Tuesday, July 12, 2011 2:31 AM

Cardiac Arrest; Italy and Spain Close to the Abyss; EU Commissioner Seeks to Prohibit Agencies from Rating Debt of Countries in Rescue Programs

In yet another step deeper into the theater of the politically absurd, Euro Intelligence reports EU competition commissioner Michel Barnier wants to prohibit rating debt of countries in EFSF rescue programs. http://www.eurointelligence.com/homepag ... ?tx_ttnews[backPid]=901&cHash=3930349c483bc3d490365117dace42d9

The degree of confusion and desperation among eurozone policymakers is reaching new heights. EU competition commissioner Michel Barnier wants to prohibit ratings for countries which are part of an EFSF rescue program, Frankfurter Allgemeine Zeitung http://www.faz.net/artikel/C30638/schul ... 61596.html reports. In a speech in Paris he argued that they enjoyed European solidarity and that they were under the watch of the EU and the IMF.

Barnier asked the Polish EU presidency to put the topic on the agenda of the next finance minister’s meeting. All economists interrogated by the paper thought Barnier’s proposal was absurd.

Cardiac Arrest

The actual lead to that Euro Intelligence report is "Hallo, anybody there? Eurozone about to suffer a cardiac arrest"

In the absence of a policy response, the eurozone’s financial system may implode within a few days.

El Pais’ front page story ran with the headline that Europe was close to the abyss. http://translate.google.com/translate?j ... es&act=url The paper writes in an editorial that Germany, the Netherland, Finland and Austria stood in the way towards a solution of the crisis, and accused politicians in these countries to react hysterically.

The translated El Pais article Italy and Spain are close to the abyss does not say anything you have not seen elsewhere. However, it is interesting to see mainstream newspapers discussing "the abyss".

For a recap of Monday's panic, please see

• Sheer Panic; EU Revives Default, Buyback Ideas; New Strategy Coming "Shortly", No Timeline Set; Here's a clue: They are Clueless http://globaleconomicanalysis.blogspot. ... yback.html

• Bond Vigilantes Strike; Crisis in Italy Escalates; Portugal 2-Year Debt Hits 18.36%, Greece 31.34%, Ireland 17.83%; New Record High Spreads http://globaleconomicanalysis.blogspot. ... italy.html

• European Government Bond Spreads at Record Highs vs. Germany; 2-Year Spreads: Greece 30.09, Portugal 17.11, Ireland 16.58 http://globaleconomicanalysis.blogspot. ... ds-at.html

• Invisible Elephant Now Visible; EU Ready to Tell Trichet to "Stuff It"; Help for Italy? http://globaleconomicanalysis.blogspot. ... ready.html

Mike "Mish" Shedlock

http://globaleconomicanalysis.blogspot. ... se-to.html