[P2P-F] Fw: [endthefed] The eurozone really has only days to avoid collapse - Wolfgang Münchau

Mon Nov 28 21:34:35 CET 2011

Interestingly, this all sounds strangely familiar with the putting
together that became the united states in america.  I wonder if anyone
else sees the bizarre reflection....?

marcos
Santa Fe, NM

On Sun, Nov 27, 2011 at 6:15 PM, Natalie Golovin <10natalie at cox.net> wrote:
>
>
> From: Aaron Krowne
> Sent: Sunday, November 27, 2011 4:31 PM
> To: endthefed-list at meetup.com
> Subject: [endthefed] The eurozone really has only days to avoid collapse -
> Wolfgang Münchau
>
> This pretty much wraps it up.  The European countries are going to have to
> agree to a pan-European Treasury and purse, as well as limitless printing,
> if the euro is going to survive.
>
> Side note: it sure is interesting how gold and silver seem downright
> agnostic to this level of crisis in the euro.  I'm sure that's just free
> market forces at work, though! LOL!
>
> http://www.ft.com/intl/cms/s/0/d9a299a8-1760-11e1-b00e-00144feabdc0.html#axzz1exDBe1JH
>
>> Unless something very drastic happens, the eurozone could break up very
>> soon.
>>
>> Technically, one can solve the problem even now, but the options are
>> becoming more limited. The eurozone needs to take three decisions very
>> shortly, with very little potential for the usual fudges.
>>
>> First, the European Central Bank must agree a backstop of some kind,
>> either an unlimited guarantee of a maximum bond spread, a backstop to the
>> EFSF, in addition to dramatic measures to increase short-term liquidity for
>> the banking sector. That would take care of the immediate bankruptcy threat.
>>
>> The second measure is a firm timetable for a eurozone bond. The European
>> Commission calls it a “stability bond”, surely a candidate for euphemism of
>> the year. There are several proposals on the table. It does not matter what
>> you call it. What matters is that it will be a joint-and-several liability
>> of credible size. The insanity of cross-border national guarantees must come
>> to an end. They are not a solution to the crisis. Those guarantees are now
>> the main crisis propagator.
>>
>> The third decision is a fiscal union. This would involve a partial loss of
>> national sovereignty, and the creation of a credible institutional framework
>> to deal with fiscal policy, and hopefully wider economic policy issues as
>> well. The eurozone needs a treasury, properly staffed, not ad hoc
>> co-ordination by the European Council over coffee and desert.
>> ...
>> [Merkel's] own very public opposition to eurobonds has now become a real
>> obstacle to a deal. I cannot quite see how the German chancellor is going to
>> extricate herself from these self-inflicted constraints. If she had been
>> more circumspect, she could have travelled to the summit with the proposal
>> of the German Council of Economic Advisers, who produced a clever, albeit
>> limited and not yet fully worked-out-plan. They are a proposing a “debt
>> redemption” bond – another candidate for this year’s top euphemism award.
>> The idea is to have a strictly temporary eurobond, which member states would
>> pay off over an agreed time period. At least this proposal would be in line
>> with the more restrictive interpretation of German constitutional law.
>> ...
>> Italy’s disastrous bond auction on Friday tells us time is running out.
>> The eurozone has 10 days at most.
>
>
>
>
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