New measures announced at the latest EU Leaders' summit include:
1. Spanish and other Eurozone banks will be able to raise money in the markets and receive bailout money directly
2. A single banking supervisor is sought to be established for the Eurozone (almost certainly the ECB - though this may change if any of the 27 countries want to stay out of the banking union),
and
3. Common capital requirements.
This should frustrate all those who have been betting against the Euro, as what I have been saying for several months should now be evident to everyone. Progress on the above issues is at present anticipated to take up to the end of the year.
As the Euro stabilises, however, lest we become too euphoric about it, here are the essential steps that still need to be taken before the Eurocrisis can be declared over:
A. A common Eurozone system for deposit;
and
C. Clear identification of which body will actually stand behind the Euro, in the same way as the UK Government and the Bank of England stand behind the UK Pound, or the US Government and Federal Reserve stand behind the US Dollar.
1 comment:
The economy on several European countries have shown a little improvement since the Euro crisis had started but this improvement doesn't mean that the Euro crisis is over.
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