Euro Area Financial Crisis Inevitable?

[drkitten]

Where did he say EU?

In the thread title itself. Looks like the goalpost moving was done by the jingoistic 'tard who can't tell the difference between France and Croatia.

 

[Emperor_Gestahl]

drkitten, were you aware that individual central banks could still print Euros? I had been led to believe that in the EU monetary zone nations gave up that power.

 

[drkitten]

drkitten, were you aware that individual central banks could still print Euros? I had been led to believe that in the EU monetary zone nations gave up that power.

I was not aware of that, nor am I aware of that now; I haven't investigated the question.

 

[Emperor_Gestahl]

Linked this a few posts ago, found it surprising:

http://www.independent.ie/business/...y-institution-printing-own-money-2497212.html

 

[Puppycow]

I think it's about time to update this thread.

IMF Believes Greece Should Consider Debt Restructuring By 2012

WASHINGTON -- The International Monetary Fund believes Greece's debt is unsustainable and has told European government and central bank officials that Athens should consider restructuring by next year, three people familiar with the situation said Saturday.

"The IMF believes the debt situation in Greece is unsustainable," one of those people, who has direct knowledge of the matter, told Dow Jones Newswires. "Senior (IMF) officials have told the parties involved that restructuring should be considered soon," including the European Commission and euro-zone governments.

Officially this is all being denied of course because even talking about it makes it more likely to happen sooner rather than later, but signs are that it is heading in that direction.

 

[Francesca R]

Greek 2 year yields would not be trading at 20% (which they are today) if this was not already expected to a meaningful extent. Moreover this has happened despite Greece not actually having borrowed anything directly from the market for a year (it borrows from the IMF/EU stabilisation fund at 5.5%) and despite the ECB being a net buyer of already-issued Greek debt.

The alternative to default is some kind of fiscal transfer from the rich states to the troubled ones. That is more orderly but a harder political sell. Which of the two options would inflict the most damage on the other countries is not obvious.