ROME/BERLIN (Reuters) - Italian borrowing costs reached breaking point on Wednesday after Prime Minister Silvio Berlusconi's insistence on elections instead of an interim government opened the way to prolonged instability and delays to economic reform.Read the rest here.
Italian 10-year bond yields shot above the 7 percent level that is widely deemed unsustainable, reflecting investors' concerns that they may not get their money back and prompting German Chancellor Angela Merkel to issue a call to arms.
Merkel said Europe's plight was now so "unpleasant" that deep structural reforms were needed quickly, warning the rest of the world would not wait. "That will mean more Europe, not less Europe," she told a conference in Berlin.
She called for changes in EU treaties after French President Nicolas Sarkozy advocated a two-speed Europe in which euro zone countries accelerate and deepen integration while an expanding group outside the currency bloc stayed more loosely connected -- a signal that some members may have to quit the euro if the entire structure is not to crumble.
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At what point does Europe (and eventually, the US) finally admit that its welfare systems and levels of public employment are not sustainable? Does the whole place have to collapse like the Soviet Union before that happens?
ReplyDeleteMaybe.
ReplyDeleteGermany calling for a New Europe? Weird. However, this recession has been nightmarish for many so I'm not too surprised.
ReplyDeleteMaybe the whole idea of bringing on this crisis (which was done with the leaderships' eyes wide, wide open) was to force the New Europe.
ReplyDeleteThat's my theory, anyway.