It is important to know where we are…

If we do not want to loose a Generation, we better solve this problem SOON !!!

( Fuente: El País )

Alguien piensa finalmente hacer algo con este problema ¿?¿?

Seremos capaces de acometer una reforma laboral de verdad o pensamos perder toda una Generación !!!

Courtesy of George Soros

“What lies ahead ? Economic deterioration and political and social disintegration will mutually reinforce each other. During the boom phase the political leadership was in the forefront of further integration; now the European leaders are trying to protect a status quo that is clearly untenable. Treaties and laws that were meant to be stepping stones have turned into immovable rocks. I have in mind Article 123 of the Lisbon Treaty, which prohibits the ECB from lending money directly to member states. The German authorities, notably the Constitutional Court and the Bundesbank, are dead set on enforcing rules that have proved to be unworkable. For instance, the Bundesbank’s narrow interpretation of Article 123 prevented Germany from contributing its Special Drawing Rights to a rescue effort by the G20. This is the path to disintegration. Those who find the status quo intolerable and are actively looking for change are driven to anti-European and xenophobic extremism. What is happening today in Hungary—where a far-right party is demanding that Hungary leave the EU—is a precursor of what is in store.

The outlook is truly dismal but there must be a way to avoid it. After all, history is not predetermined. I can see an alternative. It is to rediscover the European Union as the “fantastic object” that used to be so alluring when it was only an idea. That fantastic object was almost within reach until we lost our way. The authorities forgot that they are fallible and started to cling to the status quo as if it were sacrosanct. The European Union as a reality bears little resemblance to the fantastic object that used to be so alluring. It is undemocratic to the point where the electorate is disaffected and it is ungovernable to the point where it cannot deal with the crisis that it has created.

These are the defects that need to be fixed. That should not be impossible. All we need to do is to reassert the principles of open society and recognize that the prevailing order is not cast in stone and rules are in need of improvement. We need to find a European solution for the euro crisis because national solutions would lead to the dissolution of the European Union, and that would be catastrophic; but we must also change the status quo. That is the kind of program that could inspire the silent majority that is disaffected and disoriented but at heart still pro-European.

When I look around the world I see people aspiring to open society. I see it in the Arab Spring, in various African countries; I see stirrings in Russia, and as far away as Burma and Malayasia. Why not in Europe?

To be a little more specific, let me suggest the outlines of a European solution to the euro crisis. It involves a delicate two-phase maneuver, similar to the one that got us out of the crash of 2008. When a car is skidding, you first have to turn the steering wheel in the direction of the skid, and only after you have regained control can you correct your direction. In this case, you must first impose strict fiscal discipline on the deficit countries and encourage structural reforms; but then you must find some stimulus to get you out of the deflationary vicious circle— because structural reforms alone will not do it. The stimulus will have to come from the European Union and it will have to be guaranteed jointly and severally. It is likely to involve eurobonds in one guise or another. It is important, however, to spell out the solution in advance. Without a clear game plan Europe will remain mired in a larger vicious circle in which economic decline and political disintegration mutually reinforce each other.”

Time to act if we don´t want to destroy our beautiful Union…

700 billion euros of European bank debt comes due this year, with about 200 billion euros coming due the first quarter, according to Bloomberg data. How are they planning to pay it ¿?¿?¿?

From Mish Shedlock

UK prime minister David Cameron was ready to sign on the Merkozy treaty dotted line if he got exceptions to some UK-unfriendly rules.

When Sarkozy refused to go along, the two got into a nice verbal feud, and Cameron finally said what he should have said months if not years ago as reported by Yahoo!Finance in New treaty Splits European Union

“What was on offer is not in Britain’s interest so I didn’t agree to it,” he told reporters in Brussels.

“We’re not in the euro and I’m glad we’re not in the euro,” he said. “We’re never going to join the euro and we’re never going to give up this kind of sovereignty that these countries are having to give up.”

Now, what’s so hard about that? Cameron’s next move should be to tell the EU to take all of their rules and shove them too.

Hungary Opts Out, So will Sweden, Czech Republic Undecided

Swedish Prime Minister Fredrik Reinfeldt signaled after the meeting it was unlikely his country would join the accord.

“It would be very odd signing up to a treaty pointing out as if we were a eurozone country,” he told The Associated Press. “And that was never the aim.”

The governments signing onto the new treaty will have to agree to allow unprecedented intervention in national budgets by EU-wide bodies.

According to a statement issued after the meeting broke up, governments participating in the agreement will need to have balanced budgets — which is counted as a structural deficit no greater than 0.5 percent of gross domestic product — and will have to amend their constitutions to include such a requirement.

The treaty will include an unspecified “automatic correction mechanism” for countries that break the rules, the statement said.

In addition, countries that run deficits larger than 3 percent will face sanctions.

To prevent such deficits, countries will have to submit their national budgets to the European Commission, which will have the authority to request that they be revised. Countries will also have to report in advance how much they plan to borrow.

Extreme Legal Complications Already

Via Google Translate please consider this snip from Spiegel Online

The new agreement between the 23 EU countries, according to experts, however, could lead to numerous legal problems, because the rules must not contradict rules of the EU treaties.

Cameron calls into question whether the proposed new fiscal union is allowed to use EU-institutions. “The institutions of the European Union are the European Union, the 27,” said British Prime Minister.

Expect Discord to Rapidly Spread

The simple solution to Cameron’s legal problem is for the UK (and any other country with the same objection) to leave the EU. All it would take is a voter referendum.

Meanwhile, the discord between Cameron and Sarkozy is going to quickly spread elsewhere.

The more details this new treaty adds, the more discord there will be. The entire package will blow up in May (if not long before that) if any country or the German supreme court insists on a voter referendum.

From: Cullen Roche ( pragmatic capitalist )

“It’s still uncertain if this week’s summit will finally resolve the Eurozone sovereign debt crisis, but early reports certainly leave some doubts.  If it should turn out that EMU leaders are not ready to fire a bazooka then the first quarter of next year will almost certainly fore the issue.

As Credit Agricole recently noted (see the chart below), the debt issuance calendar in early 2012 is heavy.  But it’s particularly heavy for Italy.  As we all know by now, Italy is where the road ends in this crisis.  If Italy defaults the EMU as we know it will never be the same.  In 2012 Italy has total debt redemptions of almost $300B.   In the first 4 months of the year Italy has redemptions of $115B.   This is going to kick the EMU crisis into overdrive early next year.  If we don’t hear a sustainable and permanent fix later this week then prepare yourselves for early next year.  This crisis is almost certain to reach a new crisis peak as EMU debt redemptions force the issue”.

Source ( www.oftwominds.com )

Where is the SOLUTION ¿?¿?¿?