Wednesday, October 12, 2011

Dancing Through Minefield

From Project Syndicate-George Soros: the leaders of Europe all understand now they can not  “Kicking The Can Down The Road” . Here is Soros says the European countries how to dance through with a narrow minefield, a radical step;
Let me stake out more precisely the narrow path that would allow Europe to pass through this minefield. The banking system needs to be guaranteed first, and recapitalized later. Governments cannot afford to recapitalize the banks now; it would leave them with insufficient funds to deal with the sovereign-debt problem. It will cost much less to recapitalize the banks after the crisis has abated and both government bonds and bank shares have returned to more normal levels.
Governments can, however, provide a credible guarantee, given their power to tax. A new, legally binding agreement – not a change to the Lisbon Treaty (which would encounter too many hurdles), but a new agreement – will be needed for the eurozone to mobilize that power, and such an accord will take time to negotiate and ratify. But, in the meantime, governments can call upon the European Central Bank, which the eurozone member states already fully guarantee on a pro rata basis.

Close two eyes( you must at a narrow mindfield, see your third eyes)  and take deep breath and hold your breath and kick the air and  dance!  No fear! That is the ground work for the economy growth! Ha Ha!!