The demand from world leaders for Eurozone countries to take swift action to contain the region’s debt crisis has been intensifying. Part of the solution to solving the crisis has included setting up the European Financial Stability Facility (EFSF), but the number of troubled nations and amount needed for stability was apparently grossly underestimated, and “many contributing countries are now unable to increase their commitments for political reasons or because they could jeopardize their own credit ratings,” according to the Financial Times.
Another element to attempt to gain control of the financial wildfire will include debates among Eurozone leaders regarding, “wider-ranging reforms to establish more centralized EU authority over national economies. Herman Van Rompuy, the European Council president, will outline proposals at the October summit, including ideas for an EU finance minister and new bonds collectively backed by all 17 Eurozone countries.”
The participation of more fiscally stable counties such as Germany, the Netherlands, Finland and Slovakia is viewed as “essential to dealing with the two things that most threaten the survival of the Eurozone: a meltdown of the banking system, perhaps starting in France, and a run on Italian and Spanish bonds.”
European officials announced that the EFSF needs to increase their funding from 440 billion euros to 3 trillion euros. Since there are some Eurozone countries who have already indicated that they aren’t politically in a position to contribute more, the IMF is calling on member nations to contribute more in an effort to help bail out troubled Eurozone countries. A brief reminder there that the U.S. is part of the IMF. In addition, there will also be a “large-scale recapitalization of European banks and a plan for an ‘orderly’ Greek default,” according to the UK Telegraph.
The fact that something is being done, anything at all, seemed to make investors happy. An AP article posted at One New Now noted that the vows of Eurozone leaders to step up their efforts to resolve the debt crisis apparently caused stocks to have their largest gains in two weeks.
Meanwhile, Standard and Poor’s may be facing a court case, according to the Financial Times. Not only are U.S. officials wanting the S & P investigated in relation to home mortgage issues, but also because they downgraded America’s credit rating.
Earlier in the month Former German Chancellor Gerhard Schroeder insisted that the only way that the Eurozone could going to avoid economic collapse would be to surrender their national sovereignty and form a “United States of Europe,” according to CNBC The idea isn’t a new one in relation to the Eurozone’s financial crisis. Chief Economist Simon Tilford of The Center for European Reform told the New York Times back in May of 2010 that major structural changes are necessary in order to resolve the European debt crisis.
But as the crisis continues to blaze out of control, no one in mainstream media seems to be questioning how long the rest of the world can continue bailing out the Eurozone, much less if it can. But then ushering in a new one world reserve currency and bank regulatory system would probably encounter less resistance in the event of a global economic disaster. And such an event would also have the potential to lead the rest of the nations of the world into surrendering their national sovereignty in exchange for, perhaps, the illusion of the stability, peace and safety of a New World Order in a One World system.