Jun
2nd
Thu
2nd
Borrowing Across EU National Monetary Authorities
Martin Wolf has another scary op-ed on the Eurozone crisis. He brings up a component of the economic imbalances within the Eurozone that so far has been out of the spotlight: borrowing within the European Central Bank System of PIGS national central banks from German and Dutch national central banks, to the tune of €300 billion.
I recently heard Nouriel Roubini in Milan saying that what needs to be done about the euro debt crisis is clear and the main risk he sees is “policy risk”; I am not so sure anymore that the plan to orderly get out of this mess is so clear and the only risk is an execution risk by our politicians. Below is how Martin Wolf closes his piece:
The eurozone confronts a choice between two intolerable options: either default and partial dissolution or open-ended official support. The existence of this choice proves that an enduring union will at the very least need deeper financial integration and greater fiscal support than was originally envisaged. How will the politics of these choices now play out? I truly have no idea. I wonder whether anybody does.
