Leaders Piece Together an Effort to Keep the Euro Intact

[alp227]

Source: NYT

European leaders are working overtime on a tentative deal to try to save the euro, which they hope to complete at a crucial summit meeting in Brussels this week. But rather than one transformative leap, the deal will have several moving parts, together meant to show resolve to protect Italy and Spain, revise the economic governance of the euro zone and prevent further debt crises, officials involved in the talks say.

The emerging solution is being negotiated under great pressure from the markets, the banks, the voters and the Obama administration, which wants an end to the uncertainty about the euro that is dragging down the global economy.

In the process, European leaders will begin to change the fundamental structure of the union, creating a form of centralized oversight of national budgets, with sanctions for the profligate, to reassure investors that this kind of sovereign-debt crisis is finally being managed and should not happen again.

The immediate focus of worry is on Italy and Spain, which have been buffeted by market speculation even as they move to fix their economies. That process took an important step on Sunday, as Italy’s cabinet agreed to a package of austerity measures to put the country in line for aid that would improve its financial stability.

Read more: http://www.nytimes.com/2011/12/05/world/europe/leaders-struggle-for-deal-to-keep-euro-intact.html?pagewanted=all

[DallasNE]

1. Centralized Oversight

Of national budgets is desirable but that would not have stopped the current problem that has as its core the toxic sub-prime loans originated in America and sold around the world. What was and continues to be missing is a robust set of regulations that prohibit bundling of toxic assets in with good sound assets plus requirements for full transparency.

[CoffeeCat]

2. I'm still trying to figure out all of this...

...but it seems to me that the banks have behaved in horrendously criminal ways. They
used mortgages to create mortgage-backed securities that were full of mortgages that
defaulted. Those mortgage-backed securities (that they made trillions from) were now
worthless and spread all over the financial world.

So...to solve the problem--they got trillions in taxpayer bailouts.

Now, Europe finds itself in a similar position--with tons of these defunct securities
all over their books--like a bad disease infecting all financial sectors.

Their solution is to centralize and to get bailed out--and essentially all European
countries under control of the IMF.

Does anyone sense that the SOLUTIONS to the problem are really not about solving
the bad mortgage-backed securities that are rotting the financial system---and more
about enriching the bankers with OUR money and creating a big, global monetary system
that gives even more power to these "too big to fail" criminal enterprises like Goldman,
B of A, etc.?

There really is no solution that wipes out that bad debt and makes the system healthy. You'd
have to nuke these big banks from orbit, to accomplish that.

Seems to me--these banks are moving the puzzle pieces where they want them to be--and using
financial crises as a cover to make these moves.

Am I way off? Thoughts anyone?