From REUTERS:
A “disastrous” German bond sale on Wednesday sparked fears that Europe’s debt crisis was starting to threaten even Berlin, with the leaders of the euro zone’s two biggest economies still at odds over a longer-term structural solution.
With contagion spreading, a majority of twenty prominent economists polled by Reuters predicted that the euro zone was unlikely to survive the crisis in its current form, with some envisaging a “core” group that would exclude Greece….
The German debt agency could not find buyers for almost half a bond sale of 6 billion euros. That pushed the cost of borrowing over 10 years for the bloc’s paymaster above those for the United States for the first time since October…
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EDITOR: Deserving of reading in its entirety, the article continues with a discussion that includes the following: “A new ‘core’ euro zone with fewer members received qualified backing from 10 economists as a possible solution, with seven of them saying Greece should be excluded from it.”
Off the Euro, Greece could float its currency to increase exports (and tourism) and decrease imports. With the already agreed upon ‘voluntary’ forgiveness of bond debt by half and the ability to control its own economy, Greece would soon return to economic vitality rather than facing a decade of steep recession if not depression. Spain, Portugal and conceivably Italy may have to follow suit.
It may be either that or a true United States of Europe with the current nations becoming the equivalent of American states. We don’t see how that makes sense for Germany.
