Their conclusion: the eurozone has a solvency problem, not a liquidity problem.
But the eurozone actually has a much more pressing problem: its banks.
French banks are under real threat of having their equity wiped out if Portugal, Ireland, Greece, and Spain see a 20% haircut, according to JPMorgan.
The only country that matters now is Germany. Disregard the comments of confidence (recently, weakness) coming from the Iberian Peninsula, ignore French quips about eurozone economic strength (recently, weakness). Germany’s leaders, and their willingness to spend, are all that matter.
So, If Germany doesn’t step up, and provide more money to weaker eurozone members, its neighbour’s massive banks (including the biggest in the world in BNP Paribas) may be toast.
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