Europe Learns a Lesson About Forming Uni(c)o(r)ns
I mean really, what did Europe think would happen? Did they think that the IMF would hand over a bunch of free money without any terms and conditions whatsoever? Doesn't the EU fund the IMF and therefore know that the program doesn't work that way?
Now comes the last phase in the euro plan: total erosion of sovereign authority. Treatise? LOL, don't make me laugh.
European nations might need to surrender some control over public spending and other policies to resolve a crisis in the 16-nation currency union that uses the euro, the managing director of the International Monetary Fund said Tuesday.
"The idea that you can build a single currency and just let everybody do what they want is wrong," said Dominique Strauss-Kahn, who called for closer coordination among the eurozone's governments at a time when the stresses in the common currency are at a peak.
Greece on Tuesday tapped the first roughly $18 billion of an emergency loan program provided by its European neighbors after global bond markets abandoned the country and pushed it near default. The country's economic policies have made it perhaps the least efficient among the governments that use the euro. Strauss-Kahn said economic growth on the continent might remain below par until the eurozone moves beyond a mere monetary union.
As in whatever it takes to save the euro!! Fuck your countrymen, it's about this stupid ass fake money unit we made up after we fucked up our own currencies! (OK, in fairness to the Europeans, not all of them fucked up their own currencies)
Suddenly that $1 trillion bailout slush fund is starting to seem like a bad idea, eh?
Consensus has proved difficult. The emergency program for Greece took months to negotiate as the crisis intensified. While IMF and European funds now have begun stabilizing Greece's finances, there is disagreement over how the broader euro-area program will be structured.
French and other officials want funding commitments signed in advance as a show of faith in the euro and as a way to make the program as creditworthy as possible. German officials have said they think the fund should be assembled as countries prove they need help, to keep closer control over how it is used.
Strauss-Kahn said the episode has revealed a flaw in the design of the 16-nation union that created the euro a decade ago. Although monetary policy is managed by a single institution, the European Central Bank, the countries set their own tax rates, budgets and economic rules.
The Europeans can keep holding out for this Utopian dream of hand-holding, cheek-kissing cooperation but the path leading to today is tainted with deception, lies, and worse, a haphazard plan that left the EU's most precious asset - the euro - splayed out and exposed for the cruel joke that it is.
If the Eurozone situation can teach us anything, it's that none of these crackpot schemes ever come with a "what if" plan, it's just hope it works and throw money at it later if, um, it doesn't.
Anyway, the Germans are monkeying with short selling because obviously that has to be the problem and it has nothing to do with a debt problem.
Says the Telegraph (UK):
Traders are predicting chaos on the world's second-largest government bond market after the German authorities on Tuesday announced a ban on all naked short-selling in European public debt, as well as shares in the country's 10 largest financial institutions.
The unprecedented step saw the euro sink to a four-year low after Germany said that from midnight shorting of credit default swaps of any European government would be banned.
The prohibition is an attempt to counter speculators that Berlin believes are trying to destabilise the region's sovereign bond market.
Traders greeted the move by BaFin, the German regulator, with a mixture of anger and astonishment. One bond trader said he expected Wednesday's trading session to be one of the most volatile in living memory: "It will be complete chaos, I really don't know what the Germans think they are doing."
I'm sure this entire thing will just kind of blow over and be fine in a few days, have you guys seen the fucking S&P?! Nothing to see here, move along...
At some point, we are just going to have to take our punishment. All of us. Europe better learn to sit there and take it and we should probably learn to take notes because oh shit, we're next!