1. Lender of First Resort?
How long have the EuroCrats been trying to solve the EuroCrisis?
Too long.
Has the situation improved?
No.
Has the situation become 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.

2. 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, 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
Slimfairview@yahoo.com
Copyright (c) 2011 Slim Fairview