From the FINANCIAL TIMES:
Angela Merkel, the German chancellor, called on Monday for Europe to build a “political union” to underpin the euro and help the continent emerge from its “toughest hour since the second world war”….
“It is time for a breakthrough to a new Europe,” she told the annual conference of Christian Democratic Union party in Leipzig. “The task of our generation is to complete economic and monetary union, and build political union in Europe, step by step . . . That does not mean less Europe, it means more Europe.”…
A small bounce in markets following the news of Mario Monti’s appointment as Italian prime minister was soon snuffed out as investors fretted not just about Italy but also Spain and France. The premium Spain pays to borrow over Germany rose to a euro-era record of 433 basis points as its benchmark 10-year yields rose above 6 per cent for the first time in three months…
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