Im sure Ireland will suitably use this opportunity to ensure the bond holders take a haircut on their debt aswell.

The single currency lost almost 3% of its value against the dollar in 2011, and hit a 10-year low against the yen at the close of trading on Friday, amid persistent concerns about its future.

You might have noticed that it's holding steady against the pound that is still 30% down against the euro.

The Germans/Brussels/IMF trio are neo-liberal ideologues inflicting tremendous damage to many of the EMU member nations.

Their policies are creating more unemployed, more poor, shrinking economies, economic emigration, declining government revenues and larger deficits. They are not only failing to spur growth, they are making the debt crisis larger and frankly, impossible for countries such as Greece to honour it's external debt obligations.
They are also not producing the much coveted budget surpluses.

They will not accept reality so it is completely predictable that their next steps will also fail to achieve any of the stated goals. That is precisely why they have not solved this mess in going on 4 years now even though after each agreement the trio made they forecasted success. Ask Ireland what it is like to surrender their lives to the mindless ideologues of the IMF.

The Germans even deny the reality of their latest bund offering being under subscribed.

The construction of the Euro is flawed, the trio will not allow the ECB to solve the issue, so as sure as the sun rising tomorrow there will be another meeting / agreement / dictate coming after this one fails.

Greece and the others should abandon the Euro, regain their currency sovereignty, restructure their external obligations and use the intrinsic power of their fiat currency to spur domestic economic growth.
They need to free themselves from the clutches of the unelected Germans/IMF/Brussel trio and their disastrous neo-liberal economic policies.

Even Der Spiegel finally has an article on the delusions of the Eurozone politicians and the economic reality.

www.spiegel.de/international/europe/0,1518,806469,00.html

That's why our exports are cheap and we aren't doing so badly...the Euro is too strong for most Eurozone countries.

I assume they have already broken their New Years's resolution to stop printing money?

Here in Italy the bansk are not considered to be in crisis.
I have not seen any public money being pumped into the banks. Admittedly, there may have been other means used to support them. French banks, on the other hand....
People seem to think that profiteering is leading to the crisis and that the new government is a front for bankers.
They also blame Merkozy for doing well out of the weak euro and now not helping their 'partners'.
I hear more and more people saying the euro was a mistake.
Italian spending power has dropped 40% since the euro came in.
I doubt the euro will surive in it's current form as these austerity packages will drive ordinary people to desperate measures.

your comment is asinine, the euro is over valued which is why greece and the likes are in the crap.

Merkel used a new year television message to tell German voters:
"The path to overcoming this won't be without setbacks..."

Presumably she also told them to watch out for the shit falling from the pigs flying overhead.

At the same time, Europe's leaders hope that the IMF, with the help of developing nations such as Brazil, will reassure financial markets by offering more resources to back future bailouts of indebted member countries.

Pardon? So now you're asking the developing nations to pay your bills and keep this frantic show running for a couple more months. How merciful of you.

You can't be both a leader and hope someone else comes and helps you. These things are mutually exclusive.

Bunch of clowns - the lot of them.

One week to save the Euro!!!

Again

>>You might have noticed that it's holding steady against the pound that is still 30% down against the euro.

Exactly what the doctor ordered and what the PIIGS would like to do...QE, devaluation, cheap exports, expensive imports and reduced value of the debt in the currency it is denominated in (in this case £). And your point is?

>>Here in Italy the bansk are not considered to be in crisis.

If that is the case then why are the shares in Unicredit (for example) down 89% in 5 years and 55% on the year?

They have not got a snowballs chance in hell of sustaining the Euro...

They are deluding themselves...

Many of the PIGS will be forced to leave as the decline in their economies, require improvements in GDP the policies being forced on them will cause severe recession and kill thousands...

Since when does democracy require un-elected 'functionarios' to run countries?

John Szepietowski

The answer, as it has been all along, is for Germany (and perhaps Holland and Finland) to leave the Euro and let the others sink to the level that their fiscal incompetence and meddling warrants.

That's what I don't understand. From the way people are speaking here:
Euro weak >> a bad thing
Euro strong >> a bad thing
Anyway, unlike Germany, countries like Greece have many other things to worry about, other than exports (they will have to find out something valuable, other than olive oil, to export in the first place, hope that their energy projects are going well)
On the subject of the Spiegel that you've mentioned, they usually present multiple points of view, you make it look like if it's Brit press, it has to be anti-EU and if it's German, it has to be pro-EUl. I've seen der Spiegel's anti-Euro articles, just like here The Guardian sometimes has pro-Eu articles too. On the article itself, first, it fails to present important statistics that explain why there won't be enough time, second, they could've at least quoted the opinions of someone reliable, like Reichenbach and his team, who are helping the Greeks to reform their country, or this guy http://www.greekdefaultwatch.com/. Instead, they bash politicians with the opinions of politician from the opposition party!

Last para:
"He predicted that eurozone governments would eventually have to write off a large proportion of the debts of several countries, including Greece and Italy, and bail out their crisis-hit banks".

This can only be done through the ratification by individual member parliaments. And thats just not going to happen unless Sarkozy and Merkel and their home country supporters want to commit political suicide.

The ultimate choice with be this:

1. The non-Eurozone members of the EU will firewall themselves against the Euro. (already happening)
2. The ECB with freeze the Euro exchange rate. (They are close already)
3. The PIGS will be allowed to default.
4. The EU will become a terminology, not a fiscal union. (a present day reality).
5. The rest of the world will just get on with life, as it doesn't really matter. The new money engine room of the world will be Asia. (been happening all along)

This article is not precisely misleading but it diverts attention from the real dynamic that is exercising minds in London.

We want Europe to print its way out of trouble because, whilst the people may suffer, it will preserve the Anglo-American economic system. Europe has Greens with political power, Germanyhas social equity entrenched in domestic legislation and it has EU law all of which militate against the solution we want.

If Europe does what we want our form of capitalism will survive; if it does not I expect its curtains for our banks. But look on the bright side. Whilst the national economy will shrink, it will emerge broader and stronger than it has been for forty years.

The euro has fallen against the pound. Not long ago the rate was 1.11 and it's now 1.2

On the subject of the Spiegel that you've mentioned, they usually present multiple points of view

Yes, Spiegel is well worth reading regularly on this subject for the variety of German viewpoints they present (though not necessarily on the same day, of course).

Particularly interesting for British readers are German scepticism, which manifests itself in rather different guises, and no-holds-barred USE fandom of a kind which is not serious politics in the UK.

The simplistic 'Brits v Europeans' dichotomy is rubbish, of course. It is excellent that we now have easy access to each other's newspapers, because cross-border understanding of the political and ideological pressures operating on European leaders is generally very poor.

"This strategy , the muddling through strategy, is one that can buy another few months, maybe even a year, but it's not a solution."

Muddling through is not such a bad strategy when you do not have a clear-cut instant solution. And nobody does. Of course everybody, every expert who is not in a position of power has the perfect solution i.e. people who do not have to find their way through an immensely difficult obstacle course. The market experts especially trot out solutions which coincidentally happen to be favourable to their clients or ideology. They often contradict each other and even themselves from week to week. They can be, as Olivier Blanchard said last week, scizophrenic.

So when you are operating in the dark and nobody has a searchlight, it is prudent to take small, slow steps forward, changing direction if one meets up with an insurmountable obstacle. That is better than charging headlong into a disaster from which there may be no retreat.

Of course, muddling through may lead to disaster anyway, but for the next six months anyway, any other course seems fraught with even greater danger. This is one of those times when there are no good choices.

We who will blink first Merkel or the Bond holders ......

Until they push out Greece and the other basket cases, they are just fooling themselves. If they don't they will be mortgaging their grand children's children. When Italy and Spain come back for more bail outs they will be forced to eat humble pie.

@wakeuptheworld

When Italy and Spain come back for more bail outs they will be forced to eat humble pie.

But Italy and Spain have not had any bail-outs to date. Nor will they as neither the EU nor the IMF have the resources to do for Spain and Italy what they have done for Greece, Ireland and Portugal. Many people seem to think that the ECB has the resources, at least potentially, However, the ECB, rightly, refuses to act as lender of last resort to sovereign states. If they did, it would probably be the first step in its own destruction.

As for pushing out Greece and the other "basket cases", this would probably precipitate a pan-European meltdown of the entire financial system (leaving aside the fact that there is no legal mechanism to push out any Euro-member state).

Solutions are easy and instant on CiF. In the real world, matters are a good deal more complex.

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There is one thing that Europe's leaders have to deal with. It's the insane Article 123 of the Lisbon Treaty that prevents Central Banks lending to governments. Instead, we have to see the fiasco of Mario Draghi, head of the ECB, printing 489 billion euros and handing it to 526 european banks in a feeding frenzy lasting one hour on the morning of the 21st December. The hope was that the banks might take on some sovereign debt, and help countries like Greece and Portugal who are currently being strangled by the bond markets, who are charging rates of around 18% and 12%. But no, what have the banks done with the money? Most of it (412 billion euros) has been parked back with the ECB who pay just 0.25% interest.

There is simply no way that politicians can trust the free markets to do what is useful.

The obvious solution - revising the Lisbon treaty to remove article 123 - has been made impossible by the fact that David Cameron has vetoed any chance of modification. He must like the current idiotic situation where his mates in the City can get hold of 489 billion euros of ECB money for 1% interest, or 75 billion pounds of QE from the Bank of England - all with no strings attached. That's all money that should be going where it is needed - not to pay bank bonuses (or whatever).

I can see only one way out. The ECB has to print/lend money to specific banks and credit institutions that are then obliged to lend the money to countries like Greece at the same rate (1%) that the banks are given. The Greeks (and any other country that is being ripped off by the loan shark bond markets) could be required to introduce a variable rate Financial Transaction Tax whose entire purpose would be to pay back the ECB over a fixed period with interest. Actually, the second paragraph of Article 123 even seems to make this option a real possibility :

2. Paragraph 1 shall not apply to publicly owned credit institutions which, in the context of the supply of reserves by central banks, shall be given the same treatment by national central banks and the European Central Bank as private credit institutions.

As long as ECB printed money is only used to pay off government debt, even the Germans should be happy.

Simon.
Interesting point about article 123 - but this will not address the fundamental flaws within the EZ.
The imbalances within the members of the EZ mean that for a single currency to survive then the 17 must become 1, and fiscal transfers from north to south in perpetuity.
Full political and fiscal union of the 17 cannot be achieved via the ballot box, and the Euroloons know this.
I believe that this crisis is being orchestrated by the Euroloons in order for them to achieve their objectives. The peace, prosperity and future prospects of the people of europe are being sacrificed for the "greater good" of Euroloon ideology.
The Euroloons want control of 500 million disenfranchised europeans, they want to rule them by diktat - without the need for democratic legitimacy.
The Frankfurt group is calling the shots, and the Euroloons of Brussels are planning their coup even as we speak.
This has been their dream for 60 years, and be under no illusions - being outside the EZ but within the EU is no defence against a life of servitude and oppression.

How you view the Euro depends on which side of the fence you live on. When the Euro started (1st Jan 2002) you would have got 1.64 Euros to the UK Pound. It was 1.19 at close of trading.

"The euro is the second largest reserve currency as well as the second most traded currency in the world after the United States dollar. As of July 2011, with nearly €890 billion in circulation, the euro has the highest combined value of banknotes and coins in circulation in the world, having surpassed the U.S. dollar."

The Eurozone inflation rate has risen and now sits at 3.0% (15/12/2011) the UK at The UK at 4.8% (13/12/2011) and the US 3.4% (16/12/2011).

Prior to the world wide 'financial crisis' the Euros was sitting at just under 1.5 to the pound.

Many people outside of the UK see the pound (and the US dollar) being weak against the Euro rather than the Euro getting stronger. When the exchange rate goes above the 1.64 then there is a problem but that's not likely to happen because both the pound and dollar are so weak.

Cameron is right in what he says. If the Euro ever collapsed the biggest losers would be the UK and US financial institutions. That is why it cannot be allowed to fail and why it won't fail.

the euro is over valued

Why do the markets (which seem to be deemed so correct when attacking the Euro fo all its ills/vanity project provenance) get it wrong when it comes to the value of the Euro?

The euro has fallen against the pound. Not long ago the rate was 1.11 and it's now 1.2

and a couple of years ago it was 1.50.

Cavirac,
To ensure the survival of the Euro the sovereignty of firstly the EZ 17 and then the EU 27 must be surrendered.
Only the Lib Dems in the UK would do this immediately, with no questions asked.
What you have to envision is the set of circumstances that would force the Westminster parties to abandon democracy, handing all powers to Brussels.
I believe that this set of circumstances will come to pass, the plotting of the Frankfurt group and the Euroloons will see to it.
We are at the endgame of a process 60 years in the making - and we will not be consulted about our futures, the Euroloon elites are very close to achieving their goals now - they will not want their grand ambitions thwarted by something as prosaic as democracy.

The Euro is impossible to value at the moment.
For its survival, democracy has to die.
Or it could break up in an orderly fashion.
Or it could explode.
The value of the Euro will be determined by events in the next few months.

Euroloons

There seems to be a sharp distinction between the precision of your argument and your use of the invented word "Euroloons". I assume it's a word of your coining.

Please define it.

...or perhaps we could use the word "loonsharks" to describe the markets?

The imbalances within the members of the EZ mean that for a single currency to survive then the 17 must become 1, and fiscal transfers from north to south in perpetuity.

The imbalances within the members of the UK mean that for a single currency to survive then the 3 must become 1, and fiscal transfers from south to north in perpetuity?

Merkel used a new year television message to tell German voters:
"The path to overcoming this won't be without setbacks..."

No, actually I think she really meant it. One of the setbacks is going to be the weaker peripherals leaving the Euro. Germany is still refusing to even consider the idea of a debt union or flows of money from strong to weak therefore massive austerity is the only option. Greece will implode if this is allowed to become a permanent state so it will be encouraged to leave maybe along with Ireland and Italy, maybe Spain and Portugal and who knows who else.

the sovereignty of firstly the EZ 17

What is sovereignty? Can you eat it?

Ealish.
1) The fiscal tranfers between regions of the UK are only possible because the regions of the UK have political union.
2) Sovereignty refers to the ability of a nation to make its own decisions, in the west this is done via a democratic process.
3) A Euroloon is a dangerous type of human, 60 years in the making. There are a type of person who wants to re-order Europe as they see fit. They are fanatical in their belief that they, and only they, can offer a future to Europe. They do not believe that normal people have the capacity to live their own lives without guidance and instruction. They are akin to religious fanactic groups, their religion is control of 500 million europeans, by any and all means necessary.
Euro (from the word european) and loon (an accurate description of their mental state).
They are predominantly found in Brussels, and are unelected bureaucrats, financiers and technocrats. They have a club called the Frankfurt Group, and have recently started overthrowing elected governments.
They are quite rare in the UK, but can be found in 3 organisations in significant numbers - the BBC, the Graun, and the Lib Dems.

Well,European countries are very happy not to have UK part of the Euro,as the entire system would have collapsed.England has by far the highest amount of public and private debts,the biggest public deficit and an economy is a terrible shape with high inflation and unemployment.This quagmire part of Euro would have destroyed the machine as no one has enough money to save this country.The situation of Greece,Italy and Spain is nothing compared to the one in the UK.
But you , I must recognize that you are the world champions in telling others what to do!

I don't know about there being a crisis, but according to the last stress tests,

Greeks banks need(ed) €30 billion
Spanish banks need(ed) €26.2 billion
Italian banks need(ed) €15.4 billion
German banks need(ed) €13.1 billion
French banks need(ed) €7.3 billion
Portuguese banks need(ed) €6.95 billion

http://www.ft.com/cms/s/0/a8df5550-21c3-11e1-8b93-00144feabdc0.html#axzz1iCS4jI8D

valbonne.
Agreed - the total debts of the UK are shocking, and will require my country to take a long hard look at itself and take decisions that have been put off for decades as politically unpalatable.
I also agree with you that watching my political leaders go around the world pontificating to countries can be quite sickening.
I wish though, that some of the constructive comments ( as opposed to the many ridiculous ones) that came from the UK during the Maastricht process had been heeded.
This is why I am of the opinion that this crisis with the Euro was intentional - it was predicted. What I am questioning is the motivations of the people who have engineered this crisis, I describe them as Euroloons, and I believe that they have an agenda that they are working to finishing, to the detriment of all the people of europe.

England has by far the highest amount of public and private debts

Surely you mean the UK and not simply England, or maybe you are another poster who thinks England = UK?

Sovereignty refers to the ability of a nation to make its own decisions, in the west this is done via a democratic process.

Recent events have shown that democracy in its current form is incapable of defending itself against the markets. The question is will democracy change or will the markets change?

unelected bureaucrats, financiers and technocrats

Like Whitehall and the City?

A Euroloon is a dangerous type of human

Do you know any personally? If yes, who are they and what have they done? Please refer to reputable sources. Otherwise it seems you are inventing the term and then fitting the situation to it.

A friend of Garibaldi's used to say that reciprocal fear ruled the world. Garibaldi said that the least frightened populace is also the least oppressed. (ISBN 1-84391-093-4). What are you so frightened of?

Regimes uphold sovereignty so they can draft young men into their army. It's all about population control. Not about the individual.

England has by far the highest amount of public and private debts
Surely you mean the UK and not simply England, or maybe you are another poster who thinks England = UK?

Precisely. Let's not forget it was that great Scottish institution, The Royal Bank of Scotland, which nearly did for the whole of the UK economy.

Were those stress tests applied to UK banks (just for shiggles, you know)

The only people who should be criticized for using England to mean UK are the English. "England" has done a very good job over the years of absorbing credit from the other members of the UK. Nigel Mansell is English. Andy Murray is British.

Ealish.
The power rests within the democratic process, there has been a failure of politicians to regulate and control financial markets - but I believe that this will be remedied over time.
Your reference to Garibaldi is useful - as it highlights the tactics that will be used in the coming months to rid Euope of democracy, and replace it with unelected bureaucrats who want to re-order Europe in their image.
And seeing as they are 1) European and 2) fanatical lunatics I will refer to them as Euroloons.

Judging by his/her moniker, Valbonne is probably French.

And the French have very approximate ideas - most of them seemingly formed by reading old copies of Asterix - of everything and everyone outside France.

Politicians, journalists et al think England and Britain are interchangeable, that all inhabitants of the UK are English - I thought Brown was going to thump Sarko at one memorable press conference when the wee man called him 'le premier ministre anglais'.

Other fondly held ideas emerging from recent French media stories are that the Netherlands should be called Holland (and its inhabitants 'les Battaves'; the Italians are 'les Transalpins')), Mumbai is still called Bombay, Rio is still the capital of Brazil and (cont'd p.94)...

And don't get me started on the French use of 'les anglo-saxons' - the fashionable racist insult of the French Left. Even their own dictionaries can't agree on the meaning: is it synonymous with anglophones, meaning all English speakers; restricted to British and Americans; does it include Commonwealth countries like Australia, and if so, Jamaica and Zimbabwe? When I ask French friends whether they would class the blues, jazz and Bob Marley as Anglo-saxon culture, they tend to get very tetchy..

It has been obvious for some months now that we 'swivel-eyed, little-englander, xenophopic, europhobes' were right all along.

One awaits with joy the forthcoming demise of the Eurozone as currently constructed and the unraveling of the 'EU Project' of "ever closer union".

Shares in Humble Pie to skyrocket!