Every currency needs a lender of last resort

[suityou01]

According to Silvio Berlusconi in The Times this morning. The ECB should be that lender, but Germany oppose it - presumably as mass euro printing hurts their export market.

Then again, Italy circling the plug hole ultimately could hurt their export market - so to that end it's arguing with itself really.

That said, the EFSF has been forced into buying up it's own debt, and the BRIC nations won't invest in such a "lazy" europe, where we all retire at 50 and only pay tax when we volunteer it (finger pointed at Greece and Italy here).

So the options are :

Italy goes bust
ECB prints Euros
Germany bails out Italy
IMF prints SDRs and tops up the EFSF
EFSF leverages it's coppers with handouts from China.

Whichever of those options pans out, the end game is still the same. A much more tightly integrated europe. And Merkel this morning stating we should embrace our political unity.

The euro is on life support for the benefit of Germany. No wonder no one is interested in helping out.

[russell]

Italy's 10 year bond rate is dropping, now at 6.4 I think the change of governments has averted the crisis. I think Italy will be ok now and Greece will take the bailout. Nothing much needs to be done now for a few years.

People who are still banging on about it are doom merchants with agendas.

[BlasterBates]

There is another option, one that Ireland followed and is currently getting them out of the sh*te; become competitive. This what they should do. Why should the Germans bail them out, they´ve already gone through these reforms, up to these countries to do their homework. ECB should only be a lender of last resort after:

1) Italy raises retirement age to 67
2) Sacks all it´s over paid useless civil servants
3) Sells off publicly owned assets
4) Reduces red tape
5) Clams down on the Union and allows temporary employment contracts

...and a few more to boot.

Once they´ve done all of the above, then the ECB could be a lender of last resort. I don´t buy into "no reform, just devalue, spend even more until you really do go bankrupt" really.

[CheeseSlice]

According to Silvio Berlusconi in The Times this morning. The ECB should be that lender, but Germany oppose it - presumably as mass euro printing hurts their export market

Would it? I'd have though printing more trillions of Euros would devalue the currency, and hence Germany would boom from exports. However, if the ECB bails out Italy this way, German may feel dangerously high inflation which could develop into a Weimar hyperinflation scenario.....

Wage inflation,... bring your wheelbarrow.


No you can't have Xbox, take your sister and little brother and go play with your pocket money.


Cheaper to burn euros than to buy firewood this winter.

[gingerjedi]

[QUOTE=CheeseSlice;1426916]

Wage inflation,... bring your wheelbarrow.




Whats this hyperinflation? I thought all contractors took their wages home in a wheelbarrow?

[sasguru]

Italy's 10 year bond rate is dropping, now at 6.4 I think the change of governments has averted the crisis. I think Italy will be ok now and Greece will take the bailout. Nothing much needs to be done now for a few years.

People who are still banging on about it are doom merchants with agendas.

You're vying with Lord Haw Haw for the Village Idiot of CUK nomination.

[russell]

You're vying with Lord Haw Haw for the Village Idiot of CUK nomination.

I wouldn't even try and compete with you, the winner 6 years in a row.

[shaunbhoy]

According to Silvio Berlusconi in The Times this morning.

Says the former leader of this Month's "Borrower of last resort", despite valiant challenges being put in by Greece, Spain, and Portugal.

[Arturo Bassick]

I liked this thread better when it was Currenty!