The controversial financial speculator George Soros believes that the existence of the common European currency and the unwillingness of Germany to guarantee the debts of the poorer European countries will eventually lead to the dissolution of the European Union.

George Soros, also known as “the man who broke the Bank of England”, has been promoting the idea of Eurobonds i.e. special debt instruments backed jointly by all members of the European Union. The money obtained from selling such bonds would be used to finance the deficits of countries like Greece, Portugal, Spain or Italy.

At the same time, the shared responsibility for paying the debts assumed through Eurobonds would mean that Germany would likely have to pay for the financing of the weaker European countries, implicitly transferring money from the German taxpayers to the welfare recipients from France, Italy and other countries with oversized welfare systems. George Soros argues that it is both a moral obligation of Germany and the soundest solution for the European crisis. The German economists who oppose the issuance of such bonds believe that “debt mutualization” would be detrimental for the fiscal discipline of the European countries and would benefit the countries that have unsustainable deficits at the expense of the more disciplined countries like Germany. >> Read More

How fair is the effort to save the euro if the people living in the countries that receive aid are wealthier than the citizens of donor countries like Germany? A debate over a redistribution of the burdens is long overdue.

The images we see from the capitals of Europe’s crisis-ridden countries are confusing to say the least. In the Cypriot capital Nicosia, for example, thousands protested against the levy on bank deposits, carrying images of Hitler and anti-Merkel signs, one of which read: “Merkel, your Nazi money is bloodier than any laundered money.”

German Chancellor Angela Merkel was greeted by a similar scene when she visited Athens in October 2012. An older man with a carefully trimmed moustache and pressed trousers stood in Syntagma Square. The words on the sign he was carrying sharply contrasted with his amiable appearance: “Get out of our country, bitch.”

Despite these abuses, the protesters and all of Merkel’s other critics in Rome, Madrid, Nicosia and Athens agree on one thing: Germany should pay for the euro bailout, as much as possible and certainly more than it has paid so far.

They argue that Germany is a rich country that has benefited more than all others from the introduction of the euro, and that it has flooded other European countries with its exports, becoming more prosperous at their expense.

Germans Own Less than Those Asking for Money

But there is also a second image of Germany, one that’s based on numbers, not emotions. The figures were obtained by the European Central Bank (ECB) and released last week. This image depicts a country whose households own less on average than those that are asking for its money.

In this ranking of assets, Cyprus is in second place Europe-wide, while Germany ranks much lower, even lower than two other crisis-ridden countries, Spain and Italy. >> Read More

German chancellor Angela Merkel has caused a stir this afternoon after declaring that European countries needed to yield some sovereignty to ensure Europe’s survival.

Merkel made a pitch for more integration at a press conference with Polish prime minister Donald Tusk — who expre

The chancellor was concerned that other European leaders lose their commitment to a closer Europe when the crisis ebbs away.Tusk, though, warned that it could be counterproductive for Berlin to force its agenda on the rest of the EU

As Reuters reports:

“We seem to find common solutions when we are staring over the abyss,” Merkel said. “But as soon as the pressure eases, people say they want to go their own way.

“We need to be ready to accept that Europe has the last word in certain areas. Otherwise we won’t be able to continue to build Europe,” she added.

Tusk said it would be “dangerous” if other countries in Europe felt Germany was imposing its own economic model across the entire bloc. >> Read More

2012 has been a year in which investors have become much more comfortable with sovereign debt.  Below is a snapshot showing credit default swap (CDS) prices for the sovereign debt of 42 countries around the world.  As shown, only one country saw its default risk increase in 2012 — Argentina.  Six countries saw default risk fall by more than 70%, and they are all European countries.  And while the US still has low default risk compared to the rest of the world, it only fell 16% in 2012, which ranks it fourth worst on the list.  The Fiscal Cliff looms large.

David Cameron and German Chancellor Angela Merkel have held “open, warm and friendly” talks about the controversial EU budget, Downing Street says.

At the end of the hour-long meeting Number 10 said “both parties were at the same end of the spectrum”.

Mr Cameron had said the EU budget should be frozen or cut, but Mrs Merkel says an increase is necessary.

Officials said discussions on the issue would continue.

Ahead of the crunch talks between the two leaders, Mrs Merkel said she wanted Britain to remain in the European Union. >> Read More

German Chancellor Angela Merkel says Europe’s sovereign debt crisis will last at least five more years.

Mrs Merkel says the continent is on the right path to overcome the crisis but “whoever thinks this can be fixed in one or two years is wrong”.

Two years ago some heavily indebted European countries were dragged into the turmoil that first gripped global financial markets in 2007.

Greece in particular has been struggling with the austerity conditions imposed on it by countries such as Germany.

But Merkel told a regional meeting of her Christian Democratic Party today that the time had come for “a bit of strictness.”

Otherwise, she says, Europe won’t be able to attract international investment.

 Italy has averted the worst case scenario of the debt crisis, and economic recovery in the eurozone‘s third largest economy is within reach, Italian Prime Minister Mario Monti said on Wednesday.

“Although recovery is not visible in numbers yet, … it is now within our country’s reach and I think it will come soon,” Monti told local television Norba 24.

The threat of a financial crisis has abated considerably, he said.

Italy was now among the European countries that would decide how to help deal with the Greek debt crisis, and it was not by chance that Italy had regained “a respected position in a decision-making team,” the prime minister said.

Since Monti took office last November, his emergency cabinet of non-political technocrats has striven to cut the deficit and lower borrowing costs through a harsh austerity policy.

But as protests have caused a mounting social tension over the past weeks, local analysts urged the government to speed up with the announced plan for growth to stimulate the economy, which suffered from the volatile financial markets and has fallen for four consecutive quarters.

My dear countrymen, brothers, sisters and dear children.

I greet you all on this anniversary of our Independence.

The leaders of our freedom movement, under the stewardship of Mahatma Gandhi, had dreamt of an independent and prosperous India. On this day in 1947, Pandit Jawaharlal Nehru took the first step towards the realisation of that dream by hoisting the Tricolour at the Red Fort. The journey we began on 15 August, 1947 is now 65 years old. We have achieved much in these 65 years.

Today is certainly a day to celebrate the success of our democracy. However, on this occasion we should also introspect about what remains to be done. We would achieve independence in the true sense only when we are able to banish poverty, illiteracy, hunger and backwardness from our country. This would be possible only when we learn from our failures and build on our successes.

Brothers and Sisters. >> Read More

In a nutshell: the contraction in the world economy is accelerating primarily due to that fulcrum continent, Europe, where 10 out of 11 countries indicated they are now in contraction. And since Europe is the nexus economy for global trade, what happens in Europe happens everywhere. As BAC summarizes: “From June’s levels’ global PMIs were mixed with roughly half (13) of the manufacturing PMIs decreasing over the course of the month. Out of the 23 countries that have reported so far, sixteen of the PMIs indicate that their manufacturing sectors are contracting – indicated by a PMI reading below 50. Europe’s sovereign debt and banking crisis continues to take a toll on the region’s manufacturing sector. Out of the 11 European countries that we reported on today, 10 printed with a PMI below 50. In other words, the majority of the global manufacturing weakness is stemming from Europe.”