The New York Times: Reports that Germany and France have agreed that the EU Banks will be bailed out. The problem again folks is there is no actual plan, nice words, but its getting bit boring, the July Agreement on Greece still has not gotten total approval from the 17 Eurozone Countries, h-ll there is still a chance that it might not get approval. The EU leaders always seem behind the curve when it comes to the Eurozone crisis. The black hole that is Greece is still out there, the Troika of the EU/IMF/ECB still have not given the green light for the next Greek bailout of eight billion euros. Also over the weekend we have seen the downgrade of Italy and Spain, twelve UK financial institutions have been downgraded, but this is more to with the fact that the Credit Agencies think that the UK will not again bailout smaller UK banks. The banking downgrade has also effected Portugal. The contagion of the banking system has started folks, the French/Belgium Bank Dexia has gone bust, thus the question will contagion move faster than EU politicians. The French and German leaders have stated they need to talk to fellow EU leaders, thus more meetings, and late calls before markets open, thus more turmoil in the banking and stock markets. Its all down to debt folks, sooner or later Western Europe will have to deal with the fact that the welfare state is killing Europe, the economic model after 1945 is falling apart, at its most basic, you have older generation, a smaller pool of younger workers, and the taxes don’t match the costs of the welfare structure, in less you deal with that this crisis will never end, just endless debt and stagnation.
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