Euro Bankers Fly To Greece For Dramatic Emergency Meeting

[AllentownJake]

European Central Bank leaders are flying into Greece today as the debt crisis continues to escalate.

Jurgen Stark, an excutive board member of the ECB, started another scare this morning with his quote in the Italian newspaper Il Sole 24 Ore. “The markets are deluding themselves when they think at a certain point the other member states will put their hands on their wallets to save Greece,” he said.

This, coupled with already established fears on the issue of Greek fiscal security, led to a decline in the Euro in trading this morning.

Greece is now facing an evaluation by ECB leaders as to whether or not they can stay true to their deficit cutting measures aimed at keeping it within the Eurozone's strict budgetary guidelines. Debt markets are also being rattled by this escalation increasing the yield on Greece's ten year treasury bonds. Martin Tyler of the Financial Times added fuel to the fire in terms of Eurozone security today by emphasizing the hardships built into the Euro setup for smaller states and how their escape from these is vital for the Euro's long-term success.

http://www.businessinsider.com/euro-bankers-fly-in-to-fight-for-flailing-greece-2010-1

[RB TexLa]

1. The European Central Bank needs to be given more central power and take power away from the national

central banks to handle these things better.

[AllentownJake]

3. The only way that happens is a one continental federal state

with local states like the US. Hope they don't adopt an electoral college.

[RB TexLa]

7. The power can be given from the member nations by revising the EU charter.

[AllentownJake]

2. This is actually bigger news

with worse implications than the ADP jobs report.

Sigh

[Renew Deal]

4. Would this have happened if they never changed to the euro?

I wonder what the answer to that question is.

[AllentownJake]

5. Their currency would depreciate

They'd just print more money and monetize their debt....kind of like Great Britain and the United State is doing.

[Nikki Stone1]

6. "Will the Euro Become the Most Hated Currency for 2010?"

Re: Greece

http://www.moneyandmarkets.com/will-the-euro-become-the-most-hated-currency-for-2010-2-37172

For the better part of 2009 the U.S. dollar was the world’s most hated currency. But it’s looking increasingly likely the tables could turn in 2010. And the euro could take over that unenviable title.

In recent weeks we’ve seen a surge in scrutiny over sovereign debt. First, it was announced that Dubai would be “restructuring” its debt (i.e. default). And then the focus quickly turned toward the Eurozone’s weakest link — namely Greece.....

Flaws of the Euro …

Countries that have joined the euro currency have unique challenges when economic times are tough. And we’ll likely find that the range of problems within the Eurozone will present a major threat to the euro’s lifespan.

The monetary union in Europe consists of a common currency and a common monetary policy. But fiscal policy is determined by each individual country. And to patrol those fiscal decisions, the European Union established its Growth and Stability Pact that, among other things, sets two criteria for member countries:

1) Deficit spending by its member countries cannot exceed three percent of GDP, and

2) Total government debt cannot exceed 60 percent of GDP.

As you can see in my table below, those limitations have been completely ignored by the countries that are having the biggest financial problems, exposing the structural flaws of the monetary union …