Angela Merkel is sending a pretty clear message this weekend – EMU leaders will not be bullied into action just because the markets are throwing a fit about the speed of their actions. Bloomberg provides some highlights of her recent comments:
“At this time — we’re in a dramatic crisis — euro bonds are precisely the wrong answer,”
“They lead us into a debt union, not a stability union. Each country has to take its own steps to reduce its debt.”
“Politicians can’t and won’t simply run after the markets,”
“The markets want to force us to do certain things. That we won’t do. Politicians have to make sure that we’re unassailable, that we can make policy for the people.”
These are pretty staggering comments. If you’re a market speculator you can basically read her comments as such:
“We are in no rush whatsoever to solve the crisis in Europe. We will not be swayed by market crashes or panics.”
In other words, they are 100% behind the curve. The markets are sending them a very clear message. There is a very serious risk of a banking crisis in Europe. And it all stems from the fact that the Euro is inherently flawed. As Merkel and her friends fail to provide markets with a solution, they will continue to push the envelope. Let’s see who blinks first. Rich politicians have a tendency to pay attention when their personal wealth starts sinking into a blackhole that they could have closed….
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