Tuesday, December 06, 2011

More muddled mindsets on the Euro - Going MAD?

Bloomberg has an article which highlights more of the insanity now rampant across the EU, linked here, with a small quote:

To understand just how stupid this is, all you need to do is go back and read Michael Lewis’s Ireland article. The fateful decision in Ireland was to take the insolvent banks and give them a blanket bailout, with the banks’ creditors all getting 100 cents on the euro. That only served to put a positively evil debt burden onto the Irish people, forcing a massive austerity program and causing untold billions of euros in foregone growth, while bailing out lenders who deserved no such thing.
Are we really going to repeat — on a much larger scale — the very same mistake that Ireland made? Does no one in Europe realize that this is the single worst thing they can do?

Acting Man blog has more succinct comment on the week ahead for the Euro, as usual, linked here. Naturally enough, this blog particularly approved of this paragraph from that posting:

What is however credible is that if the euro-group summit produces some tangible result toward 'fiscal union' (a.k.a. 'FU'), we can expect the monetary bureaucracy to become more inclined to pump. As the gentlemen from Credit Agricole correctly remark, it is quite questionable how long it would take to implement the changes to the European treaties this would no doubt require. In fact, it is questionable if the implementation of such changes can be unconditionally promised by the euro-group heads of state – after all, everything they decide upon will once again have to be ratified by the national parliaments and there can be no guarantee that all 17 euro-group parliaments will agree to voluntarily surrender their fiscal sovereignty to the EU's central bureaucracy.

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