- Last Updated: 11:41 PM, June 16, 2012
- Posted: 11:17 PM, June 16, 2012
As Europe limps out of another cataclysmic weekend in which dire warnings are being issued by finance ministers across the Continent, the time has come to shock the system.
Forget ratings downgrades — we are running out of letters. Uncle Sam needs to issue Europe a margin call.
By Fed chief Ben Bernanke agreeing to “swap” billions of our dollars for their euros last November, we essentially underwrote Europe’s petulant state of over-entitlement for the last six months. We are now to the point where we went into this weekend not even knowing if their banking system will open tomorrow morning and whether Greece — which after two mind-numbing bailouts — will vote today to decide if it will even bother to stay in the euro or not.
This has to end. Call in our chits.
There needs to be some accountability in Europe for all this, and that will not happen if the US is backstopping all the socialist high jinks of the politicians.
Hey, the US “fixed” our banking problems over the course of some weekends in 2008. Let’s see Europe do the same.
In reality, pulling our support could help Europe solve its problems by removing the training wheels that we provided the European Central Bank to practice riding.
The ECB or European Union could form an entity just like the FDIC (call it the EDIC), which would insure bank deposits so the bank runs taking place from Athens to Barcelona can halt.
They could set up a Euro-TARP to add capital to their banks until they no longer need it, just like here.
The moronic ECB can even lower its interest rates to zero, just like our Fed, to combat unemployment as high as 25 percent in some places.
And that will buy them some time — on their dime — while their politicians figure out how to reduce their outstanding trillions of dollars in debt.