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dipsydoodle Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Nov-29-11 04:37 AM
Original message
Eurozone ministers meet amid fears of euro breakup
Source: AP

BRUSSELS (AP) -- Eurozone finance ministers are streaming into Brussels on Tuesday in a desperate bid to save the 17-nation euro currency - and to protect Europe, the United States, Asia and the rest of the global economy from a debt-induced financial tsunami.

Most officials agree that, in the race to save the euro, there is no time to lose, but all of a sudden it seems there are more leaks in the dike than there are fingers.

And it's not just a currency used by 332 million people that is at stake. As German Chancellor Angela Merkel and others have said, if the euro fails, so too does the 27-nation European Union, a rousing diplomatic success that united a continent ripped apart by two World Wars.

If the Euro fails, bank lending would freeze, stock markets would likely crash, and Europe's economies would crater. Nations in the eurozone could see their economic output fall temporarily by as much as 50 percent, according to UBS forecasters. The financial and economic pain would spread west and east as the U.S. and Asia get ensnared in the credit freeze and their exports to Europe collapse.

Read more: http://hosted.ap.org/dynamic/stories/E/EU_EUROPE_FINANC...
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pampango Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Nov-29-11 05:44 AM
Response to Original message
1. The Economist: The euro zone - Is this really the end?
EVEN as the euro zone hurtles towards a crash, most people are assuming that, in the end, European leaders will do whatever it takes to save the single currency. That is because the consequences of the euros destruction are so catastrophic that no sensible policymaker could stand by and let it happen.

A euro break-up would cause a global bust worse even than the one in 2008-09. The worlds most financially integrated region would be ripped apart by defaults, bank failures and the imposition of capital controls (see article). The euro zone could shatter into different pieces, or a large block in the north and a fragmented south. Amid the recriminations and broken treaties after the failure of the European Unions biggest economic project, wild currency swings between those in the core and those in the periphery would almost certainly bring the single market to a shuddering halt. The survival of the EU itself would be in doubt.

Yet the threat of a disaster does not always stop it from happening. The chances of the euro zone being smashed apart have risen alarmingly, thanks to financial panic, a rapidly weakening economic outlook and pigheaded brinkmanship. The odds of a safe landing are dwindling fast.

This cannot go on for much longer. Without a dramatic change of heart by the ECB and by European leaders, the single currency could break up within weeks. Any number of events, from the failure of a big bank to the collapse of a government to more dud bond auctions, could cause its demise. In the last week of January, Italy must refinance more than 30 billion ($40 billion) of bonds. If the markets balk, and the ECB refuses to blink, the worlds third-biggest sovereign borrower could be pushed into default.

http://www.economist.com/node/21540255
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GTurck Donating Member (569 posts) Send PM | Profile | Ignore Tue Nov-29-11 05:50 AM
Response to Original message
2. This should be...
front page news and the lede on every newscast. Sadly it won't be either. We have to concentrate on shopping stats and football scores.
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DCBob Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Nov-29-11 05:54 AM
Response to Original message
3. Its hard to imagine it all just falling apart like this. Surely they can come up with some plan..
to allow them to muddle through this without allowing a catastrophe.
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bossy22 Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Nov-29-11 07:42 AM
Response to Reply #3
5. There is
Let the ECB become the lender of last resort to these countries. That would stabilize the market


Germany is dead set against this
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DCBob Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Nov-29-11 07:44 AM
Response to Reply #5
6. Yes, I have heard of that plan. I think Germany will be forced to go along with it.
The alternative is too ugly.
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dixiegrrrrl Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Nov-29-11 06:30 AM
Response to Original message
4. Thank you for posting this.
:hi:
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russspeakeasy Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Nov-29-11 11:04 AM
Response to Original message
7. I am going to be cynical: I think this is NOT a meeting to solve
the crisis, but a meeting to divide the spoils based on inside information. lending will freeze, so get your zero interest loans now; stock markets will crash, so sell short.
When this charade is over, look to see who got extremely wealthy.
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