12.11 AEP: Merkel's Teutonic summit enshrines Hooverism in EU treaty law

By John Galt
December 11, 2011 – 20:20 ET

From the upcoming print edition of the U.K. Telegraph, Ambrose Evans-Pritchard recognizes a mysterious pattern in world history and economics as the insanity of the banksters continues in this piece tonight (Click on title to read in full):

Merkel's Teutonic summit enshrines Hooverism in EU treaty law

From the commentary that spells out the crux of the disaster:

Europe will now have its austerity union, a revamped Stability Pact. Budgets will be vetted “ex ante”. Structural deficits will be capped at 0.5pc of GDP. Sinners will be punished automatically once they break the 3pc limit, and submit to suzerainty. Commissars will tell them how to treat trade unions, what to tax, and what to spend.

It is not remotely a fiscal union. There will be no joint debt issuance, no EU treasury, no shared budgets, and no fiscal transfers to regions in trouble. “The agreement hard-wires pro-cyclical fiscal austerity into the institutional framework of the eurozone, with no quid quo pro to move gradually to debt mutualisation.” said Simon Tilford from the Centre for European Reform.

Nor was there any change in the mandate of the ECB, not even a tweak towards growth, nor a hint that financial stability (not manipulating short-term prices) is the ultimate duty of a central bank. They are rewriting the Treaties, yet still refuse to correct the most dangerous single failure in the construction of monetary union: the lack of a lender of last resort. Why bother to put pen to paper at all?

Translation? The failure to print, the failure to address the actual problem of solvency within the financial system of Europe, and the inability to understand that the choice is either a fiscal and political union will ultimately result in a collapse of a large portion of the European banking system has been recognized by Evans-Pritchard but not by those in charge. Even with Bernanke promising back door miracle loans, odds are this so-called pact will collapse in a deflationary implosion of debt, protest, and ultimately revolution.