The Four Paths Forward For The Euro Area
EU Summit: How Germany reacted to Merkel's 'defeat'
The Four Paths Forward For The Euro Area
For the first time in years, following this week's European summit in Brussels Angela Merkel has returned to Germany defeated - with the newspapers saying she has been 'blackmailed' and suffered an 'evil setback'.
http://www.telegraph.co.uk/news/worldnews/europe/germany/9366675/EU-Summit-How-Germany-reacted-to-Merkels-defeat.html
Satyajit Das: “Super Brussels” Saves The World, Again, Maybe!
Despite progress, European leaders refuse to acknowledge that a portion of the debt of the peripheral nations is unrecoverable. None of steps announced improves the sustainability of the debt levels of the affected countries, their access to markets or cost of borrowing in the medium to long term. Ultimately, it is not possible to solve the problem of excessive indebtedness with more debt or by simply changing the lender.
Austerity dooms Europe to a prolonged contained depression as the debt burden is worked off. The alternative, a debt write-off, would result in significant loss of wealth for the mainly European lenders and investors triggering an economic contraction and prolonged period of economic stagnation. There are now limited policy options available.
For the moment, investors and the non-German members of the Euro-Zone are celebrating. It would be wise to remember American writer Edgar Howe’s observation: “there is nothing so well known as that we should not expect something for nothing – but we all do and call it hope.”
http://www.nakedcapitalism.com/2012/07/satyajit-das-super-brussels-saves-the-world-again-maybe.html
Austerity dooms Europe to a prolonged contained depression as the debt burden is worked off. The alternative, a debt write-off, would result in significant loss of wealth for the mainly European lenders and investors triggering an economic contraction and prolonged period of economic stagnation. There are now limited policy options available.
For the moment, investors and the non-German members of the Euro-Zone are celebrating. It would be wise to remember American writer Edgar Howe’s observation: “there is nothing so well known as that we should not expect something for nothing – but we all do and call it hope.”
http://www.nakedcapitalism.com/2012/07/satyajit-das-super-brussels-saves-the-world-again-maybe.html
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