Yesterday, chancellor Angela Merkel noted how closely the break down of the euro was related to the fate of the whole European project:
Scheitert der Euro, steht das europäische Projekt insgesamt auf dem Spiel.
(Merkel's full ”Stabilitätsunion” speech in Magdeburg.)
The Financial Times tells us that the German Bundesbank opposes ECB bond buying (22 August), still. Spiegel Online International reports that president Christian Wulff has joined the prominent opponents in Germany: German President Questions Legality of ECB Bond Purchases (24 August 2011).
For good measure, the German Bundesbank criticised the decisions of the 21 July 2011 eurozone summit on the second Greek bail-out and the added flexibility of the EFSF, as well.
In the context of the second bail-out of Greece, in the blog post Eurozone issues collateral and honesty (24 August), we saw the eurozone summit statement and the following deal on collateral between Finland and Greece. The eurozone partners did not warm to footing the bill, but for the government of Finland it remained a question of how, not if, collateral will be given.
Peter Spiegel on the FT Brussels blog continued by asking [UPDATED] Will Finland sink the Greek bail-out? (24 August). Markets and market watchers were becoming jittery.
The Open Europe blog looked at positions taken by leading politicians, country by country: Collateral Thinking (24 August 2011).
(By the way, the populist True Finns (Perussuomalaiset) have just decided to call themselves The Finns in English.)
Ruth Berschens in Handelsblatt tells us today that the collateral for Finland is off the table. The headline sounds conclusive: Sicherheitspfand für Finnland ist vom Tisch (25 August). However, the euro area governments seem to be discussing real estate as collateral.
If they reach no positive outcome, the Greek bail-out may unravel, and with it the eurozone as we know it.
We could then be left wondering if the eurozone broke up and the EU declined through friendly fire or as collateral damage.
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