The draft Eurozone plan

It is here (and further detail here), via Paul Krugman, who rightly slams it.  Matt offers comment, so does Wolfgang, many more details and updates here.  If you had told me it was an Onion-like satire of all the previous plans, and not an actual serious plan at all, I would have believed you.  Here is one of the stranger, funnier, sadder, and more Straussian paragraphs:

6. All other Euro countries solemnly reaffirm their inflexible determination to honour fully their own individual sovereign signature and all their commitments to sustainable fiscal conditions and structural reforms. The Euro area Heads of States or Government fully support this determination as the credibility of all their sovereign signatures is a decisive element for ensuring financial stability in the Euro area as a whole.

In other words: “We know you are worried about Italy and Spain so we promise you that they are fine.”  There is a good deal of ah, optimism about the real side of these economies:

9. All euro area Member States will adhere strictly to the agreed fiscal targets, improve competitiveness and address macro-economic imbalances. Deficits in all countries except those under a programme will be brought below 3% by 2013 at the latest…

Here’s an important sentence, and I view the exclusive reference to “Member States” as throwing in the towel:

As a follow up to the results of bank stress tests, Member States will provide backstops to banks as appropriate.

It is also promised that the bailout model for Greece won’t be used again.

Time to blast the Brahms!  In all fairness to the plan, maybe that’s the only disc in anyone’s collection these days.

Addendum: “The proposed expansion of the EFSF’s role would have to be ratified by national parliaments, and could fall foul of critics in Germany, the Netherlands and Finland.”


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