Monday, May 21, 2012

Setting the Stage for Major Money Printing in the Eurozone

French President Francois Hollande and like-minded euro zone leaders are expected to promote the idea of mutualized European debt at an informal summit in Brussels this week, increasing pressure on German Chancellor Angela Merkel to drop her opposition to the proposal, reports FT.

Senior EU and U.S. officials said Hollande raised the topic of euro area bonds — bonds jointly underwritten by all euro zone member states — during G8 talks at the weekend and would again push it when EU leaders meet in Brussels on May 23.

He is expected to have backing from Italian Prime Minister Mario Monti, Spanish Prime Minister Mariano Rajoy and the European Commission.

This, of course, is a scheme to use the opportunity  the eurozone crisis provides to further create a central planning system for the EZ. The plan won't work though without massive money printing by the European Central Bank, a very price inflationary step, that will make life difficult for those throughout the EZ on fixed incomes. Without the money printing, a large burden would be put on Germany, the EU's biggest economy, to finance the debts of other member states. Something that German Chancellor Angela Merkel would agree to only if she were totally mad.

The aim is to agree ideas that can be formally signed off at the next summit on June 28-29, says FT.


  1. "Debt mutualization"...ha!

    While not exactly the same, such brings to mind Alexander Hamilton's famous:

    “a national debt…will be to us a national blessing. It will be a powerful cement of our union.”

  2. And I'm short the $$$!!!

    DUMB!! (me, that is)

    Unshorting as I write.