Fri Nov 18th, 2011 at 04:25:06 AM EST
The Markets™ are pulling out of eurozone countries' sovereign bonds with increasing haste, sending spreads with the German bund ever higher: the French spread briefly above 2%, and even the ultra-orthodox Netherlands affected. We've been hearing voices raised in favour of the ECB monetarising sovereign debt, and both Zapatero and Sarkozy are pushing for a change in Merkel's attitude.
Time wasted. The German political and financial establishment will not give way on monetarisation, citing the usual ghost haunting, apparently, the country's sense of its own history: hyper-inflation (look out, here comes Hitler!). Michael Meisser, deputy head of the CDU/CSU group in the Bundestag, says it would be futile to attempt to solve the crisis by the "money printing press" (h/t Eurointelligence email briefing), while the chief of the economic wise men advising Merkel, Wolfgang Franz, says in a FAZ interview:
Merkel too refuses to see any solution in the role of the ECB. There's only one way forward for the euro: a new-treaty forced march to hardline fiscal integration in which "sinner" countries will be taken over and run by the Union in one of its avatars (why not an EMF?).
Not my federalism, not my Europe.