To make this time constraint binding, the possibility to take advantage of obtaining lower financing costs for the transferred debt will be associated with strict conditions. In particular, these conditions comprise earmarking/devoting a part of the tax revenue for fulfilling the payment obligations, depositing collaterals and the obligation to commit to consolidation and structural reforms.
—”How does the European Redemption Pact Work?” in The European Redemption Pact (ERP) — Questions and Answers, (PDF) German Council of Economic Experts, Working Paper 01/2012, Jan. 25, 2012.
Europe is obtaining, earmarking, devoting, fulfilling, and depositing.
Peter Coy of Bloomberg Businessweek dove off the deep-end on May 28. Ambrose Evans-Pritchard of the Telegraph advanced the discussion on June 13 with trenchant analysis. George Soros received acclaim for a tandem speech and Financial Times op-ed in recent days.
All deserve honors for driving home the reality of a non-United States of Europe. There is a modest caveat, issued with respect, by the many searching for salvation.
What’s the price? Exactly what is the cost to peripheral and non-peripheral Europe to fix this train wreck?
Here’s the cost: How to request/demand the “part of the tax revenue,” “collateral,” and “reforms” necessary to gain the trust of the distrustful Germans?
This moment—this late-June—is critical. Consider a less-unified Europe. Consider Coy, Evans-Pritchard, and Soros. Discuss.