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Thread: Germany's Merkel Says Euro Is in Danger

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    Germany's Merkel Says Euro Is in Danger

    German Chancellor Angela Merkel called for the development of a mechanism that would allow for an orderly insolvency of EU member states. She also urged new disciplinary mechanisms be created to ensure that EU member states meet their fiscal deficit targets.

    CNBC reported:

    Recommending tough moves against "notorious deficit sinners" in the euro zone, such as withdrawing voting rights, the German leader told parliament in Berlin: "Above all, what's necessary is to develop a process for an orderly state insolvency.

    "With that we would create an important incentive for euro zone member states to keep their budgets in order." Germany shocked financial markets on Tuesday by taking an apparently unilateral initiative involving an immediate ban on naked short-selling of euro government bonds and on related transactions in credit default swaps (CDS).
    News Headlines

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    Re: Germany's Merkel Says Euro Is in Danger

    Quote Originally Posted by donsutherland1 View Post
    German Chancellor Angela Merkel called for the development of a mechanism that would allow for an orderly insolvency of EU member states. She also urged new disciplinary mechanisms be created to ensure that EU member states meet their fiscal deficit targets.

    CNBC reported:



    News Headlines
    Are there ANY Euro-zone states currently inside the 3% target? Take voting power from ALL of them. THAT would be amusing...
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    Re: Germany's Merkel Says Euro Is in Danger

    I think she has good reason to be worried about the euro's future...but I think her remarks may frighten the markets and hasten its decline. Even if the euro zone took voting rights away from deadbeat nations (which they would never agree to do), it still wouldn't address the fundamental problem that the individual nations set their own fiscal policy but the European Central Bank sets their monetary policy. Either the euro zone needs to adopt a US-like federalist system of government, or they need to devolve monetary policy back to the nations...and the latter goal is considerably easier.
    Last edited by Kandahar; 05-19-10 at 05:11 PM.
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    Re: Germany's Merkel Says Euro Is in Danger

    the situation here aint much better, says volcker, who sees threats of "existential crisis"

    what's needed, he warns, is a "sense of urgency" which he frankly just doesn't find

    he worries over what he calls our "subnormal recovery"

    Volcker Says Time Is Running Out for U.S. to Tackle Fiscal Woes - Bloomberg.com

    he's right, of course

    Mortgage delinquencies drag on economic recovery - Yahoo! Finance

    meanwhile, united states POLITICAL leadership can't even propose a budget

    Next year's budget sinking in deep red ink - The Hill's On The Money

    too, too tragically TODAY

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    Re: Germany's Merkel Says Euro Is in Danger

    Just another sign of the demise of the the "United States of Europe." This whole idea was outlandish from the start. What's next? United States of Korea? Dogs and Cats living together! . . . Mass hysteria!
    Last edited by hoops; 05-20-10 at 06:20 PM.

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