BERLIN, Germany (PNN) - April 22, 2013 - The liquidity tsunami that started in September of 2012 in the Marriner Eccles building and continued with the Bank of Japan’s own epic QEasing expansion three weeks ago, has so far provided the impetus for Europe to kick the can of its inevitable dissolution for a few more months, yet slowly but surely the market is starting to read through the artificial levels implied by Italian and Spanish bonds, driven by recycled European Central Bank funding via bank and repo conduits and of course Japanese carry cash. Rumblings of a return to crisis conditions are back.
As always happens, once the crisis talk is back, so is discussion of a fiscal union.
Earlier today, Germany's Chancellor Angela Merkel once again reminded everyone just what the stakes are in order to achieve a truly stable and sustainable European Union: nothing short of ceding sovereignty to Germany; and with that we are back to square one, because that has always been the trade off - want a fiscally and monetarily unified Europe? You can get it: just bow down to Merkel.
German Chancellor Angela Merkel said on Monday that euro zone members must be prepared to cede control over certain policy domains to European institutions if the bloc is truly to overcome its debt crisis and win back foreign investors.
Speaking at an event hosted by Deutsche Bank in Berlin alongside Polish Prime Minister Donald Tusk, Merkel also defended her approach to the crisis against critics who argue she has put too much emphasis on austerity, saying Europe must find a way to deliver both growth and solid finances.
The comments came two months before European leaders are due to gather in Brussels to discuss moving towards a "fiscal union".
"We seem to find common solutions when we are staring over the abyss," Merkel said. "But as soon as the pressure eases, people say they want to go their own way. We need to be ready to accept that Europe has the last word in certain areas. Otherwise we won't be able to continue to build Europe," she added.
Merkel added, "it would be dangerous if other countries in Europe felt Germany was imposing its own economic model across the entire bloc."
Merkel is of course ready to head the asset-strip-mined continent. The question is who else in Europe is willing to hand over their liberties to the next incarnation of the German Reich?