Re: Re: Demise of the Euro closer? – Ignore this if it bores you


A very interesting article in Der Spiegel, which may indicate the way things progress

Merkel is determined to reject both Hollande’s call for euro bonds and his proposal to allow direct lending by the ECB. The monetary watchdogs, she argues, would already do everything necessary to stabilize the euro, and thus preserve their high-paying jobs in Frankfurt’s Euro Tower.

There is something to this. The ECB has signaled internally that, if it becomes necessary (if Greece withdraws from the euro, for example), it will buy up the bonds of other ailing countries once again. With a view toward Hollande’s calls for more growth incentives, the Germans, for their part, are trying to seem more conciliatory. They are prepared to increase the capital of the European Investment Bank (EIB) to €10 billion, which would bring Germany’s share to €1.6 billion.

They also want to yield to the French drive to use the money in the European Structural Funds in a more growth-friendly manner and float so-called project bonds. This would involve the EU countries and private investors raising funds together to pay for things like cross-border infrastructure projects. Merkel isn’t hostile to the idea.