Saturday, September 24, 2011

"Multi-trillion plan to save the eurozone being prepared"

This seems to be a rather big deal. And completely boneheaded. If it agrees to this, Germany will sign it's fiscal death warrant. At least it's not just the American who use the T word any more.
From the Telegraph:
4:51PM BST 24 Sep 2011
German and French authorities have begun work on a three-pronged strategy behind the scenes amid escalating fears that the eurozone’s sovereign debt crisis is spiralling out of control.
Their aim is to build a “firebreak” around Greece, Portugal and Ireland to prevent the crisis spreading to Italy and Spain, countries considered “too big to bail”.
According to sources, progress has been made at the G20 meeting in Washington, where global leaders piled pressure on the eurozone to fix its problems before plunging the world back into recession. In a G20 communique issued on Friday, the world’s leading economies set themselves a six-week deadline to resolve the crisis – to unveil a solution by the G20 summit in Cannes on November 4.
Sources said the plan would have to be released as a whole, as the elements would not work in isolation.
First, Europe’s banks would have to be recapitalised with many tens of billions of euros to reassure markets that a Greek or Portuguese default would not precipitate a systemic financial crisis. The recapitalisation plan would go much further than the €2.5bn (£2.2bn) required by regulators following the European bank stress tests in July and crucially would include the under-pressure French lenders....MORE
That follows this Daily Mail story from earlier this morning:

Six weeks to save the euro: Chancellor's warning after another day of financial turmoil

World leaders were warned last night that they have just six weeks to save the euro from collapse.

On another day of gathering economic gloom, George Osborne savaged eurozone leaders for failing to get a grip on their towering debts.

The Chancellor set a deadline of six weeks – when leaders of the G20 group of leading countries will meet for crunch talks in France – for action....MORE