Godwynn
March to the Sea
- Joined
- May 17, 2003
- Messages
- 20,502
I first laughed at the idea back in December of 2008.
Saxo Bank, who cares about them right?
I was cruising Bloomberg and to my horror...
In this week's issue of The Economist it delves further into the issue.
Will the European Union look to the Germans to save them?
Will the Germans offer their hand? Will they renounce the Euro? Bring back the Deutsche-Mark?
yikes
Saxo Bank, who cares about them right?
I was cruising Bloomberg and to my horror...
Hayman Advisors LP, the firm that earned $500 million betting on the U.S. subprime mortgage-market collapse, says Europes monetary union is about to fall apart.
Richard Howard, a managing director for global markets at Dallas-based Hayman, said Germany may opt to shore up its own economy, Europes biggest, rather than bail out fellow euro nations such as Austria, Italy and Spain as their banks sag under the weight of bad debts. That might lead to defaults and compel Germany to renounce the euro, he said.
In this week's issue of The Economist it delves further into the issue.
Yet if a country such as Hungary or one of the Baltic three went under, west Europeans would be among the first to suffer (see article). Banks from Austria, Italy and Sweden, which have invested and lent heavily in eastern Europe, would see catastrophic losses if the value of their assets shrivelled. The strain of default, combined with atavistic protectionist instincts coming to the fore all over Europe, could easily unravel the EUs proudest achievement, its single market.
Indeed, collapse in the east would quickly raise questions about the future of the EU itself. It would destabilise the eurofor some euro members, such as Ireland and Greece, are not in much better shape than eastern Europe. And it would spell doom for any chance of further enlarging the EU, raising new doubts about the future prospects of the western Balkans, Turkey and several countries from the former Soviet Union.
Will the European Union look to the Germans to save them?
Its place on the map once worried its generals. Now Germany feels encircled by economic menace. To the east lie ex-communist economies suffering from tumbling currencies and a drying-up of foreign capital. To the south and west are countries that are in the euro but have kept their profligate ways. Their cost of borrowing has shot up, stirring fears of default. Some now talk of a possible break-up of the euro area.
At times like these people turn to Germany, the biggest and most creditworthy economy in Europe. Austria, where the banks have risked more than most in eastern Europe, wants the European Union to provide 150 billion ($191 billion) of aid, part of it to countries that are not even members of the EU. Robert Zoellick, president of the World Bank, thinks east European banks need 120 billion of fresh capital, much of which may have to come from western Europe. The clamour for assistance to weaker countries in the euro is almost as loud.
Will the Germans offer their hand? Will they renounce the Euro? Bring back the Deutsche-Mark?
yikes