Periphery euro zone countries are seriously ill and will have to default on their debt at some point, Satyajit Das, a risk consultant and author of "Traders, Guns & Money: Knowns and Unknowns in the Dazzling World of Derivatives" told CNBC Thursday.
Bundesbank chief Axel Weber has pushed his attack on EMU’s policy elites one step further.
Angela Merkel’s Christian Democrats have just suffered the worst defeat since World War Two in the Hamburg elections. Their vote share collapsed from 43pc to 21pc. A casualty of rising bread costs or Gefühlte Inflation as they say in Germany, perhaps, or bail-out rage?
For the sake of peripheral nations, Mrs Merkel has to stop paying lip-service to monetary union.
Spain has set in motion a partial nationalisation of its crippled savings banks, or cajas, but stopped short of the giant rescue deemed necessary by some experts to contain the country’s festering crisis.
By Christopher Quigley on Wed, 19 Jan 2011
The crisis has not gone away
Nouriel Roubini, the New York University economist who predicted the global financial crisis, said a key risk to the world economy in 2011 is the likely spread of Europe’s debt crisis. “One of the most important risks is financial contagion in Europe if the euro zone’s problems spread, as seems likely, to Portugal, Spain and Belgium,” Roubini wrote in an article in the Australian Financial Review today.
Irish banks are running out of collateral they can use to borrow from the European Central Bank, turning instead for emergency support from their own central bank on an unprecedented scale.
Let us assume for the sake of argument that Europe succeeds in containing the immediate EMU debt crisis, with help from Asia, and that Germany’s fractious coalition actually agrees to a bail-out fund big enough to make any difference.
THERE’S SOMETHING peculiarly apt about the fact that the current European crisis began in Greece. For Europe’s woes have all the aspects of a classical Greek tragedy, in which a man of noble character is undone by the fatal flaw of hubris.