The OECD now forecasts the eurozone economy to be in a six-month recession lasting through the first quarter of 2012, followed by a slow recovery that will leave the 17-nation bloc with only 0.2 percent growth next year. Despite the OECD’s warning, European markets enjoyed one of their best sessions in weeks amid hopes that radical plans were being readied for the Dec. 9 meeting of EU leaders in Brussels. The Stoxx 50 of leading European shares ended 3.6 percent higher at 2,208.89.
Euro Zone Weighs Plan to Speed Fiscal Integration – WSJ.com
BERLIN—Euro-zone countries are weighing a new plan to accelerate the integration of their fiscal policies, people familiar with the matter said, as Europe’s leaders race to convince investors they can resolve the region’s debt crisis and keep the currency area from fracturing.
Under the proposed plan, national governments would seal bilateral agreements that wouldn’t take as long as a cumbersome change to European Union treaties, according to people familiar with the matter. …. The EU treaty allows countries to engage in “enhanced cooperation” if at least nine countries agree, circumventing the need for a unanimous treaty change among all 27 EU members.
via Euro Zone Weighs Plan to Speed Fiscal Integration – WSJ.com.
Euro Pressures Mount–Necessary for Eventual Resolution | Credit Writedowns
Germany is using this crisis to tighten its hegemony in Europe. It needs to close the fiscal loopholes. Many have recognized that this was a necessary birth defect in EMU–monetary union without fiscal union. A fiscal union–where countries, especially those that struggle to adhere to the Stability and Growth rule, have to cede a greater degree of fiscal autonomy. This will take the form not of German officials, but EU Commissioners having greater say in the fiscal policies of the debtors.
via Euro Pressures Mount–Necessary for Eventual Resolution | Credit Writedowns.