Recent installments in the fall of the European Union

Spiegel Online reports on IMF chief Christine Lagarde's speech in Berlin criticizing German Chancellor Merkel's approach to the European economic and currency crisis: Stefan Kaiser, Madame Oui liest Merkel die Leviten 23.01.2012. The article also comments on the ways Angie's recklessness is isolating Germany in world opinion. They also talk about Lagarde's private meeting with Angie on Sunday, where the areas of agreement were evidently so small that they didn't even issue a standard joint statement afterward talking about their "frank discussions" or whatever other euphemism they might have chosen.

The IMF claims that Spain may face sovereign debt default if Angie doesn't allow the boosting of emergency bailout funds for eurozone sovereign debt: Juan Gómez El FMI ve riesgo de "crisis de solvencia" en España si no se amplía el fondo de rescate El País 23.01.2012.

Plus, the Spanish economy is shrinking, while the new conservative government applies even more severe austerity measures than the previous Socialist government did: Alejandro Bolaños, El Banco de España augura una recesión del 1,5% en 2012 El País 23.01.2012.

Greece is trying to get its private creditors to accept reality and take a sufficient default that will get Greece's debt down to something much closer to a sustainable level: Daniel Flynn and Gernot Heller, Germany, France press for rapid Greek debt deal Reuters 01/23/2012:

Sources close to the talks told Reuters on Monday that the impasse centred on questions of whether the deal would return Greece's debt mountain, currently over 350 billion euros (293 billion pounds), to levels that European governments believe are sustainable.

"There will likely be an updated debt sustainability analysis that will be discussed at the Eurogroup," a banking source in Athens said, requesting anonymity. "Talks will continue this week. The aim is to have an agreement by late next Monday." ...

German Chancellor Angela Merkel said there was no question of extending Greece a bridging loan if talks with the private sector dragged on further.

The euro pushed up to its highest level against the dollar in nearly three weeks on hopes Greece and the banks could overcome differences and seal a successful debt swap.

A cheery headline from the Irish Examiner: Troika warns of financial ‘bomb’ in Dublin by Paul O’Brien 01/23/2012. This has to do with payment to bondholders of the former Anglo bank, now owned by the Irish government and called IBRC:

Anglo, now known as IBRC, is due to repay €1.25 billion to bondholders on Wednesday and Transport Minister Leo Varadkar said householders would suffer if it didn’t.

Mr Varadkar said any decision to burn bondholders would impact on Ireland’s reputation, increase borrowing costs for banks and semi-state companies, and ultimately lead to higher mortgages and household bills.

He said the troika of EC, ECB and IMF, which is supplying Ireland’s bailout loans, had issued a stark warning to the Government about the consequences of IBRC not repaying the money.

"What they’ve said really is that: 'It's on your head. We don't want you to default on these payments. It is your decision ultimately. But a bomb will go off, and the bomb will go off in Dublin, not in Frankfurt.'"

Organized labor is raising a stink over this particular issue:

But Paul Sweeney, chief economist at the Irish Congress of Trade Unions, described the minister’s claims as "nonsense", while Independent TD Finian McGrath said the public did not want to see the bondholders repaid and it was time for the Government to "stare down" the ECB.

It’s not just trade unions and opposition figures who have urged the Government to burn the bondholders. Fine Gael TD Peter Mathews last week secured Dáil time to make his case for halting Wednesday’s repayment, saying Ireland was now "at a moral crossroads".

It's good to see resistance from labor to the dictates of the "troika" demanding that public policy cater to the 1% at the expense of everyone else.

Another piece from the Irish Examiner, this one likely to cause heart palpitations among American Republicans if they saw it: Elffie Chew, Ireland may be first EU state to sell Islamic bond 01/20/2012.

Tags: eu, euro, european union