Euro bonds are “not needed and not appropriate,” Merkel said today at a press conference with Italian Prime Minister Mario Monti and French President Nicolas Sarkozy in Strasbourg, France. She said euro bonds would “level the difference” in euro-region interest rates. “It would be a completely wrong signal to ignore those diverging interest rates because they’re an indicator of where work still needs to be done.” (Source: Bloomberg)
The bottom line is that banks will have to recapitalize and pay the price for lending to governments that could not repay their loans.
Countries will have to restructure (something I think very difficult) to become more efficient and be able to compete with Germany.
In other words, Germany wants to solve the European debt problem with less debt and improved productivity.
We, in the USA, want to solve our debt problem with more debt.
More details in my The Peter Dag Portfolio , in Dag's Exclusive market Alert, and my free educational videos on http://www.peterdag.com/.
George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest
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