What else is new? The market had been down 6 straight days before this renewed optimisms that the EU's desparate meeting will accomplish something. If it does that will serioulsy be breaking precedent!
About the only hope is that the shear desperation will make them do something meaningful-something meaningful means the ECB does something meaningful. What seems too optimistic based on their performance till now is that they should actually no longer trail events.
"The euro zone's 17 finance ministers converged on EU headquarters Tuesday in a desperate bid to save their currency — and to protect Europe, the United States, Asia and the rest of the global economy from a debt-induced financial tsunami."
To forestall a financial tsunami would seem to require a sense of urgency-nothing has worked till now.
"The ministers were discussing ideas that only weeks ago would have been taboo: countries ceding fiscal sovereignty to a central authority, an elite group of euro nations that would guarantee one another's loans but require strong fiscal discipline from members. "
Yeah well someone shut off Germany's mic first. "Changes to existing rules are being touted as one way the eurozone can get out of its debt crisis, which has already forced Greece, Ireland and Portugal into international bailouts and is threatening to engulf bigger economies such as Italy, the eurozone's third-largest. "
Despite my mic joke, Angela Merkel has said, "German Chancellor Angela Merkel reiterated her support for changes to Europe's current treaties in order to create a fiscal union with binding commitments by all euro countries."
So take that Scott Sumner who was telling me that Germany would be better off than greater fiscal union.
In particular we argued about whether or not Germany needed the EU. I said yes, look at the its current account surplus, he claimed that the CA surplus means nothing and that this shows I'm a "mercantilist."
"we’ve known for 200 years that common sense intuition is worthless in international trade; Ricardo discredited that mercantilist view long ago. Indeed it would be only a slight exaggeration to say that the discrediting of mercantilism was the bedrock on which all of modern economics rests. "
Well however if it's not in Germany's interests how come they are actually talking about it now?
"Countries outside the eurozone heaped on the pressure, knowing that if the euro fails, bank lending would freeze worldwide, stock markets would likely crash and Europe's economies would crater. The pain would spread to U.S. and Asia as their exports to Europe collapse."
"President Barack Obama said Europe's failure to resolve its debt crisis would complicate his own efforts to create American jobs. And even Poland, a non-eurozone nation historically wary of German dominance, appealed for help."
This appeal by Poland bears repeating in full: "I will probably be the first Polish foreign minister in history to say so, but here it is," Radek Sikorski said in Berlin. "I fear German power less than I am beginning to fear German inactivity."
"The biggest threat to the security and prosperity of Poland would be the collapse of the eurozone," Sikorski added. "And I demand of Germany that, for your own sake and for ours, you help it survive and prosper."