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The FT is reporting today that the new fiscal rules for the EU “include a commitment not to force private sector bondholders to take losses on any future eurozone bail-outs”. If this principle really does get enshrined into some new treaty, it will be one of the most fiscally insane derelictions of statesmanship the world has seen — but it certainly helps explain the short-term rally that we saw today in Italian government debt. Right now, the commitment is still vague:
Act Two in the unfolding Eurozone drama begins this week as leaders at the European summit announce emergency measures to prevent further market turmoil.
by Justin Fox | 3:32 PM December 8, 2011 It's always good to have a Plan B, and probably a Plan C and D as well.
The recent rise of technocratic governments in Italy and Greece is the culmination of a process that has been unfolding in Europe over the last 20 years.
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Understanding developments in the European crisis has become rather like Kremlinology, trying to figure out the meaning of subtle changes in wording and rearrangements of the Politburo on the podium for May Day parades. One example is Mario Draghi of the European Central Bank (ECB).
Is Europe About to Unravel?
Fighting (for?) Europe: How European Elites Lost a Generation - SPIEGEL ONLINE - News - InternationalWhen Kostas Dekoumes, a 24-year-old Greek, is asked about Europe, he launches into a rant about German Chancellor Angela Merkel.
Time for Plan B: How the Euro Became Europe's Greatest Threat - SPIEGEL ONLINE - News - InternationalIn the past 14 months, politicians in the euro-zone nations have adopted one bailout package after the next, convening for hectic summit meetings, wrangling over lazy compromises and building up risks of gigantic dimensions.
Euro Debt Crisis
By Satyajit Das, the author of Extreme Money: The Masters of the Universe and the Cult of Risk (forthcoming August 2011) and Traders, Guns & Money: Knowns and Unknowns in the Dazzling World of Derivatives – Revised Edition (2006 and 2010) In Oscar Wilde’s Importance of Being Earnest , Lady Bracknell memorably remarks that: “To lose one parent… may be regarded as a misfortune; to lose both looks like carelessness.”
If an ordinary person found themselves in a position of unmanageable debt - something which we all try to avoid - they could have a new chance.
Yesterday the long awaited Euro rescue plan was announced.