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I think we only disagree on what the focus for the solution should be - ie how the transfers should take place - via the monetary framework and policies or the broader political deal on what the EU is about.
The ECB, in concert with the markets, can shoot down any broader political deal through recalcitrant monetary policy.

Hey, when Ireland was claiming they could hold out for 9 months on a cash basis without resorting to the bond markets the ECB threatened to crash their banks, and Ireland folded. They are doing the same with Greece as we speak: "any debt writedowns for private investors and we'll instantly crash the Greek banks by refusing to discount their Greek bond holdings for liquidity".

There is truly no hope whatsoever here, politically.

Economics is politics by other means

by Migeru (migeru at eurotrib dot com) on Fri Jun 3rd, 2011 at 08:21:08 AM EST
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