits are listed by CPF or CNPJ of those who have a deposit or investment.

The fund selects a bank and nearby agencies for each client to receive money between 10 and 15 days. The FGC website publishes a notice with payment information: dates, required documents and agency address.


3 Great Fintechs That Help in Financial Education


We explained this month that there is great optimism about the development of fintechs in Brazil. With the possibility of getting close and even surpassing Sweden, considered the main country of the sector. In addition to market optimism, there is still another regarding the improvement of financial education provided by fintechs .

So if you’re involved – or after that optimism, try to get in – the fintechs market, start studying. Companies have revolutionized not only in money management, but also in financial education.

And the revolution of this education came much from the demand for more practical and uncomplicated financial services . In this, companies have created innovative products that provoke institutions that insist on the old models .

By improving the systems of payment and investment in the Stock Exchange, the financial education of these fintechs has been improving more and more. And so, let’s talk about some.



Ranked as the largest startup in Latin America, NuBank has been a pioneer in the financial services segment since its inception in 2013. 100% digital and secure, the company strives to be fair and transparent in its conduct with the customer. In addition to direct and objective communication .

The bank has its own blog with financial tips not only about the company itself but also about the market itself.



Founded in 2014, GuiaBolso is an app that allows you to synchronize with your bank account , in order to analyze and classify your spending information . The application, besides being modern, manages to be a quality financial planner. Even by the control of finances that the application offers the user.


Toro Investments

Ranked among the 250 most promising Fintechs in Brazil by CB Insights , the company is marked as the first fintech in Brazil to open a brokerage house totally independent of the banks . Besides being a great choice for those who do not have so much investment knowledge. This is because fintech offers practicality and simplicity when it comes to finding the best actions .


Personal Finance Has All (And No) Relation to Money

Superficially speaking, personal finance and money are like nail and meat . Especially when it comes to enriching and optimizing investments. I can not lie and say that this is not exactly what personal finance is all about, but in analyzing it in a bigger and more important way, personal finance has nothing to do with money.

But yes on how to use it to optimize your values ​​and priorities .

Read also: Small economies: where and how to invest?

Learn how to manage your money so it does not manage you


The truth is clear. Money does not buy happiness, but not having enough can be pain . And the level of this pain varies according to your situation. In the book Scarcity, Why Have Too Little Means So Much , authors and researchers Sendhil Mullainathan and Eldar Shafir describe in studies how lack of money affects our determination and well-being. And even politeness.

They explain that scarcity is not just a physical constraint . But it is also a mentality. When the scarcity of money captures the attention, it changes the way of thinking. And when that’s the only thing in mind, it’s the moment that affects what we perceive, how we weigh choices, how we deliberate, what we decide and, of course, how we behave.

As many do not like to think so, you have to agree that money is powerful . Most are controlled by it and in it comes personal finance. Even because it tries to learn how to manage money to be used for benefits . It is mainly about taking control. The main purpose of personal finance is to reach a point where you do not have to worry about money.

Money is not the goal

Money is not the goal

It is easier to assume that managing money is the same as pursuing it. Of course, having more money helps, though, it may not be the ultimate goal . If it is then you are doing it wrong.

For example, create a goal to be your primary motivation, be it a purchase or a trip. Clearly your goal involves money, but it is not the main reason. Because there is no point in joining money without a purpose . Money, then, is a tool and not an ideal.

Personal finance is not about accumulating tools. But rather about using that tool to live the life you want. In the Consumerism Commentary website, Luke Landes explains that money is only worth what you can do with it. “Assign your goals to the reasons why you are saving money, not money itself,” he concludes.

In the Big Picturing text, author Colin Wright says there is nothing wrong with money or wanting to get more out of it. Particularly if this helps to become more you and allow you to do more. In that case, it is important to make sure about why you are doing this.

Personal finance is more about mind than math

Personal finance is more about mind than math

There are three basic rules for personal finance:

  • Spend less than you earn
  • Pay your debt
  • Invest so your money grows

Although important, they are not the center of personal finance. Most of them, in fact, are very personal. Which means that sometimes you have to break down basic principles and do what works for you . More than math and rules, personal finance has to do with behavior .