Debt crisis: as it happened, May 3, 2012

Inquiring minds are reading "Towards a Genuine Economic and Monetary Union" by the gang of four nannycrats: European commission president Herman Van Rompuy, ECB president Mario Draghi,  José Manuel Barroso of the European commission, and Jean-Claude Juncker, the leader of the 17-country eurogroup. Don't expect any details. There aren't any. Instead the document consists of a wish list wrapped in a wordy package that says virtually nothing.

  The EU Crisis went into overdrive in the spring of 2012 when the Spanish banking system as a whole nearly collapsed. Having pumped €1 trillion into EU banks via its LTRO 1 and LTRO 2 programs in December 2011 and February 2012, the European Central Bank found itself facing a problem far greater than Greece (Spain’s banking system is over €3.7 trillion assets in size, compared to Greece’s  €338 billion) and on the verge of losing control of the entire system.  

Last summer, Citi's chief economist, Willem Buiter, introduced a bold call: he assigned a 90% probability that Greece would exit the euro on January 1, 2013.

Today's non-news that has the currency markets in a flux with a rising dollar and a sinking euro is a revelation by ECB president Mario Draghi that Eurozone Growth Risks are on the "Downside". Really? Downside? Yes, really. It would have been shocking to hear otherwise in spite of all the happy fluff talk that the "worst is behind".

By Colin Lokey:On Wednesday, Mario Draghi picked up on something important. The day before the ECB holds its monthly policy meeting, Draghi said the following: "...the latest data suggest that [the crisis is] now starting to affect the German economy."