20th EU Crisis Summit - Solutions or more Fudge ?

[ang]

Today sees the 20th EU summit to deal with the financial crisis which became public news in 2008. Is there any possibility that the seventeen eurozone Nations can find common ground leading to solution rather than more fudge ?

Angela is opposed to pooling EU debt without further EU integration (even then its only a possibility). Francois says must have EU debt pooling before we can consider further EU integration. Spain says Banks must be recapitalised directly from EFSF/ESM and Italy says a policy decision must be found to lessen the Italian debt burden.

Growth "stimulus" seems to be the one area all 17 members agree on and even that's a fudge. The growth money was raised by €10BN to €130BN but had been sitting in the EIB awaiting dispersal anyway for use in infrastructural programmes etc. etc.

Can, Road, Kick come to mind but I may be wrong and our leaders may well at last arrive at solution.

The Barosso and Van Rompuy plan of Banking Union, Fiscal Union and Political Union will be discussed in draft form.

[ang]

Pre summit positions now starting - German "official" says we mustn't be too concerned about Spanish and Italian bond yields and that it is essential to stick with existing EU rescue fund rules insisting the EU cannot keep changing those rules.

[ang]

Ireland, France, Italy, Spain, Portugal, Greece and Belgium say they will push for a Banking Union and for the pooling of bank debt at EU level.

Looks like Angela has a fight on her hands.

[DCon]

As the German government have low expectations, I think we should too

German govt source: EU summit will produce no detailed decisions but seeks to accomplish important work on ambitious EU roadmap

http://www.forexlive.com/blog/2012/0...us-eu-roadmap/

[MPB]

One thing you can be guaranteed will not come out of this 20th sequal to the nonsense of EU heads of states meetings, is a solution.

A solution involves winding down about 50% of European Banks , burning bondholders all over the World and disbanding the ECB in it,s current form and starting the EU Project from scratch.

[C. Flower]

Pre summit positions now starting - German "official" says we mustn't be too concerned about Spanish and Italian bond yields and that it is essential to stick with existing EU rescue fund rules insisting the EU cannot keep changing those rules.

Monti is threatening to force a General Election, if there is nothing done to bring down Italian bond costs. Italy has a big 10 year bond sale coming up and their most recent price was heading for 5%.

Berlusconi has said it would be no bad thing if Germany was to leave the Euro (in fact of all the lousy options for the current system, that looks like the least lousy).

http://www.ft.com/intl/cms/s/0/e3878...#axzz1z4hhmYhi

Barroso and Rompuy's "solution" would in fact do nothing to tackle the real problems, which are the inability of European capitalism to maintain the living standards and profit levels to which people are accustomed.

Merkel that the economic system can be saved by enriching the few and impoverishing the many.
It's Reagan and Thatcher's recipe dressed up in new terminology.

But in order to implement it evenly across Europe, they are attempting a political and economic coup - seizing power from the people of Europe, who have up until now been able to vote on policy at the ballot box in each state - and relocating those powers to an unelected centre.

These two simultaneous political and economic moves (which will in any event be unworkable) will inevitably produce an enormous backlash, both against the European Institutions and national governments that have ceded power, and unfortunately in worsening relations between states.

Lucinda Creighton was interviewed this morning on RTE, and as well as sounding half asleep and depressed, was embarrassed to have to admit that the "stimulus package" on offer was a possible 10 billion for the European Investment Bank. She claims this could be leveraged by a frightening multiple. This kind of leveraging, which was used throughout the so called boom, was inevitably followed by collapse. Why should it work now, when there is a much higher realisation of risk of default ?

[ang]

The Barroso/Rompuy so called EU Road Map will most definitely do nothing to stem the growing EU crisis as it does not address the root cause which is Governments passing on debts of private banking institutions to their citizens.

It (road map) does though further the agenda of the EU commission and its unelected elites which @cassflower sums up perfectly above.


@MPB sums up the solution above in that banks must be left to fail and must shoulder their own fuinancial burdens if they wish to succeed.

[DCon]

Noonan concentrating elsewhere. All must be fine in Ireland

Irish FinMin: One of the main topics of EU summit is how to get Italian bond yields to 4% or below

Second main topic is to avoid bank recapitalisations impacting Spanish overall debt burden

http://www.forexlive.com/blog/2012/0...to-4-or-below/

[DCon]

nothing new so far

zerohedge ‏@zerohedge

Schauble follows up by saying Germany will have fiscal union as precondition for Eurobonds. So same old


zerohedge zerohedge ‏@zerohedge

Schauble says Berlin willing to negotiate on Eurobonds

[ang]

Schauble should speak to the Finnish PM because he says - "Finland does not like eurobonds"

[C. Flower]

The Barroso/Rompuy so called EU Road Map will most definitely do nothing to stem the growing EU crisis as it does not address the root cause which is Governments passing on debts of private banking institutions to their citizens.

It (road map) does though further the agenda of the EU commission and its unelected elites which @cassflower sums up perfectly above.

@MPB sums up the solution above in that banks must be left to fail and must shoulder their own financial burdens if they wish to succeed.

I agree that passing the debts of investors on to the population at large is totally unacceptable. Would eurobonds not in fact just do the same thing, at one further remove ? At the end of the day, the public would be expected to pay.

The real problems of Europe are dual - they are systemic, in that the system is chaotic, anarchic and tends to concentrate more and more wealth into fewer and fewer hands - but also historic, in that we are now in a point in history in which much of wealth-producing labour is now located in China, India, Brazil etc., leaving a population in Europe and the US that doesn't have access to productive work, and much of which is over-educated or wrongly educated, for the work that is available. The strategy of Thatcher and Reagan was precisely to break the relatively well paid and well organised working classes of their own regions, and transfer the work to where it could be done cheaply. The rationale they fobbed people off with is that their economies would become "more intelligent" leaving the dirty work to elsewhere. But if it is cheaper to produce a washing machine in China, it is also cheaper to produce a graduate. There are millions of unemployed or underemployed graduates in the west now. Work is increasingly mobile, and a wealth-producing, sustainable economy can't be built on services, without manufacturing.

The other leg of their strategy was deregulation of the finance sector, so that globalised capital was drawn in to their banks and disbursed at low interest rates, to try to stimulate that flat-lining western economies. A huge amount of wealth was sucked into toxic products and destroyed.

Even if all the bank debt was written off tomorrow, Ireland would still have a an unmanageable budget deficit and astronomic unemployment.

The Bank debt was generated because the economies of the west were flat-lining and a huge amount of 0 % loans with no real collateral were issued as a substitute for real productive investment (which had gone elsewhere).

When the factory jobs went east, I think they took our knowledge of how to fight our corner with them. We are having to learn the lessons of how to fight for rights and a decent living all over again, under conditions when these things can only be obtained by changing the whole orientation and purpose of our economic system.

[PaddyJoe]

Paul Cunningham ‏@RTENewsPaulC
Kenny/Eurobonds: Issues that at first sight seem to be rejected, inevitably are left on the table and find a way of becoming a reality later

Like corporation tax changes, for instance

[DCon]

Schauble should speak to the Finnish PM because he says - "Finland does not like eurobonds"

quick denial!

zerohedge ‏@zerohedge

GERMANY FINMIN SPOKESMAN SAYS SCAHUBLE DID NOT SAY GERMANY WILL MOVE SOONER ON SHARED LIABILITY FOR DEBT

[C. Flower]

Schauble should speak to the Finnish PM because he says - "Finland does not like eurobonds"

Finland may have to lump them. The impetus towards USE is powerful - either break up or union will come - there's no possibility of things staying as they are.
USE with no democracy and no shared financial responsibility would not be likely to last a wet week without uproar.

And neither break up nor union would be a solution, but just a new phase of crisis.

The can is reaching the end of the road and is pretty well glued to the toe at this stage.

[PaddyJoe]

Mariano Rajoy has admitted today that there will be no agreement at this summit on direct financing of the Spanish banks and this will remain a medium term objective in the context of a banking union.
Are you listening, Enda?
http://internacional.elpais.com/inte...75_588465.html