Euro zone needs fiscal tightening despite growth impact: OECD (Reuters)

On Saturday, Spain's prime minister Mariano Rajoy Asked For a Eurozone Fiscal Authority, in effect the "Fiscal Nannyzone" that I have spoke of on numerous occasions.

PARIS (Reuters) - The major developed economies are gradually gaining momentum led

BRUSSELS (Reuters) - The euro zone's fiscal deficit fell sharply last year as governments slashed expenses and raised taxes to regain market confidence in their public finances, but public debt still climbed, data from the European Union's statistics office showed on Monday. Eurostat said the aggregate budget deficit in the 17 countries using the euro fell to 4.1 percent of gross domestic product in 2011 from 6.2 percent in 2010 - the first year of the sovereign debt crisis. Euro zone public debt, however, rose to 87.3 percent of GDP in 2011 from 85.4 percent, Eurostat said. ...

THE European Central Bank was playing away today, in Barcelona rather than Frankfurt, but the result would have been the same wherever its governing council met: a no-change score, with the main policy rate left at 1%.

WAY back in August there seemed to be some momentum behind the idea of a euro bond.  Former EU commissioner Mario Monti, investor George Soros, former German finance minister and prominent member of the opposition Peer Steinbrück, amongst many others, have argued in favour.

BRUSSELS (Reuters) - The euro zone

The revisions in Euro zone and UK GDP figures have confirmed the lackluster performance in economies where rapid fiscal consolidation has been implemented. In the Euro zone, estimated growth has now been negative for five quarters. And in the UK, revised figures indicate negative growth for 2012Q4. In contrast, the US has exhibited continued, albeit modest, growth.

Since the beginning of the European debt crisis, most economists have focused on the potential consequences of a breakup of the euro zone. It’s easy to understand why. Although unlikely, a euro-zone breakup would be a potentially cataclysmic event that would leave the world economy in tatters. Economist Milton Friedman famously predicted the euro zone would fail when confronted with its first systemic crisis because it was a fair-weather construction.