The "muddling thru" of the last 3 years is drawing to an end according to the European representative of the biggest bond investing firm.
European governments must rapidly commit to fiscal union or a partial break-up of the euro to prevent a "fundamental erosion" in demand for the region's debt, Pimco, the world's biggest bond investor, has warned.
I don't see the Germans opting for a real fiscal union. Do you? It seems imprudent.
The euro currency's father says it was flawed from the start. Um, so now he tells us.
The euro project was flawed from the start and the current generation of European leaders has failed to address its fundamental problems, Jacques Delors, the architect of the single currency, declares today.
Laurence Copeland gets it exactly right: the members of the euro zone are fundamentally incompatible and should get a divorce.
There is in the end no way of squaring this circle. The euro zone ties a country with a deeply-ingrained fear of inflation and a longstanding commitment to thrift to a bunch of neighbours most of whom have a historic tolerance of inflation and feckless spending. It is a wonder this marriage has lasted as long as it has. Now that the time has come for divorce, you canít help thinking it is a pity they didnít think to draw up a prenup.
Ambrose Evans-Pritchard holds the European Central Bank responsible for causing a contraction of the money supply of Southern European countries and precipitating the current solvency crisis for European banks. I think this demonstrates that the ECB shouldn't serve as the central bank of Greece, Italy, Spain, and Portugal. These countries need a central bank dedicated to the conditions of their economies.
The US Federal Reserve is trying to stop the liquidity crisis gripping European banks. Which shows you how weird things have gotten given that the Fed is not the central bank for Europe. The Europeans should use this breathing space to organize replacement currencies for the southern European countries. It is time to act to break up the euro zone.
The euro as presently constituted is not going to be saved. Angela Merkel doesn't want to admit it. But so far it is hard to see the German position as leading to anything but a euro break-up. So time to get on with it. Ignore Merkel's rhetoric about wanting to save the full euro zone. Look at the actions of her government and of the ECB. The only option possible is break-up.
Break-up is sensible anyway. There's no way to either grow out of the crisis. Southern Europe is headed back into recession. Southern European sovereign defaults threaten to cause a massive wave of bank defaults. The southern Europeans need to do defaults in their own currencies. Also, southern European labor markets are incompatible with the euro.
|Share |||By Randall Parker at 2011 December 03 09:57 PM Europe Monetary Union|