Eurozone: another day, more problems

Contagion is spreading like the plague.  Austria, Hungary, Finland and the Netherlands have been added to the list and there is grave doubt as to the ability of France to retain its AAA rating.  France and Germany are at odds over the role of the ECB, well nothing new there.  It is looking very ominous.  As Schroders stated yesterday: Europe is heading for an almighty crash.

In Greece, two of the three party leaders supporting the new Greek coalition government have rejected calls to sign up to strict EU reforms - essential if the country wants to receive an $8bn rescue loan to stave off bankruptcy.  The leaders assert that they do not need to sign a piece of paper, the votes in parliament should be sufficient.

There are mutterings in Italy as the new government is revealed.  It does not contain a single elected politician.

In the EU the ugly sisters have been busy at the European Parliament:

It looks like European Union leaders have told the European Parliament that they are pushing for greater intervention into countries' governance.

Jose Manuel Barroso said that for countries running excessive deficits he would propose giving the European Commission power to make recommendations on draft national budgets before they are voted on by parliaments. That will go down badly with UK euroskeptics.

Herman Van Rompuy said governments should also consider giving a central eurozone body the power to more directly intervene in the budget process of member states.

(I assume Barroso is referring to all EU countries and Van Rompuy to eurozone nations.)

Germany is prepared to cede some national sovereignty to the EU to achieve closer economic and political ties. Chancellor Merkel added that the EU cannot solve its problems without a treaty change. So much for the views of Mr Clegg.

Four excellent articles pertaining to the role of the ECB:

http://www.spiegel.de/international/europe/0,1518,797666,00.html

http://www.telegraph.co.uk/finance/financialcrisis/8894995/France-and-Germany-clash-over-role-of-ECB.html

http://www.telegraph.co.uk/finance/financialcrisis/8894366/Dont-blame-the-European-Central-Bank-for-Europes-failures.html

http://www.telegraph.co.uk/finance/financialcrisis/8895207/Latin-showdown-with-Germany-over-ECB.html

All very depressing.  It really is a total shambles.

Finally an interesting article from Spiegel: Chinese investors take advantage of Greek crisis.
http://www.spiegel.de/international/europe/0,1518,797751,00.html