Is Germany about to lose its best friend?

Will Germany lose its best friend in the Upright Brigade? And if so, will this encourage Greece, Portugal, Ireland, Italy and Spain etc. to question Germany-encouraged austerity policies? Spain’s prime minister has already said that the country will not meet its deficit target this year — and that he’s not too bothered about missing it, either! On the question of austerity, Germany is looking more isolated these days. Will it soften its stance and help provide a bullish case for Europe

There is No Closure in Greece Whatsoever

Despite the Greek parliament’s approval of austerity measures, there is still considerable uncertainty in the Greek situation. This post outlines many of the issues still up in the air

Is Finland Really A Closet Member Of The Eurozone Periphery?

The country’s debt dynamics are far from unsustainable at this point, but given the weakening in the country’s export performance and the steady unwinding of the housing boom we can now anticipate I would expect growth to be weaker than either the EU or the IMF are currently anticipating, and pressure on the country to increase fiscal spending to maintain expectations to rise, with the implication that pressure on the Finnish spread over 10 year German bunds will continue, as the country risks drifting off from being part of the core towards the growing periphery, at least in the eyes of investors

Officially Eurobonds are taboo but behind the scenes nothing has been ruled out

Almost exactly one year ago I wrote the following: In practice, you could have sovereigns conduct a ‘sovereign debt swap’ whereby the ECB buys an agreed-upon portion of the existing debt from the sovereigns and then uses these funds to back the supranational debt. In future, the same agreed upon percentage of debt would be

Finland wants two-tier euro zone with more power for AAA countries

With sovereign interest rates in the euro zone rising, Finland is feeling the contagion effect despite being only country in the euro zone except tiny Luxembourg which is both AAA-rated and meets all of the Maastricht Treaty requirements.

Last week we learned of German plans to change the European Constitution for greater fiscal integration by 2013. The goal was to give countries like Germany and the Netherlands where government deficits have been low, a say in the internal national budgetary debates in other countries where government deficits have been higher. Having seen this move by the Germans, the Finns have a proposal of their own

“Germany is the core, everything else is secondary”

The Wall Street Journal’s Matt Phillips describes the turmoil in European sovereign bond markets. He says some traders tell him that they now consider countries like France a part of the periphery and are pricing it as such. This risk-off sentiment has spread throughout the euro zone to countries like Finland which is the only country in the euro zone except Luxembourg which is both AAA-rated and meets all of the Maastricht Treaty requirements.

Video below

Why I Won’t Support More Bailouts

The following editorial by Timo Soini, the head of the True Finns party in Finland, on perceived corporatism in the EU bailouts of the eurozone periphery appeared in Monday’s Wall Street Journal. We are reprinting it here because the original version was posted and then inexplicably edited, excising key bits of the argument. Below, the areas which are highlighted are the excised bits. (hat tip Karl Denninger.)

Fiddling while the Periphery Burns

After more than a year since the European debt crisis began, officials have still failed to resolve it. They raised expectations for a “grand bargain” only to crash them on the shoals of political reality. The March 24-25 Summit was to finally provide closure and yet the situation remains fundamentally unresolved.

Finland: Don’t Push Irish into Bailout

From some reports, you get the impression that Finland is saying "no aid for Ireland." However, from a Reuters story it seems more that the Finns’ official position is more that the Irish should not be pushed into a bailout by the Germans and the EU. Finland is against putting pressure on Ireland to quickly

Bubble Trouble In Finland?

by Edward Hugh According to an intriguing article I read in Bloomberg recently an alert signal has been sounded due to the fact that house prices in the Scandinavian countries have been rising very rapidly of late. Judging by what they explain what is now going on in the housing markets of Norway, Sweden and

The Swedish banking crisis response or the bailout hustle?

I referenced Matt Taibbi’s latest work at Rolling Stone “Wall Street’s Bailout Hustle” recently when talking about a movie on Ponzi schemes and fraud that aired on 60 Minutes. I liked the piece and recommend you read it – fully aware of the awaiting hyperbole Taibbi uses to hype his case. The interesting bit is