EUROPEAN POOLED DEBT MORE LIKELY

The pressure being applied to Merkel by senior Bilderbergers is definitely having an effect. Merkel has given the first overt concrete sign that she is prepared to issue common European debt with Germany taking the risk.

Officials in Berlin say privately that Chancellor Angela Merkel is willing to drop her vehement opposition to plans for a “European Redemption Pact”, a “sinking fund” that would pay down excess sovereign debt in the eurozone.

...Berlin would have veto lockhold, able to ensure discipline in a way that it cannot do with the European Central Bank where it has just two votes.

The fund would entail sacrifices for Germany. The country would no longer enjoy safe-haven borrowing costs -- curently 1.48pc for 10-year Bunds -- on a quarter of its total debt. A study by Jefferies Fixed Income concluded that it would cost Germany 0.6pc of GDP each year.

Yet the authors insist that any such costs will be outweighed by massive relief as Europe finally breaks the logjam of the last two years and offers southern Europe a chance to claw its way out of perpetual depression. Mrs Merkel is beginning to agree.

[source : Debt crisis: Germany signals shift on €2.3 trillion redemption fund for Europe, The Daily Telegraph, http://www.telegraph.co.uk/finance/financialcrisis/9330398/Debt-crisis-Germany-signals-shift-on-2.3-trillion-redemption-fund-for-Europe.html, 14/06/2012]

This is not quite Eurobonds.

And this may be too little too late.

And Merkel may still get all the blame if and when the Euro collapses.

A very interesting article appeared in the FT yesterday. I do not have full access to all article in the FT but Alex Tsipras wrote a piece for the FT. WSWS looked upon this as a signal to the European banking oligarchy as a bowing down before them, rather like Rand Paul to the Republican Party.

“Lest there be any doubt,” he proclaims, “my movement—SYRIZA—is committed to keeping Greece in the eurozone.”

...Rather than oppose handing further monies to the bankers, he says that recapitalising Greek banks, “with loans from the troika”, will be done “transparently”.

For years SYRIZA had a commitment to nationalise the banks as part of its programme. Now it is set on recapitalising them using money from the troika. This makes a lie of its threat not to honour the Memorandum and the savage austerity measures agreed as a precondition for the €110 billion bailout of its banks.

SYRIZA still wants the EU, ECB and IMF to fund the banks, and he who pays the piper always calls the tune. Little wonder that in Greece’s major conservative daily, Kathemerini, Tsipras adds that his party will not approach Greece’s foreign creditors “to pick a fight, but to convince them.”

...SYRIZA has no intention of making a fundamental challenge to this set up. Its numerous apologists in the fake left groups, many of which have factions in the coalition, claim that SYRIZA wants to cancel the debt. But this is a lie. Its ten point programme urges only a “moratorium on debt servicing” and “Negotiations for debt cancellation”—of only some of the debt—with “regulation of the remaining debt”.

[source : SYRIZA’s Tsipras pledges to save Greek and European capitalism, WSWS, http://www.wsws.org/articles/2012/jun2012/tsip-j14.shtml, 14/06/2012]

So there are moves to keep the Euro together. Merkel is moving towards some kind of pooled debt solution (but will demand further integration but that's what they all want anyway so that won't be a problem), and now even Tsipras is writing in the FT of all papers that he will keep Greece in the Euro.

But as I asked a few weeks ago; for Tsipras, is Europe more important than Greece?

In other words, does Tsipras believe that Greece should suffer some kind of austerity, less than now but still some, to stay in the Euro, rather than give the banks and bankers hell and not pay a single Euro of the alleged Greek debt and leave the Euro?