After a weekend of Je suis Charlie the Euro elite must now revert
to their real role of proper Charlies to face up to the Euro mess .Should they
print Euros by the billion? Can they? Will they? Or will they just try to get
through with more extruded Euro fudge?
Germany wants the Euro to work because it keeps their exchange
rate lower than it would be if they didn't have other currencies to hold it
down like guy ropes from the heights to which Germany's big trade surplus would
push it. But they don't want to pay for it. They've already paid the huge cost
of integrating East Germany with the west and the cost of financing the weaker
economies of Greece, and the other Club Med countries which they regard as lazy
corrupt and in need of a bit of Deutsch discipline would be far far higher.
So they insist that the layabout countries make themselves fit
for the euro by deflation and cuts. These produce pain and unemployment and
have turned the Euro into the world's low growth high unemployment black spot
Draghi and the European Bank have managed to prevent collapse by
promising to do "what it takes" and talking of printing money by a
big dollop of quantitive easing as the US and UK have done. Now the situations
still deteriorating they have to put
their money where their mouth is. But can they print to float the Euro off the
rocks?
The Germans don't like the idea even though it will bring the a
euro down further. Their constitutional court has referred the issue to the
European court .Now that court must
decide whether the constitution gives the ECB the right to print money
by buying back public debt-including presumably Greek public debt which will
never be paid back anyway
If the court says no then the Germans will have to throw good
money after bad by loaning more for the Greeks not to pay back. Or we'll see a
Greek default and departure. Life's never boring in the Euro madhouse. Facile
descencis Avernis.Via the Euro.
No comments:
Post a Comment