Domino Effect at Work with Euro - Last Days of the Eurozone ? - UPDATE: S & P put EU on Negative Watch

[Dr. FIVE]

Karl Whelan in forbes on the secret tool Draghi uses to run Europe (which I initially read as ruin Europe..)
This is the first time I've seen one of the mainstream economists show concern for democracy being hollowed out I think

http://www.forbes.com/sites/karlwhel...to-run-europe/

Leveraging the EFSF\ESM: Perhaps the most powerful suggestion for easing the sovereign debt crisis has been Daniel Gros and Thomas Meyer’s proposal to provide Europe’s bailout funds with a banking licence, thus allowing them to borrow from the ECB. This ESM bank could potentially purchase trillions of euros worth of government bonds and its existence would provide Italy and Spain with the kind of “bond buyer of last resort” that the Fed has provided for the US government and the Bank of England has provided for the UK government.

However, this plan currently stands little chance of getting off the ground because the ECB opposes it. Now you might argue that the EU can go ahead and give its bailout funds a banking licence anyway and indeed they could do just that. But, by now, you know the tool that Mister Draghi can use to undermine this plan: The risk control framework. The ECB can simply refuse to accept the ESM bank as an “eligible counterparty”.

All told, the story of ECB’s serial use of its risk control framework raises pretty serious questions about whether it is has been a good idea for Europe to provide this much power to a single unaccountable institution.

[riposte]

Karl Whelan in forbes on the secret tool Draghi uses to run Europe (which I initially read as ruin Europe..)
This is the first time I've seen one of the mainstream economists show concern for democracy being hollowed out I think

http://www.forbes.com/sites/karlwhel...to-run-europe/

It's a bit late in the day for Whelan to be coming out with this stuff ...... he's a bought economist ....... and as WT Cosgrave said ......" once a man is bought, he stays bought."

[Hapax]

Italian ten-year bond yield at 6.4% this morning, above the equivalent Irish yield at 6.26%. Interesting.

[riposte]

The ECB said in a brief statement that it won't accept bonds issued or guaranteed by the Greek government "for the time being" as collateral in its monetary policy operations, adding that banks would have to revert to "emergency lending assistance', or ELA, from the Greek central bank to meet their funding needs in the meantime.

http://www.nasdaq.com/article/ecb-pu...20120720-00588

The euro fell to the lowest level in more than 11 years against the yen as concern escalated that Europe’s debt crisis is deepening.

“If Greece doesn’t fulfill those conditions, then there can be no more payments,” German Vice Chancellor Philipp Roesler told broadcaster ARD yesterday.

The IMF will stop paying rescue aid to Greece as it is already clear the nation will not be able to fulfill its promise to cut debt to 120 percent of annual economic growth in euro terms by 2020, Der Spiegel said, citing unidentified EU officials

.

http://www.businessweek.com/news/201...pain-bill-sale

[riposte]

RTE news headlining with the fall in the Euro, the cost of Spanish bonds and the ECBs refusal to accept Greek bonds as collateral.

[C. Flower]

http://www.nasdaq.com/article/ecb-pu...20120720-00588


http://www.businessweek.com/news/201...pain-bill-sale

ELA in our experience has to be paid for, even though issued via our own banks.

The IMF has also threatened to stop funding Greece on the grounds, basically, that it will not be able to afford to repay the loans.

It is bullet dodging time. Everyone in the know knows that most of the debt will not be paid back, but no one (no individual, bank, or government) wants to be the one not being repaid. The strategy in the EU bodies has been to stick sovereign and national banks governments as much as possible with "national" debt, to avoid "contagion" or default across national boundaries. But this of course is also yet another incremental step towards the break up of the eurozone into separate national economies. New debt being loaned into Europe is now based on "national interest rates" rather than the rate set by the ECB.

Greece is being threatened with a social catastrophe. Our turn may not be too far off.

[C. Flower]

Karl Whelan in forbes on the secret tool Draghi uses to run Europe (which I initially read as ruin Europe..)
This is the first time I've seen one of the mainstream economists show concern for democracy being hollowed out I think

http://www.forbes.com/sites/karlwhel...to-run-europe/

Dead on. Karl Whelan is hitting some nails at the moment.

The only thing he doesn't address is, in whose interests is the ECB acting ?

Do we have any reason to believe that Draghi is not just a bigger, glossier and more foreign version of Seanie Fitzpatrick ?

[TotalMayhem]

Just in: Moody's put negative outlook on Germany

Scheisse hits Ventilator.

[ang]

Moodys stirring the pot a little. Is there the scent of fear in markets ? or is the reality of we don't have the money to pay starting to register. Market pressure on politicians for policy control is becoming frantic -

@Zerohedge

Moody's Changes Aaa-Rated Germany, Netherlands, Luxmebourg Outlook To Negative

[MPB]

Moodys stirring the pot a little. Is there the scent of fear in markets ? or is the reality of we don't have the money to pay starting to register. Market pressure on politicians for policy control is becoming frantic -

@Zerohedge

If the ratings agencies and markets were students, they would be placed in the class for slow learners.

It was obvious 4 years ago, that German, US, British and French Banks were insolvent and therefore all those countries attempting to bailout the unbailoutable, were themselves insolvent.

[ang]

Spanish Statement by Secretary of State Mendez de Vigo

Spain, France and Italy require immediate implementation of the agreements of the last European Council

Both Denmark, outgoing Chair of the Council of the European Union, including Ireland, the next president, have supported these interventions.

[PaddyJoe]

Spanish Statement by Secretary of State Mendez de Vigo

Being denied now by Monti's office, apparently.

[PaddyJoe]

And France:

PARIS, July 24 | Tue Jul 24, 2012 4:55pm BST
(Reuters) - France's European Affairs Minister Bernard Cazeneuve denied on Tuesday that Spain, Italy and France had called in a joint statement for the swift implementation of decisions made at the last European Union summit.

Spain earlier issued a statement saying the three countries had agreed during talks in Brussels to call for fast action on euro zone aid measures, citing a "worrying gap" between decisions taken at last month's summit and their implementation.

"This information is untrue," Cazeneuve told Reuters.

http://uk.reuters.com/article/2012/0...8I400C20120724

[PaddyJoe]

The statement was on the official Spanish government website earlier:

[C. Flower]

And France:

http://uk.reuters.com/article/2012/0...8I400C20120724

Surely there were no decisions. There was no authority to make any decisions that mattered.