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But could they not as well finance the goodies with their own CBs and treasuries?

I have seen the need for European Investment Bank investments and bank liquidification etc as a result of the current mess with a ECB without a proper sovereign.  A hack to fix the EMU without breaking it up.

If it is a larger matter of needing European regulators because EU rules has defanged national regulators, then those problems are not solved by instituting South European regulators. Unless the idea is that the South European countries should leave not only the EMU but also the EU and form their own union, the SEU.

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by A swedish kind of death on Fri Sep 20th, 2013 at 03:11:07 PM EST
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Formally speaking, it is true that a bloc of Spain, Italy and Greece will have no more leeway to regulate than Spain, Italy and Greece individually.

Practically speaking, if a bloc of Spain, Italy and Greece decide to do it anyway, that's a totally different animal from doing it individually.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Fri Sep 20th, 2013 at 03:20:04 PM EST
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I don't see that there are any insuperable obstacles to Portugal Spain Italy, Greece and Cyprus simply acting under their own sovereign powers to form such a union. I am of the impression that there is not a lot of formal legitimation of the EMU from the EU. All of the real action is between heads of state who, by now, are largely representing the leading financial interests of their countries. Were the above countries to coordinate withdrawal from the EMU and form a Seuro Monetary Union, especially one that included elected representatives from each member to an economic coordination policy board or some such which had mandated approval power over general SMU and SCB policy it would likely have more democratic legitimacy than does the EMU at present - but that is not a high bar.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Fri Sep 20th, 2013 at 03:34:39 PM EST
[ Parent ]
A hack to fix the EMU without breaking it up.

I don't see this happening without an existential threat to the EMU, which the creation of an SMU run on lines I have described would credibly provide.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Fri Sep 20th, 2013 at 03:48:43 PM EST
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