A "two stone" solution to the Euro crisis will unbalance the coalition

yank

Heh. A haircut for debtholders, but then more debt is to be issued. Only amongst the Brussels crowd could that actually be mouthed. You'd get laughed out of town, anywhere else.

And I'd love to be a fly on the wall when the EU twits tell the Federal Reserve it's about to take a haircut on all those loans. Yeah, that'll sell well to the American electorate, I'm certain. And surely we can count on Obama's loyal opposition to keep silent about it all, can't we? All those helpful Tea Party types would like nothing better than to fill the foreign trough, right?

Kiss the euro goodbye. It's dead as disco. And it matters not what "European leaders" want. I have the over/under date for Frau Merkel to back the deutschmark trucks up to the banks as June 2012. Some limpalong financing to the PIGS up until then... to no avail... then BOOM. The only question is... will the frogs beat them to the punch?

JohnPage

It wouldn't be "European" fiscal integration, it would be eurozone fiscal integration. And it ain't going to happen, because national taxpayers across the eurozone would boot out national politicians who followed "integrated" orders, especially as in some countries they would lead to decline and depression, and in others to taxpayers' adopting ever increasing liabilities for those countries.

paulg

This is all in your head Daniel, your analysis, loses touch with reality on a daily basis.

A political project founded without reference to geo/economic reality will be destroyed by, well! reality. Its over daniel its only a matter of time, London and New York are moving against it, no one can stop it now.

TomTom

The EZB has made clear it needs more capital ie. it does not want to buy any more junk bonds. Germans have $513 billion invested in mutual funds and life insurance policies in junk bonds from PIIGS.

Merkel cannot accede to anything and Schauble is a sick old man on the Abschussrampe - he is history.

The best option for Germany would be Peer Steinbrueck as Bundeskanzler - Merkel has been a waste of space and done far less than Schroeder which is astounding. She has destroyed the CDU as the party of economic rationality and as Kohl's chosen successor has continued his profligate policies of spend to bankruptcy and tax to ruin.

Merkel is dead and her defence minister - aristo Guttenberg fancies himself as her successor with his Bismarckian wife, but he is too lightweight and the CDU will be the junior partner in an SPD coalition next time around unless the New Anti-Euro-Pro_Germany Party is formed before then

Senor Frizby

I see many benefits for mainland European countries to operate as one federal entity. The UK would do well to steer well clear of integration. The EU would (will) end up robbing us of our dynamism as a nation - what there is left of it - and ruin would follow.

Yow Min Lye

How interesting that German courts set "clear limits on further European integration" whilst ours just constantly suck up to it.

Baron Pippin II

fiscal union and only fiscal union can fix the Euro for good, anything else falls short, the markets know it.

will the European unwashed swallow the final nail to Europe’s coffin of federalisation? Will the Tories here have the guts, consult the people on the future of the undemocratic construct?

Dennis Churchill

The European political class and the British Division in particular, can’t keep putting off the inevitable need to consult their electorates on whether the project towards ever greater integration leading to a Federal State continues.
This year, next year...

Vulture

Your opening sentence, Herr Korski, epitomises the arrogance of the unelected Eurocrat: "Whatever the British Govt. wants moves are now afoot on the continent to address some of the structural problems of the Euro".

In other words, the democratically elected British Govt. counts for nought. That is what is wrong with the EU in a nutshell.

A later sentence, when you talk abt the
'German Finance Minister Wolfgang Shauble' betrays your habitual ignorance of what you profess to write about. The man's name is
Schauble, and he has been around for decades so you should be familiar with him..

Your views on all subjects on which you opine can therefore be safely discounted and ignored.

dorothy wilson

"Events, dear boy, events".

Whatever daft scheme the politicians come up with, it will be the markets that decide the fate of the euro. And the single currency will only survive whilst the German people and not just their politicians are prepared to accept the cost of the bail outs. Once they are pushed beyond the tipping point the euro will collapse.

It is to be hoped that the BoE and our Coalition Government have given at least some thought to that happening. My bet would be that it is inevitable - sooner or later.

exile on euro street

Vulture - it's Schäuble, don't forget the a-umlaut. But you're right, Danial Corsky should check his spelling.

Banker with a death grip

The bond market holds the national debts of Eurozone and other EU countries to a value which exceeds the strength of the collected Governments probably ten times over.

Any move to cross-guarantee or to dilute or haircut will fail, because the bond holders will claim this is a default and demand repayment. There simply is not enough capital under control of the various Governments to fight this.

The only way out is to split the euro into central and outer bands, or to scrap it. The latter route would be far less politically damaging than the media suggest as most of the good peoples of Europe recognise it has failed and caused their economies to tank, or to pay for the failures of others. It is tme for the politicians to catch up.