Warner: IMF still won’t admit truth about the euro (5)

It is often said that travel broadens the mind. Not so for finance ministers gathering in Washington DC this week for the spring meeting of the International Monetary Fund and G20. For them, the agenda will seem wearily familiar.

Like a bad penny, the eurozone debt crisis keeps returning, seemingly deliberately to coincide with these international summits. Spain’s rapidly deteriorating economic and financial position provides the flash point du jour.

With yields on Spanish government debt again above 6pc, and a couple of crucial bond auctions looming, matters are once more coming to a head. Crushed by repeated austerity programmes, the big southern European economies are sinking back into recession, raising new doubts about their ability to meet fiscal targets.

Discussion will therefore once again focus on the creation of a firewall big enough to provide for more, and even bigger, eurozone bailouts, including Spain and possibly Italy, too. This is proving both difficult to achieve, and misses the point, for it presupposes that the crisis is at heart just a confidence issue that can be solved simply by creating a backstop large enough to convince markets they cannot break the euro.


See Also:

Spain plans to strip regions of powers in bid to calm markets

Debt crisis: Japan pledges $60bn to boost IMF war chest

Greece pins recovery hopes on solar energy

Plan to Set Up European Rating Agency Under Threat

Europe’s Economic Suicide

Afternoon Updates:

12:03 pm EDT, April 17th, 2012 — Austerity is not the problem in the eurozone – the euro is

12:04 pm EDT, April 17th, 2012 — Taxes Prompt More Americans to Renounce Citizenship

12:05 pm EDT, April 17th, 2012 — Soros warns euro crisis could destroy the EU

12:06 pm EDT, April 17th, 2012 — Smash ‘n’ grab raid condemns Argentina to pariah status

12:07 pm EDT, April 17th, 2012 — Why you can’t inflate away the eurozone’s troubles

Comment: “Hmmm…. why is the west in so much trouble in the first place. All these decades of government programmes, promising pensions, health, education, jobs, all of it. All those wonderful words spilled like buckets into the ocean. Alas, where has it gotten the people who believed it? Ahh…. the debt…. the crisis… the fears. And what of those who made these promises? What’s become of them? Oh, university posts, think-tanks, boards of directors. How very nice for them. Lie, make a mess, sow discord and deceit. Then off to Tuscany or Hawai’i to enjoy the sunshine. Perhaps, although it’s doubtful, people will one day see this charade for what it is, a great, big, lie designed to keep the proles pulling the yoke for the collective masters.”

12:08 pm EDT, April 17th, 2012 — Spain raises billions in debt auction, but yields soar

12:09 pm EDT, April 17th, 2012 — Belated Reforms Cut Deep in Southern Europe

12:10 pm EDT, April 17th, 2012 — Europe tries to come clean on economic statistics

12:11 pm EDT, April 17th, 2012 — IMF lifts UK growth forecast but sees risk of global slump

12:12 pm EDT, April 17th, 2012 — Debt crisis: Live

This entry was posted in Featured and tagged , . Bookmark the permalink.
  • ward

    The Question is Jack, will they print or will they crash.

    • Jack

      They’ll crash. Germany will not permit it.

      My view: The other day a suggestion was made that Germany should withdraw from the EU. It is a very complex issue but my view is that if Germany does NOT withdraw the EU will be overwhelmed by the financial picture. On the other hand if Germany does withdraw the EU is “done like dinner” and Germany is on the hook for all the EU debt (Germany backs the ECB — a “zombie” bank because of all the bad debt they are backing) and that is not a pretty picture either.

      To be clear — there are going to be a few world billionaires joining the unemployment lineup (in theory) but “what the hell”. What do they matter against the future of nations when you stop to consider they have “hidden away” many millions in secret bank accounts? They won’t suffer.

      I don’t know what the answer is other than to dissolve the EU as it is now and go back to “square one”. That would be a trade agreement — nothing more — and then start again. But the next time (because there will be a next time) get it right and take the time to think it all through before the panic we now see erupts.

      And “no” — socialism (many false promises) has no part in the re-organization. Politicians should have no say in what follows next because “as a group” they can’t walk and chew bubble gum at the same time.

      Bankers know what needs to be done.

      I’m trying to order my thoughts here. It seems to me that the EU has been constructed on the dream of money and a better life for all. For many years all seemed to be working but no more. A foolish dream has crashed on the rocks of reality.

      Thatcher: “At some point socialists run out of other people’s money (paraphrased)”.


      And now they have and are at this very moment running around the world with a begging bowl.

      I am not sympathetic because if an idea doesn’t work the first time it is a “given” that repetition often produces the correct result as improvements are made. The EU is such a case.

      The idea of a United States of Europe isn’t wrong and may yet work but in my view this first “kick at the cat” has gone badly off the rails and when that happens any scientist will tell you “go back to the start and begin again”.

      I see no other course for the EU because “for sure” this experiment in European democracy has run badly off the rails and all countries involved need to “suck back and reload”.

      “Trade” — nothing else until well informed voters weigh in and fire all the socialists.

      The “dream” is dead. They (socialists) created this nightmare.

      Now they must explain it and I am not hopeful they can. In fact, I am certain they are all “dead in the water”.

      I believe so.

      Obama — “bend over and kiss your ass goodbye”.

      • Cy

        Germany IS the EU. It’s the southern economies that should be trying to escape – each will likely go into default and in exchange have to give up assets to Germany … or play the tune Germany calls … or both.

        This leaves Germany a regional power. Doubt they’d turn their backs on that prospect.

        • Jack

          Re: “This leaves Germany a regional power. Doubt they’d turn their backs on that prospect.”

          Disagree. Germany has tried twice before to take over Europe through violence. They don’t want to go there anymore. But their politicians still “live the dream” no matter how hard it batters their taxpayers.

          And it will.

          If I was German taxpayer this day I would be screaming for Merkel’s head. And I would be correct.

          Germany has evolved and “no more” resonates (video).

          “Please talk to me.”

          Celine is is exactly correct. And since we are remembering the Titanic this day here’s more (video) from Celine
          — a Canadian “wonder”. I always wonder what she is going to do for an encore and regardless whether she hails from Quebec “she’s mine”.

          A Canadian — part of a priceless heritage.

          She is “Quebec” and far from what we read in our English papers. A lady who does remember the Titanic and starred in a movie about it. I remember although Celine may not.

          And I thank her. I can’t say the same for our politicians.

          Never put down Quebec. If you must — go after their politicians.

          Many of their own voters do (rightly so) and average “Quebeckers” feel all pandering politicians are “in season” with no bag limit.

          I agree. Be selective and don’t throw the baby out with the bathwater. You won’t be sorry because they “talk funny”. In no other way are they any different than any other Canadian and Celine says it best through her music.

          I agree with her. “Anglais” is the language of international commerce and the sooner France (and Quebec) “get’s with the program” the sooner they will move on.

          So far — “no cigar” but then again Quebec has Charest. What can I say?

          Perhaps “why” should any language be protected in this country when we speak many?

          Why should we not settle on ONE official language and end it there? Why should any language (pick your choice) be treated any different than French or English?

          Perhaps because we are a changing society we should just forget this “brain wave” and move on with NO “official language” (we don’t need it and it costs us billions).

          Just curious.

  • Jack

    The crash of the Soviet Union “writ large”? I’m beginning to think so.