EUROZONE / GREECE: Athens...On The Brink Of A Nervous Breakdown.

TELEGRAPH/ Long Read / N. Meo

    The Greeks were among the most enthusiastic supporters of the euro when they joined 10 years ago.
    But now, a recent opinion poll reports that 26% of voters want to get out of the euro.
    Two years ago polls reported that only about 8% of the electorate opposed membership -- nearly all of them Communists.
   One Greek said: "Our destiny is controlled by foreign bankers now, thanks to our idiot politicians."
   But for most Greeks, leaving the euro is unthinkable. "Joining was a historic step for us – Greece has been struggling for two centuries to rejoin the West."

EUROZONE: Surprize Early Morning Agreement Reached With Interest Rate Cut For Greece... But Not For Ireland.

NYTIMES/ S. CASTLE
2 Screen Read...Combined/

   Europe's leaders came to an early AM agreement for new measures to calm the eurozone debt crisis.
   Debt plagued Greece will get an interest rate cut and the bailout fund will get larger to 440 billion euros ($608 billion usd)and more flexible.
   But France and Germany, still worked-up over over Ireland's stubborness on aligning corporate tax rates, will not offer it the same interest rate deal as Greece. Ireland’s corporate tax rate of 12.5 % is below the EU's.

POLAND / CZECH REPUBLIC / HUNGARY: EU Debt Crisis Is Convenient Excuse To Delay Euro Adoption.

BLOOMBERG / A. Lozasz

   Some analysts claim several Eastern European nations are using the Greek/Ireland/Portugal/Spain debt crisis to delay implementing needed economic restructuring and joining the eurozone.
    Seven of 10 former communist countries that joined the EU since 2004...haven't adopted the euro.
    “It’s a convenient excuse and it may distract away from some of the measures they need to do at home to sort out budget deficits and structural changes,” said economist Nigel Rendell. “It’s welcome news in some of the euro-skeptic countries.”

EUROZONE: A 2 Or Even 3 Part Euro May Be Developing.

NYTIMES/ STEPHEN CASTLE :
   "...a senior European Union official acknowledged for the first time that a two-speed euro zone might now be developing, with Germany racing ahead while debt-laden countries on the Continent’s periphery battle stagnation."
  AND: "Significant economic differences have always existed between the euro zone’s northern and southern countries. But some economists now believe that, exacerbated by the shocks of the financial crisis, these multiple differences threaten the future of the euro itself."

SPAIN: Prisoner Of the Euro; 4 Endgame Scenarios; Roubini Calls It The "Big Elephant" In The Room.

NYTIMES/ OPINION/ ECONOMIST PAUL KRUGMAN:
    "The best thing about the Irish right now is that there are so few of them. By itself, Ireland can’t do all that much damage to Europe’s prospects. The same can be said of Greece and of Portugal, which is widely regarded as the next potential domino.
    But then there’s Spain. The others are tapas; Spain is the main course."
AND:   "Spain would be better off now if it had never adopted the euro — but trying to leave would create a huge banking crisis, as depositors raced to move their money elsewhere. Unless there’s a catastrophic bank crisis anyway — which seems plausible for Greece and increasingly possible in Ireland, but unlikely though not impossible for Spain — it’s hard to see any Spanish government taking the risk of “de-euroizing.”

ALSO ON TOPIC : Economists Speculate on a Euro endgame; 4 scenarios.
By Peter Boone and Simon Johnson.
 http://baselinescenario.com/2010/11/28/the-eurozone-endgame-four-scenarios/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+BaselineScenario+%28The+Baseline+Scenario%29

AND:  Economist Nouriel Roubini is calling Spain the “big elephant” in the debt crisis because there may not be enough money to bail it out. “In Spain, in my view, the eventual fiscal costs of cleaning up the financial system are going to be much larger than have been so far estimated by the government,” Roubini said. “As we saw, the stress tests were not stressful enough, if not a total fudge.”
SEE:  http://www.bloomberg.com/news/2010-11-29/roubini-says-portugal-quite-likely-to-need-funding-update1-.html

EUROZONE: Experts Reassess EU Break-up Risk.

NYTIMES/ JACK EWING and JAMES KANTER/
    This news blog often focuses on the intersection of economics and politics.
   Today's link from the NYTIMES not only updates the Irish debt bailout crisis...but also poses some intriguing "what if" scenarios about the stability of the euro and the EU itself.
  Banker Martin Taylor states: “If weaker countries don’t behave in a way necessary to sustain the euro zone, it will break up.”
 But for many experts, a split in the euro zone is too horrible to contemplate.

EUROZONE: Bears Suffer Losses As Euro Bounce Hits 5.99% Since May.

BLOOMBERG/ Bo Nielsen and Catarina Saraiva/
    BLOOM: "The euro’s rally from a four-year low in June resulted in losses for followers of bears from Paul Volcker to Dennis Gartman. Since Volcker, the 82-year-old former Federal Reserve Chairman, said May 13 the euro may face “disintegration,” it’s up 5.99% against the dollar. Traders who held off purchasing the common currency on June 18, when Gartman called it “doomed,” missed a 7.3 % return. Buying on May 6, when European Central Bank President Jean-Claude Trichet said the euro was a “good store of value,” earned 5.28 %."
But some pessimists persist... like Jim Rogers who says the gains won’t last. They feel that the currency area will split under austerity measures undertaken by Greece, Spain, Portugal and other nations and growing divisions with stronger member states like Germany.

CZECH REPUBLIC: New PM Necas Balking At Euro Adoption.

BLOOM/     New PM Petr Necas, 45, won’t commit to a target date for joining the euro despite pressure from exporters hurt by a rising currency, the koruna. “The government program will not include any target date or a promise to join the euro area,” Necas said "Exports are important, but this country is not only a country of exporters. With the current state of the euro zone, it wouldn’t be politically wise to say that we will join on a certain date,” Necas said. “After all, nobody knows what will happen with the euro zone in two or three years, so a cautious approach is appropriate.”

EUROZONE: Estonia Gets OK To Use Euro.

NYTIMES/    Meeting in Brussels, Europe’s 27 governments lauded the “sound economic and financial policies” achieved by Estonia and said it would drop the kroon for the euro on Jan. 1, 2011. Olli Rehn, commissioner for economic and
monetary affairs said “Estonia’s admission is a sign to other countries that our aim is to continue enlarging economic and monetary union through the euro.” 
“It’s a great day for Estonia,” said PM Andrus Ansip. “We prefer to be inside, to join the club, to be among decision makers.”

EUROLAND: "The Euro Is Doomed" Claims An Analyst As It Sinks To 18-Month Low.

BLOOMBERG/         “The euro is doomed,” claims Andrew Wilkinson, analyst at Interactive Brokers Group. “It’s like a clown without its makeup. The strains among the partners are becoming clear and it’s becoming harder to see global growth not being threatened by this.” This observation came after the euro touched a new low, its weakest since October 2008. Reports also surfaced that French President Nicolas Sarkozy threatened to pull out of the euro unless German Chancellor Angela Merkel agreed to back the EU's bailout. The euro has lost 9 % this year. Some speculate it will hit $1.16 per USD... by year's end.  Central Bank President Jean-Claude Trichet wants..." a need for a quantum leap in the governance of the euro area. There needs to be major improvements to prevent bad behavior, to ensure effective implementation of the recommendations made by peers and ensure real and effective sanctions in the case of breaches." He said the current crisis may be worse than the Great Depression.

EUROLAND: On The Weakening Euro.

NYTIMES/    The euro's continuing decline is making Euroland uncomfortable as it underlines Europe’s underperformance vs the U.S. “It’s more of a euro weakness than a dollar strength,” says Ulf Schneider. “The whole world is watching, and there is some doubt about the euro.” Analysts predict the euro will continue declining in the next year as the U.S. grows quicker than Europe. The euro peaked near $1.60 in July 2008 and it plunged to $1.2453 in November 2008.

EUROZONE: Speculators Seek Next Indebted Nation For Euro Bets.

NYTIMES/     Now that Greece has submitted its third plan to raise taxes and cut spending, this time by $6.5 Billion USD, some banks and hedge funds are looking at the other indebted nations in the so-called "PIIGS" group-- like Portugal, Spain or Italy to use to bet against the euro. The debt crisis may also change the financial and political balance of power in Europe with likely rescuers Germany and France soon dictating fiscal policies.

EURO: Economists' Poll Says Greek Crisis Will Delay Further Adoption.

REUTERS/  A Reuters poll of 44 economists speculates that the current Greek financial crisis has probably delayed euro adoption by at least a year for the biggest emerging Eastern and Central European economies like Poland and the Czech Republic.

THE E.U: Rethinking The Lure Of The Euro.

NYTIMES/ The high price of monetary union and Greece's current financial troubles are forcing some nations to rethink joining euroland. “Countries like Estonia and Latvia were once desperate to get in,” said researcher Alf Vanags. “The euro is not looking so attractive now.”  Governments fear being unable to pay for expensive social programs required by citizens and staying within the euro zone’s strict debt limits.

THE EU: The "PIIGS" Debt Saga Continues.

NYTIMES/ Analysis By Steven Erlanger/ "What began with worries about the solvency of Greece in the face of high deficits, fake budget figures and low growth has quickly become the most severe test of the 16-nation euro zone in its 11-year history..."

THE EU: Euro's First Big Test Underway.

NYTIMES/ANALYSIS/  The 16 countries that use the euro are facing a new reality: their 10-year-old common currency is being challenged by the diverse economic and financial conditions of its members. “... It is clear this year that global macro risk will come from Euroland and not the U.S.,” says a financier.

CURRENCIES: Euro Drops Again Vs USD On Greece, Spain, Portugal, Italy Budget Fears.

NYTIMES/
After a decade of growing debt, investors' confidence in Greece is jittery. Some economists believe that Greece’s budget troubles pose a challenge for the euro, which Greece adopted in 2001. The currency continues sinking to recent lows against the dollar and yen.  Many investors foresee a domino effect and are fleeing bond markets in Portugal, Spain and Italy where budget deficits have grown out of control.