In a sense, the Latin troika secured an agreement that may be confirmed in the total breach rather than the implementation.
The best hope for stabilizing the banking system is an equity capital infusion that is essentially converting German and French borrowing power into equity investments, followed up by more cheap lending to the banks by the ECB.
Deutsche Bank on the EU’s June 28th-29th summit and the plans for a European banking union.
Despite all the tricks, both old and new, recession keeps creeping in. They still think the answer is more money.
It is time to stop thinking in terms of impossible rescues and “compacts,” and demand that our European leaders adopt a more responsible conduct at their upcoming summit rather than sitting down to their customary European “beggars at the feast” spectacle.
Will German guilt overcome German fiscal responsibility? Will France give up control over its own budget to accept Germany’s demands?
Ever since worries over the euro debt crisis started to escalate, many investors have sought refuge in Scandinavia and Switzerland.
While some sort of fiscal and banking union is necessary to complement monetary union, this is most certainly a medium-term undertaking.
Europe may have got its wish this weekend. Soon, however, it will be reminded, yet again, that the most vengeful god is the one who grants such wishes.
The temptation to fade this Spain deal is high (and higher after Rajoy claimed victory and jetted off to the football match).
The more they look at the situation, the more I am convinced they will see not only how potentially awful the situation becomes, but that the cost to avoiding it right now are relatively small, and with proper preparation a Grexit can be managed down the road.
It won’t happen – at least not any time soon.