A great American city has lost its sovereignty. It will install some sort of dictatorship
Detroit, the largest city in the 18th century United States is buried in debt. To exit from the crisis, the business community will be led by a manager who will have full powers.
At the micro level, the situation in Detroit is similar to that of Member PIGS. The difference is that the American city is not behind any International Monetary Fund, European Central Bank or come to his aid. In these circumstances, the only solution left maximum reduction of costs, given that only the level of 2009, debt stood at 2.45 city billions of dollars in revenue of 1.28 billion dollars. Moreover, the community must pay penalties of approximately 400 million dollars as a result of contracts concluded with two respected banks, which have helped the municipality to borrow money in 2009. "Detroit was once the sixth most powerful American city, but in recent years has lost half of the budget and the entire auto industry," said the 24 / 7 Wall Street Ted Damutz, senior credit officer for Moody's Investors Service in Chicago.
Detroit has become so unable to govern itself and lose virtually sovereignty. Michigan Treasurer has already taken the mission to assess the situation finananciară the city, which means that future leadership will be taken over by a municipal emergency manager. The same thing happened in the U.S. in the town north of Detroit, Flint and Pontiac.
Appointment of an emergency manager requires installing a local dictatorships, the conditions under which it may, without requiring local council approval, any measure likely to solve the financial problems of the community. He can terminate contracts, reduce the number of employees in the central, as decisions and plans can change previously adopted by the mayor. There will be no such dispute between the mayor and city council on the package of measures to reduce costs and pressure from employers and unions will be virtually useless.
Even so, the mission manager will be very complicated in the context of very large debts. Moreover, Detroit faces the problem of an aging population, the number of pensioners, which will have to pay them a pension, is high. However, the experience of Alor town in this situation, only the installation of a manager was not sufficient to solve all these failures ge. A solution would be bankruptcy, but even this measure can be taken immediately.