Getting there as previously discussed:
Germany signals shift on 2.3 trillion redemption fund for Europoe
By Ambrose Evans-Pritchard
June 13 (Telegraph) — The German government has begun opening the door to shared debts for the first time in a profound change of policy, agreeing to explore proposals for a €2.3 trillion (£1.9 trillion) stabilization fund in order to stop the eurozone’s crisis escalating out of control.
Mr Merkel rejected the Redemption Pact last November as “totally impossible”, even though it was drafted by Germany’s Council of Economic Experts or Five Wise Men and is widely-viewed as the only viable route out of the current impasse. Photo: Alamy
Officials in Berlin say privately that Chancellor Angela Merkel is willing to drop her vehement opposition to plans for a “European Redemption Pact”, a “sinking fund” that would pay down excess sovereign debt in the eurozone.
“It is conceivable so long as there is proper supervision of tax revenues,” said a source in the Chancellor’s office. The official warned that there would be no “master plan” or major break-through at the EU summit later this month.
Mr Merkel rejected the Redemption Pact last November as “totally impossible”, even though it was drafted by Germany’s Council of Economic Experts or Five Wise Men and is widely-viewed as the only viable route out of the current impasse.
Fast-moving events may have forced her hand. She is under immense pressure from the US, China, Britain, and Latin Europe to change course as the crisis engulfs Spain and Italy, threatening a global cataclysm.
This may be giving too much credit or ignoring the more obvious explaination, but is there a chance that the Euro architects designed the system as a sort of poison pill to force future leaders’ hands? There is a logic of how this has to work baked into the cake.
@KD,
That is a novel idea Holmes!
http://en.wikipedia.org/wiki/Robert_Mundell
I talked to one of the people directly under this guy in croatia last year, she said the euro was doomed and mundell never intended for what had happened. I think “the beast” took on a life of its own as the mosler peers of the world saw a chance to increase their power and riches. The masters of the universe are only doing god’s work after all. What is it rhambo said in the obama administration, never let a good crisis go to waste. Ed Bernays was using propoganda 100 years ago to shape public opinion. Your thesis is plausible to me, a bunch of “engineers” getting together and herding sheeple into a currency bloc that mundell said wasn’t workable, and taking the crisis and forcing their engineering down thier throats kicking and screaming.
Isn’t a united europe a good thing though? 2 world wars started from that region is enough according to Delong.
@Save America,
According to Ben Franklin, our Revolution was a battle over the price of providing an adequate currency supply, which – when turned over to the banking lobby – became far too high to pay. That “tax” was repeated post WWI in “The Economic Consequences of the Peace”.
The EEU should have formed policy union first, and currency later. Those robbed, whether in colonies here or there, may decide to revolt anyway.
We may yet see “The Economic Consequences of the Greece”
@roger erickson, http://www.chicagofed.org/digital_assets/publications/working_papers/2001/Wp2001-22.pdf
Kouparitsas considered the United States as divided into the eight regions of the Bureau of Economic Analysis.[10] He found that five of the eight regions of the country satisfied Mundell’s criteria to form an Optimal Currency Area.[11] However, he found the fit of the Southeast and Southwest to be questionable. He also found that the Plains would not fit into an optimal currency area.
‘“It is conceivable so long as there is proper supervision of tax revenues,” said a source in the Chancellor’s office.’
So change of heart, but not a change in theory, i.e., tax revenues still believed to finance sovereign spending. Still, better to be more like Japan, I suppose.
Schade
“If we had done something remotely like Simpson-Bowles,” Jamie Dimon said .., “you would have increased confidence in America. You would have shown a real fix of the long-term fiscal problem. I think you would have had . . . a more effective tax system that is conducive to economic growth.”
http://www.washingtonpost.com/opinions/dana-milbank-the-wall-street-senate/2012/06/13/gJQA633yaV_story.html
For Pete’s sake! Just charge Jamie Dimon with treason?
If Ben Franklin were here today, he’d thoughtfully insist on a revolution against the tyranny of bad monetary policy.
http://21stcenturycicero.wordpress.com/fraud/how-benjamin-franklin-made-new-england-prosperous/
@roger erickson,
ps: note the comments at this reference indicate that many of the quotes attributed to Franklin were actually from others.
@roger erickson,
“I think you would have had . . . a more effective tax system that is conducive to economic growth. (As long as we don’t have to pay any of them, that is.)”
Yeah Jamie, I’d say you certainly have a lot of Bowles to come up with a statement like that. Did you base that on the Kleptoral Balances approach?
Mr. Merkel? She ain’t the prettiest gal in town, but…
@Oliver,
Or the brightest…
@Oliver, The version of the article currently posted at telegraph.co.uk says ‘Mrs’. Weird. Perhaps it’s been corrected since Warren looked at it.
More signs that the EU is doing things backwards, and for the wrong reasons:
EU President, Jose Manuel Barroso: “We advocate further integration within the Euro area. It is now evident that this is indispensable for the sustainability of our common currency,”
Back to destroying Aggregate Demand, employment, and net capabilities … in order to sustain a fiat currency?
What part of “fiat” don’t these people understand?