Pinnacle Activity Ticker
Eurobonds Not Happening
Pinnacle Digest writes: Axel Merk’s latest article addresses the current fiscal problems the Euro Zone is facing and what’s delaying a solution from taking shape. While it’s largely believed that the solution to the Euro Zone’s problems, or at least a major contributor to a solution, is the implementation of Eurobonds. However, most countries within the the Euro Zone have much to lose if these debt instruments are put in place.
Obviously, Germany would have to take on an unfair burden if Eurobonds were implemented. Given the fact that Germany is like the mother hen to Europe, and may be the only solvent Euro Zone nation in 18 months, it’s obvious why Merkel has publicly stated that Eurobonds wouldn’t be an option so long as she lives. She actually said that too. We aren’t making this up.
The debt-ridden nations such as Greece, Portugal, Spain, Cyprus and perhaps Italy, all have a tremendous amount to lose if Eurobonds are implemented. There are no free lunches in this world, and if such instruments were put in place, the sovereignty of these debt ridden nations would likely be lost. Merk explains further (in his article) as to why Eurobonds don’t have much of a shot at being implemented.
With that said, Axel Merk explains what he sees as a likley outcome to the Euro Zone’s fiscal problems and it does involve some nations, particularly Spain, potentially losing control of its banking system in order to maintain sovereignty of its bonds.
Merk also addresses the likelihood of a default within the Euro Zone. Click here to read the article.