To all European Fiefs and Vassals:
Beware if you breach the Limit: budget deficits cannot exceed 3% of GDP.
To foreign (?) sovereign currency issuers: Don't meddle! or else.
Kingdom of Europe
Merkel-Sarkozy (random order :)Date:
Today's announcement foretells the coming of the Kingdom of Europe. One wonders who the terrible duo are and what legitimacy founds their pretension. Wonder! were the United States to voice such a position. European sovereign issuers or any sovereign issuer. Is this History or the loud boast that speaks the vacant mind...the boast of a florid vigor not their own! Now let's put your money where your mouth is- does the ECB-Draghi print money or not? Does it keep on lending and purchasing bonds?
The United States Secretary of the Treasury Geithner will certainly go back to Europe soon in order to ensure mutual understandings of the intent.
Heaven spare the democracies. Oliver Goldsmith's The Deserted Village is worth the read.
Nice touch with Goldsmith. Just to mention that the US Treasury have had their people in Germany for months and weeks. Do you think that Europe can manage something like this. They haven't seen the likes of this anywhere in their history. I actually appreciate the medieval paradigm you're setting. How will Cameron react now?
ReplyDeleteA delphic post. Haven't seen these types of posts in a while. Usually one gets meticulous and technical chatter. I guess Mr. Cameron is gone home. How will he fare? The real issue is how will Mrs. Merkel and M. Sarkozy fare.
ReplyDelete@swells-they haven't seen anything like this. Cadets on open sea with a squall on starboard. Is Mr. Cameron veering portside?
Count me in, GC. I never thought I would see anything like this. I used to read Alain Parguez, circuiste par excellence, on the Euro and wonder if what he wrote on the subject wasn't a tad over the top. IMO, this is worst than what he, W. Godley and C. Goodhart could have imagined. From where I sit every day, I can see the squall coming through the fog. I hope the instruments are reliable.
ReplyDelete@Goffredo. Mr. Cameron will benefit with political clout. It will certainly enable him to slowdown austerity measures in an attempt to find optional venues that are more conciliatory with the unemployment problem that is ravaging the UK.
ReplyDeleteI think Merkel/Sarkozy will lose enormous political clout, domestically and internationally. The latter may well concede his office. Since the downgrades have probably been discounted in the markets, there is little that can be said or done to appease a growing sense that the summit reflected more a menu of platitudes than a decent course of constructive economic policy.
@circuit...great pleasure for your comment. I think that France's two recessions since 2007: negative growths in subsequent quarters of 2008 and 2009-10 demonstrate what the ECB working paper you cited concludes: french economic policy is not appropriate for this setting.