I ran into this news yesterday, Europe promises speedy response to crisis
Can EU speedy resolve the crisis?
“Top European finance ministers vowed Tuesday to respond “speedily” to the continent’s debt crisis as Spain pleaded for help for its struggling banking system so as to avoid a full and humbling bailout”…
“The European side stated that they will respond to it speedily,” he added.
The US Treasury confirmed in a statement that Europe was a key topic of the call, saying the ministers and governors reviewed developments in the global economy and financial markets “and the policy response under consideration, including the progress towards financial and fiscal union in Europe.”
European leaders are under mounting pressure to take bold steps at an end-June summit to save the euro as eurozone states buckle under the pressure of recession and debt.
So is it possible that this the politician in EU will resolve this problem very quickly? Even though I wish, I doubt about it. To resolve the problem, what should they do?
I like this “comprehensive checklist of the eurozone challenges” from Omega Advisors (and former Goldman Sachs strategist) Steve Einhorn.
Eurozone Checklist:
-Merkel backs away from pure austerity to a balance of austerity and pro-growth policies.
-Germany accepts higher wage/consumer inflation so as to increase the relative competitiveness of weak peripherals.
-Euro bonds are approved by a means of joint Euro zone financing, including joint liability of Euro zone countries.
-The EFSF/ESM provide funds directly for bank recapitalizations.
-ESM is granted a bank charter and gets unlimited access to ECB liquidity.
-A U.S.-like FDIC program is introduced for Euro zone bank deposits.
-The ECB cuts its target rate by 25 to 50 basis points in June or July and reintroduces the Security Markets Program.
-Greek elections on June 17 bring a pro Troika coalition.
-Labor reform begins.
-There is increased fiscal integration including heightened monitoring of eurozone deficits, spending, and movement toward tax harmonization.
Steve Einhorn, vice chairman of Omega Advisors
Doug adds “Each one of these can and should be monitored by us to assess eurozone progress.”
So the politician have so many things to do down the road. We will wait and see the progress… There might be some great opportunities to buy equities when they dip significantly.
