Euro zone set to boost debt-crisis firewalls

Euro zone finance ministers are likely to agree to temporarily almost double their financial backstops on Friday as one of the final moves to end the sovereign debt crisis, although Germany continues to ...

Even as car sales across Europe have plummeted in recent years, automakers could count on Germans to buy with little discounting. Now, at least one dealer is resorting to Groupon Inc. coupons to boost sales. AK Autoport Koeln GmbH, a dealer in the western city of Cologne, is offering a 99-euro (US$130) Groupon voucher entitling buyers to a discount of 5,450 euros on a 2013 Ford Fiesta — a price break of about 32%.

Europeans are bracing themselves for a severe case of post-holiday blues.   As the warm summer months draw to an end, the region’s sovereign debt crisis appears to be coming to a head.   Greek Prime Minister Antonis Samaras has initiated a charm offensive in an attempt to convince European leaders to give the debt-stricken country more time to carry out reforms, though Germany and France have already sent a strong signal that there will be no leeway for Greece.  

  As noted in our recent article, “The Beginning of Dissent” a key issue for Europe this year is Angela Merkel’s re-election bid in Germany. Merkel has thus far managed to support Europe through verbal and monetary intervention without angering the German populace to the point of outright unrest. However, the political tide in Germany looks to be turning increasingly against both Merkel and the Euro.   In this election, there are three key concerns for German voters:  

Eurozone bureaucrats keep upping the ante as to how big a "firewall" is needed. And at every critical juncture, German Chancellor Angela Merkel has proven she is nothing but a liar. With every demand for additional firepower, comes an inevitable cave-in from Merkel supporting the move, no matter what she says in advance. Meanwhile, the entire idea that firewalls can accomplish anything is ludicrous, given the key point that no currency unions in the absence of fiscal unions cannot and will not work.

Roubini Says Rising Sovereign Debt Leads to Inflation, Defaults Credit-rating cuts on Greece, Portugal and Spain this week are spurring investors’ concern that the European deficit crisis is spreading and intensifying pressure on policy makers to widen a bailout package. Roubini’s remarks underscore statements by officials such as Dominique Strauss-Kahn, managing director of the IMF, that the global economy still faces risks.