City hopes of the fragmentation of the eurozone seem to be fading fast: enter the great sterling crisis.

Dionysios (Dennis) Kefalakos

New Europe

13th February, 2011

During the last EU Summit of 4 February, France and Germany presented their plan to settle Eurozone’s long term financial problems. The “package” is meant to drastically reduce the large discrepancies that exist in the fiscal and the competitiveness fronts, between the seventeen Eurozone member states, make the zone cohesive in the long run and guarantee its creditworthiness. As it has already left to be understood by Paris and Berlin some three weeks ago, the short term Eurozone problems, stemming mainly from the Greek woes, are also to be settled with carrot and stick. The carrot is the support to reduce this country’s state debt, and the stick being the introductions of rules making impossible for all future governments to run unsustainable budget deficits. Let’s take one thing at a time.

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Spiegel

24th January, 2011

Despite public denials, euro zone governments are currently working on a proposal to relieve Greek bond debt. The proposal has a number of advantages for all countries involved, but it also entails risks that may be insurmountable. Some believe regulatory pressure will be required to force banks to take voluntary losses on their loans to Athens.

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German Chancellor Angela Merkel yesterday ruled out a return to the deutschmark.

January 20, 2011

Christoph Schennicke

Spiegel

18th January, 2011

Part 2- part 1 here

Why is Germany, the supposedly fallen superstar, in such good shape in the biggest economic crisis of the postwar era? Because it has maintained a more resilient industrial mix and prepared itself more effectively for the future than the Anglo-Saxon model, which had established the fashion trends of the last 30 years and had looked down on Germany with a mixture of pity and arrogance. Because smokestacks continue to belch smoke and assembly lines continue to run in Germany, and because Germany makes real products instead of packaging financial products until they are no longer recognizable.

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The Asian nation pledges to buy billions of dollars’ worth of bonds in European Union governments to restore confidence in the debt-ridden region. The EU is China’s biggest trading partner.

15-1-2011

LAtimes

Growing into its role as a global economic power, China is pledging to buy billions of dollars’ worth of bonds in European governments to help restore confidence in the debt-ridden region.

The move is the latest evidence that the giant Asian nation is developing ties with strategically important trading partners and expanding its influence in areas where it has long played a minor role. Read the rest of this entry »