MidnightWatcher – Prophecy in Motion

“Euro zone leaders struck a last-minute deal on Thursday to contain the currency bloc’s two-year-old debt crisis but are now under pressure to finalise the details of their plan to slash Greece’s debt burden and strengthen their rescue fund.

After a summit in Brussels, governments announced an agreement under which private banks and insurers would accept 50 percent losses on their Greek debt holdings in the latest bid to cut Athens’ 360 billion euro (317 billion pound) debt load to sustainable levels.

Economists polled by Reuters on Thursday were split down the middle over whether the writedown was big enough, with 24 of 47 saying it wasn’t and the remainder saying it was.” Read more.

Germany: Collapse of euro could end half a century of peace in Europe – “Angela Merkel, the German Chancellor, has warned that failing to resolve the eurozone crisis could jeopardise the single currency and end ‘half a century’ of peace in Europe. As European leaders struggled to reach a deal over a bail-out package, Mrs Merkel said “the world is watching” and that “if the euro collapses, then Europe collapses”. Silvio Berlusconi, the Italian prime minister, was said to have offered to resign in January in exchange for the support of his coalition partners in raising the Italian retirement age. A subsequent debate over the issue in the Italian Parliament descended into a fist fight.” Read more.

Bank of England governor Mervyn King says euro fix is just buying time – “The Bank of England yesterday dismissed chaotic efforts to save the eurozone from financial meltdown as a temporary solution to the region’s woes. Governor Sir Mervyn King said long-term issues such as towering levels of debt and structurally weak economies still needed to be tackled. ‘The aim of the measures to be introduced over the next few days is to create a year or possibly two years’ breathing space,’ he said.” Read more.

Why you should be worried about Europe – “The European debt crisis is deeply concerning. If Europe were to be shaken by a series of nations defaulting on their government debt, I am convinced that the continent would plunge into a severe recession. Their recession would trigger a recession of our own, although a less severe one, through a number of links across the Atlantic.” Read more.