The EU has tried repeatedly, and failed repeatedly, to calm the markets. That is not for a lack of solutions at hand but rather because of a clear lack of Leadership and because dwarves as leaders in Europe prefer to drive forward by fixing their eyes on the rear view mirror and failing to see the incoming catastrophe in the form of an economic historical train or a mammoth depression bent on crushing them and their economies.
But Solutions still exist… albeit for a very limited time…
Consider the top three solutions:
1) To make the European Central Bank (ECB) a lender of last resort — much like the FED in the US. The first and arguably best solution — in which the ECB simply buys debt without limits from Italy or any other member state in trouble — is legally questionable under the EU treaty; what’s more, Berlin rejects the idea, citing the bank’s limited mandate, and says it could spark inflation.
2) To spread market weakness exposure by pooling eurozone debt via eurobonds. The creation of eurobonds is a political nonstarter for northern European states distrustful of their profligate, crisis-prone counterparts in the south
3) To massively increase the European Financial Stability Facility (EFSF) and start bailing out weak economies in earnest. And eurozone leaders have already tried — unsuccessfully — to create a bigger EFSF on the cheap by asking the BRIC countries to buy in.
Any of those solutions would reinstate confidence and lead to stability, but each one of these is easier said than done.
Simply put, the world’s markets are reeling because eurozone countries have failed to go beyond half-measures to resolve the crisis.
But the longer they delay taking any one of the three possible solutions, the closer the markets push them to the brink of disaster. And that is the solution they will force upon them and you:
A healthy scoop of plain vanilla catastrophe
Yours,
Pano
PS:
And after all as it has turned sour after long years of chin wagging and hand wrangling by inept politicians, times have changed and now Euro’s Survival isn’t necessarily in the best interest of the Peoples of Europe.
It might have been good for them yesteryear but no no more.
