Today is the big day: a European summit scheduled to figure out how to fix Europe’s massive financial crisis. Will the Euro survive?
The Wall Street Journal reports that German and French leaders are poo-pooing predictions of a new eurobond, the argument being that it’s just a little too communal:
“Ahead of a summit … between German Chancellor Angela Merkel and French President Nicolas Sarkozy, Berlin and Paris publicly dismissed the growing clamor for common euro-zone bonds. But the realization is dawning in both countries that Europe may need radical change to save its common currency.”
The New York Times reported on the growing popularity of the eurobond:
“The euro bond concept is gaining traction among economists and other outside experts like George Soros, the billionaire investor, as a way of preventing borrowing costs for Italy and Spain from rising so much that the countries become insolvent, an event that could destroy the common currency.
Debt issued and backed by all 17 members of the euro zone, euro bond proponents say, would be regarded as ultrasafe by investors and could rival the market for United States Treasury securities. The weaker euro members would benefit from the good standing of countries like Germany or Finland and pay lower interest rates to borrow than if left to face investors on their own.”
Epic European debt crisis? We totally called it. Read what Randal Hines had to say about it in the Carnet Atlantique.