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When will EU's debt crisis end? When Greece defaults?

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The politicians seem unable to agree a sustainable path out of the euro mess that we are in. Tuesday's Zarky-Merkel summit did not reflect Euro Area unity, less EU unity. The proposals were half measures and deflections that the market saw through with evil eyes. There is going to be another Tuesday Franco-German meeting coming week, now the finanace ministers turn to enter stage. For how long will the farce continue?


The resistance to agree will only prolong the crisis. With the dysfunctional European Commission economic policy and the dominance by the two main creditor countries to toss our weekly statements that the market cannot swallow the crisis will continue. So it is hard to say when the Meltdown Day will happen, as the EU politicians won't be able to agree before such a grim day.


Already in May 2010, long before the latest stress test confirmed the data, we estimated France's and Germany's exposure to the PIIGS to be 911 and 704 bn euro respectively. This is due to the whole modus operandi of the euro, that was more or less forced through by France (think Delors) and Germany. France and Germany were tranferring funds to the Olive Belt (or the PIGS countries that a Goucho Marx looking German politician minted the South) and they were willingly consuming the money. It has been no secret for the past decade.


William Browder, CEO of Hermitage Capital Management, told CNBC: "How does this thing end? It ends when the politicians stop kicking the can down the road and they allow Greece to default and they allow Greece to exit the euro,"


The idea is that once Greece defaults the country, and others in the same boat, will be able to restructure their debts in an affordable manner. While the cascading defaults will cause pain, they also will pave a way back to stability for the indebted countries.

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