Euro Area

[gaelic cowboy]

It would seem half of the Euro countries have joined Finland in demanding cash guarantees from Greece, while Merkel and Sarkozy dream of "eurobonds". I cant understand what dream world the leaders of largest euro countries are living in? If the economies of Southern and Northern Europe have so different level of strength, how can they think that the North should just give everything up they have achieved with hard work, so the South can live as they please.

Cant we just have a monetary Union without some delusional dreams of Federal State, when it is clear that majority of people in most European countries dont want that?

Not really man the problem is that countries without there own currency are being attacked/shrewdly bet against and cannot use the usual means of preventing this problem Inflation/Devaluation.

In effect the markets have quite rightly found that internal devaluation ie reduction of living standards or implementation of austerity does not work in a currency union hence the bailouts.

The bondmarkets and interbank lending is forcing the ECB to act more like a normal central bank and less like it has up to now, hence the buying of bonds and the extension of liquidity to weak banks.

Unfortunately the more it acts like a proper central bank the less people in the North like it.