Thursday, August 18, 2011

Euro and European Currency Now At the Edge of The Precipice

Former European Commission chief Jacques Delors: "The euro currency and the European Union each today stand "on the edge of the precipice,"

He described as worthless the proposals to reinforce cross-border economic governance made by German Chancellor Angela Merkel and French President Nicolas Sarkozy.

"Open your eyes: the euro and Europe are on the edge of the precipice,"

"To avoid falling, the choice looks straightforward to me: either member states accept the robust economic partnership I always demanded, or they transfer more powers to the Union."

Delors said Merkel and Sarkozy were playing games by arguing for "a minimum amount of cooperation designed to limit any transfer of sovereignty" to Brussels.

Taken on that basis, the ideas for eurozone reform they put forward on Wednesday after a head-to-head in Paris "won't amount to a hill of beans."

He called for a "part-mutualisation" of eurozone member states' debts, "up to 60 percent of GDP," saying the pooling of guarantees on that basis would "put out the fire" on money markets.

"Right since the start of the crisis (when the true scale of Greece's financial troubles first emerged some 18 months ago), Europe's leaders have failed to see the reality in front of their eyes.

"How can they think the markets will believe their promises at the July 21 eurozone summit when they have to wait until the end of September for them to be put into action,"

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