The European Union’s leaders have finally come to agreement on proposed changes to the region’s constitution that would allow for sovereign defaults within the eurozone.
The changes, spearheaded by the now triumphant German Chancellor Angela Merkel, aim to put in place a “crisis mechanism” that will deal with future sovereign debt crises.
The new agreement will see the eurozone allow for sovereign default, without abandonment of the euro. This new set of rules will come into play by 2013.
Conveniently, Mohamed El-Erian has said Greece will default in three years. So, just in time for his call.