Saturday 17 September 2011

Eurozone blues

Who is going to be the Herostratus of the eurozone? Many are in the running if we try to follow events.

In the column Public debt in the Eurozone, Japan, and the US, professor Charles Wyplosz presented a report about the ease of accumulating excessive public debt and the difficulties in getting rid of it.

In the Financial Times, Martin Wolf wrote that the failure of Germany's leaders to explain the basic facts (deficiencies) of the eurozone makes it impossible to solve the current crisis. Germany must make the choice between a different eurozone or no eurozone. In the meantime, the ECB should act to prevent meltdown: Time for Germany to make its fateful choice.

At the US Council on Foreign Relations (CFR), Christopher Alessi presented the downgrading of French banks, their share prices being hit, the upcoming trip by US Treasury secretary Timothy Geithner to meet the eurozone finance ministers, worries about European banks generally and the probable lack of coordinated global responses, different views from both shores of the Atlantic and discordant views within the German coalition government. A banking crisis was close, according to some observers. The article offers helpful links to the stories: The Gathering Eurozone Storm.

Professor Hans-Joachim Voth wrote an overview of the European cacaphony for CNN, reminding readers that a rescue in exchange for collateral is not much of a rescue at all. In addition to Finland, other smaller eurozone countries are getting restless and disillusioned: Will the Austrians, Slovaks or Dutch break the euro?

Saturday evening eurozone blues for you.

Ralf Grahn

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