I keep writing that the only way out to the European debt crisis and the much feared domino or contagion effects is to a) stop the Ponzi scheme of public debt and its market for lemons of sovereign debt along with its EU money creation, b) restructure the debt and c) issue new one at EU level. Moreover a tax on financial transactions could start to help funding the EU budget and some EU governments. A financial transaction tax giving revenues for some 200 billions Euro per year could replace several austerity measures and aid packages to single countries.
When EU foreign currencies were attacked by speculation we got the Euro to replace them. If now we get sovereign bonds to be attacked we need the EU bond to replace them.
If we still are believers in the EU project we need now more Europe and European economic measures not less to sustain the project. The bailouts are national and economic nonsense. Let’s see when it comes to bigger countries like Italy, considered so far a Black Swan (which is not)…PIGS will not fly any more...
Thursday, December 2, 2010
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1 comment:
The problem with the EU, and especially PIGS is that they were spending too much even before the depression. Greece's debt didn't suddenly magically appear as a result of a recession. It was already there, it just became fatal when the economy went south. The problem for the EU isn't just an economic downturn. If that was the only problem, some stimulus spending could arguably be the answer. The problem for the EU is debt combined with a flat economy.
European debt crisis
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