Lender of First Resort?

How long have the EuroCrats been trying to solve the EuroCrisis?

Too long.

Has the situation become more high, good, better?

No.

Has the situation become more low, bad, worse?

Yes.

DON'T DO THAT!

My constant complaint with everything that has been said or written about the crisis is that it is descriptive not prescriptive.  The EuroCrats keep toiling away, clutching retentively to the process of applying Band-Aid after Band-Aid to the situation with no resolution.

Now it is time to rethink the way you rethink the problem and the solution.

The phrase that suddenly jumped out at me is "Lender of last resort."  Why?

Let's try to rethink a possible solution.  This is not an answer. This is a question.  The question is very simple.

Will this work?

Forgetting the institutions we have for just a moment, The IMF, The ECB, The EFSF and look for a metaphorical, UEB.  The Unified European Bank.  And put aside, for a moment the declamation, "We can't do that because....."

Will this work?

Make the UEB the European Lender of First Resort.

The UEB is the first purchaser of Greek Bonds, Portugal Bonds, French Bonds, German Bonds, &c.  The UEB ignores bond ratings.  They become irrelevant.

They buy the bonds (for the purposes of discussion only) at 5%.

The UEB then becomes a reseller, reselling the bonds at, say 6%.  Yes, I know this is less than they are paying out.  This is the subsidy in lieu of the bottomless pit of the bailout solution.

The bonds, offered by the UEB and backed by the EuroNations are more attractive than say Greek Bonds or Italian Bonds, or now even German Bonds. (Remember the German Bond Sale Gone Bad?)

However, "Austerity without Growth is not a solution."  Slim Fairview.  From The Quotations of Slim Fairview.

Now you have Step Two.

You can choose:

Plan A:  Growth and Economic Development.

Plan B:  Economic Development and Growth.

That, of course, is a trick question.  You cannot have growth without economic development.

Privatisation is not a dirty when when, for example, the Greek Bus Driver stops driving for the metaphorical Athens Metropolitan Transit Authority and begins driving for the Athens Bus Company--and the Greek Bus Driver now owns stock in the Athens Bus Company.

The Greek Bus Drivers goes from a paycheck (tenuous, not guaranteed, smaller than it was due to austerity measures, and non-existent if he gets fired) to earning a Paycheck and a Profit.

He not only receives a piece of the pie, he receives a piece of the profits from the bakery because he owns a piece of the bakery.

This may be a radical departure.  However, if the EuroCrats continue to discuss measures that have been implemented repeatedly and have repeatedly failed and failed miserably to resolve the crisis, it may be time for them to rethink the way they rethink the problem and start thinking about some new solutions.  New ideas.  New methods.

And please.....ask Angela Merkel to step down.

Bon chance.

Sincerest regards,

Slim

If you find anything here to be helpful, please don't hesitate to send me a really tricked out Mac Book and to tuck a few dollars into the envelope along with the thank you note.  Slim.

Bob Asken
Box 33
Pen Argyl, PA 18072
Etats Unis

Slimfairview@yahoo.com

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All Rights Reserved.