Commented on “Credit Writedowns”

Edward,

Nice post. I think you capture German sentiment well.

To me, the Maastricht treaty was a good idea, but it was poorly designed and executed. No mechanisms/tripwires were put in place if countries were approaching critical thresholds and most of all, the EU never designed programs to get wayward countries in compliance if they went outside what was permissible. I think that’s one of the reasons why we’ve seen the Euro act the way it has: nobody was in compliance with Maastricht rules before, nobody warned countries to fix their debt problems before either. There’s precious little to be confident in the Euro area’s leadership in based on past experiences and behaviors.

One thing is for certain: the longer this goes on, the more it will cost to clean up eventually.

Originally posted as a comment
by professorpinch
on Credit Writedowns using DISQUS.

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