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Will Merkel Change Her Tune on Stability Bonds?

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Stability bonds. That is the new moniker given by the European Commission to euro bonds as it moves toward presenting its most definitive proposal yet for the debt pooling measure on Wednesday.

Indeed, European Economic and Monetary Affairs Commission Olli Rehn was in Berlin on Tuesday to tout Brussels' three-option studyon how bonds issued jointly by the 17 euro-zone member states could help stem the debt crisis.

He did so carefully. Chancellor Angela Merkel remains adamantly opposed to euro bonds, worried as she is that Germany would be disproportionately burdened. Instead, she insists that a clear commitment to rigid fiscal discipline, combined with the euro backstop fund, will be enough to calm markets.

(http://www.spiegel.de/international/europe/0,1518,799253,00.html)

What John Morrison said in August:

Getting the European response to this financial crisis right is the responsibility of the European Commission and arguably it is the failure of Europe to position itself in a credible manner to world capital markets which is the main cause of the latest stochastics in bond yields and the Euro. The root is internal politics in the European Commission & resultant weakness in policy development leading to a return to a Franco / German policy axis (which will never work) . The cause of this current crisis stage is that electorates and capital markets discovered 'after the fact' through a media drip feed that the European Commission had not completed enablement of the EFSF as promised by the President of the European Council. This is indeed a massive failure of Economic Governance.

Read this original thinking article here: http://www.asymptotix.eu/news/eu-economic-governance-lunatix-2

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