Europe's Single Debt Zone

[futurebeachbum]

Article on the WSJ called Europe's Single Debt Zone.

Basically, the fiscally prudent countries are being punished for their prudence by having to bail out the imprudent ones.

Taxpayers from the more fiscally responsible countries, particularly Germany, will be on the hook for the budget failures of Greece, Ireland and any other country that may still require saving. This violation of the euro zone's own rules forbidding bailouts is not likely to improve fiscal discipline in those countries traditionally lacking it.

More importantly, they are now insuring speculators against loss for at least 3 years. This is mind boggling. Speculation has a lot to do with the problem.

So here is what the EU has done: In the name of combating speculation against the debt of euro-zone members, the EU has now insured all those speculators against loss for three years at least. Meanwhile, in creating a permanent crisis-management mechanism, the EU has succeeded only in making permanent crisis more likely.

Its going to be interesting to see how long the Euro lasts once the Germans get tired of being screwed.

 

[scooterbug44]

I was channel surfing and caught a clip of some (British?) guy making a fiery speech about how these countries had pushed for the Euro despite issues and now that the chickens were coming home to roost they were still clinging to it - to the detriment of all.