Shakespeare finished his famous line with "signifying nothing". We have to hope that the meetings Europe's leaders are holding this week have a different ending than Shakespeare's. Otherwise, it's hard to imagine anything other than some variant of the fourth quarter of 2008 playing out in the markets.
That the IMF will be able to forestall the turmoil the markets fear is unlikely. The Fund's available resources don't quite cover the debts Italy and Spain must rollover in the next six months. The US Treasury has already indicated it doesn't look favorably on proposals to increase the Fund's lending capacity.
That S&P is on the verge of downgrading all European sovereigns, including France and Germany, suggests just how dangerous the situation is.
The only realistic option to avoid a meltdown is if the European Central Bank (ECB) can act as lender of last resort for the EU. It's up to Germany.
That the IMF will be able to forestall the turmoil the markets fear is unlikely. The Fund's available resources don't quite cover the debts Italy and Spain must rollover in the next six months. The US Treasury has already indicated it doesn't look favorably on proposals to increase the Fund's lending capacity.
That S&P is on the verge of downgrading all European sovereigns, including France and Germany, suggests just how dangerous the situation is.
The only realistic option to avoid a meltdown is if the European Central Bank (ECB) can act as lender of last resort for the EU. It's up to Germany.
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