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EU: First paralysis, now panic
ABC, Madrid ^ | 8/11/2011

Posted on 08/11/2011 6:51:32 PM PDT by bruinbirdman

Political dithering and rumour-mongering have caused dramatic falls in global markets. Fiscal integration will be necessary if the euro is to survive the storm. And Angela Merkel is the only political leader who can make it happen, says ABC's editorial.


Público (Madrid) : "Now it's France's turn" ; De Morgen (Brussels) : "The eurozone shakes"
Die Presse (Vienna) : "France fears for AAA rating"

The period of calm which followed the European Central Bank’s intervention on Monday did not last long. On 10 August markets worldwide were swamped by an unprecedented wave of panic, whose like has not been seen since the financial crisis of 2008. This was notably the case in Madrid, which has lost 17 points in only nine sessions. Fears that speculators will now target French debt have only added to the chaos.

The French president responded rapidly by cutting short his holiday, a decision that speaks volumes about the gravity of a situation in which positive statements issued by ratings agencies have not been enough to calm investors. Sarkozy is certainly not the only political leader who will have to cut short his holidays. The European Commission president, José Manuel Durão Barroso, should return to Brussels as soon as possible. And Prime Minister Zapatero ought to get back to work, especially when you consider the impact of these disastrous events, which will plunge more families into poverty, on the Spanish economy and financial system.

It is clear that the goal of the July 21 summit -- avoiding the spread of contagion to Spain from countries in difficulty -- has not been attained. The European Central Bank had to intervene at the last minute to save Italy and Spain, which are the eurozone’s second and third ranked economies. Now France, its second ranked economy, is under sustained attack. When is Germany, which remains insolently prosperous, going to remove its head from the sand?

Until now, Merkel has, along with the majority of leaders on the European Council, reluctantly agreed to sanction bailouts – which in the case of Greece did not work. As a result, she is facing a domestic political revolt that is increasingly threatening the balance of power in Germany. All the indications are that we are fast approaching a moment where there will only be two possible solutions: comprehensive budgetary integration in the eurozone – an option that has been criticised by many German economists – or an end to the single currency, which will in turn result in the demise of the European project.

To date, Chancellor Merkel has demonstrated an unwavering commitment to Europe, but she is also capable of changing her mind, as witness her sudden about-turn on an issue as serious as nuclear power. Once again, the fate of Europe will depend on a decision to be taken in Germany.


TOPICS: Business/Economy; Crime/Corruption; Foreign Affairs; News/Current Events
KEYWORDS: ecb; economy; eu; europe

1 posted on 08/11/2011 6:51:34 PM PDT by bruinbirdman
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To: familyop

yitbos

2 posted on 08/11/2011 7:00:39 PM PDT by bruinbirdman ("Those who control language control minds." -- Ayn Rand)
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To: bruinbirdman; All
Just speculating here, but I wonder what the collapse of the Euro would mean to currency speculators like Geroge Soros. Does he hold any now? Did he see this coming? Does he know which way this will go? Did he engineer this like the Pound and Ruble?
3 posted on 08/11/2011 7:03:04 PM PDT by Navy Patriot (Holy flippin' crap, Sarah rocks the world!)
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To: Navy Patriot

I don’t think even Soros has enough money to manipulate the Euro. Too many countries with too many Euros. It’s like thinking a mouse can move a mountain. But you can bet he will make money from the collapse.


4 posted on 08/11/2011 7:09:16 PM PDT by Blood of Tyrants (Islam is the religion of Satan and Mohammed was his minion.)
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To: bruinbirdman
or an end to the single currency, which will in turn result in the demise of the European project.

I vote for this option. The EU and the Euro are Frankensteins that should never have been brought to life.

5 posted on 08/11/2011 7:15:58 PM PDT by ChildOfThe60s ( If you can remember the 60s....you weren't really there)
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To: bruinbirdman

Hasn’t hurt China’s confidence in the euro.


6 posted on 08/11/2011 7:32:05 PM PDT by Olog-hai
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To: bruinbirdman

Strange language, saying that southern European debtor nations are victims “under” “attack” by speculators. How could speculators be making those nations’ debt situations any worse?


7 posted on 08/11/2011 8:02:26 PM PDT by familyop (We Baby Boomers are croaking in a noisy avalanche of rotten politics smelled around the planet.)
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