January 26, 2012 - On December 9, 2011 the Heads of State of 26 EU member states, less the UK, adopted a fourfold strategy to end the deteriorating state of the EURO in general and to stabilise the public finances of Greece in particular. A major element of this package of measures is the rescheduling of the public debt of Greece by negotiating a reduction of at least 100 billion EUROS held by banks and other private investors and the voluntary reissuing of new bonds at reduced rates of interest. This measure requires the active cooperation of private lenders who, should there be a formal default on payment of their bonds by Greece, can legally trigger the default guarantees which cover their bonds. The consequences of such a default and subsequent triggering of compensation are impossible to calculate. They might be negligible, given their long anticipation, but they would most probably provoke the bankruptcy of the Greek state and its immediate withdrawal from the EURO. This in turn might well provoke the withdrawal of Greece from the EU and many believe it could lead to the collapse of the EURO itself.
December 10, 2011 - The German Chancellor got her way, and the European Union moved closer to a split that may go far beyond the British decision to refuse consonance with its European partners. The December 8 and 9 meeting of the heads of state in Brussels will enter text into books of European integration as the days where Britain again decided to step out of the joint boat of Europe, and where democracy landed a huge defeat. Merkel may have won the battle but Europe lost the war.
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