Opinion: EU must end austerity and restructure debt – CNN Money

This is a powerful, must-read article from CNN Money. Check it out!

via Opinion: EU must end austerity and restructure debt – CNN Money.

As the ECB struggles with three massive hurdles this month to get QE into play, the media is dredging up all the ‘downside-risks’. The risks are real. In short, ‘too much austerity for too long’ has created an economic, social and political crisis. Add the following risks and the potential impact is compounded:

  • Increasing polarization of power towards the hard-left and hard-right
  • Radical Islam
  • Economic sanctions on Russia

Having spent thirty years, delivering effective strategy here’s my two cents. The only safe option is radical transformation. It’s time for the ‘big strategy and ‘big bazookas’.


ECB’s Draghi meets Merkel ahead of crunch meeting | Reuters

This is an excellent, must-read article from Reuters. Check it out!

via ECB’s Draghi meets Merkel ahead of crunch meeting | Reuters.

It looks like the Bundesbank will push for limitations on QE – this could well be the turning point in reforming the Euro – risks would be underwritten by national central banks.

It is still unclear how this restricted form of QE would work and be viewed by the financial markets. As has been witnessed with QE in other countries, it creates a lot of ‘hot-money‘ looking for a new home – it is far from clear how QE will help Southern Europe to create growth and jobs.

Anyway, the first of the three ‘January QE hurdles’ has been addressed – Germany’s Constitution Court has given the green light. Next there is the ECB board meeting, where there will be push back from Germany’s directors. Finally, there is the election in Greece and the likelihood of a debt renegotiation.

January will be a roller-coaster. But it is possible that the Eurozone could start firing some ‘big bazookas’.