Barack Obama and David Cameron discussed the advancing debt crisis in telephone talks on Tuesday night. The American president and British prime minister \”agreed on the need for an immediate plan to tackle the crisis and to restore market confidence, as well as a longer-term strategy to secure a strong single currency\”, Downing Street said on Wednesday.
So, err, what was the plan? Dave? Bo?
Fiscal union which requires treaty changes and probably a German constitution change? Three years time if we\’re lucky?
Monetary easing, QE in all but name, by the ECB? Requiring a treaty change?
Recapitalisation of the Spanish banks? Err, before we actually know how bad they are? Before the exposure of the regions\’ debts? And with whose money? The ERM and EFSF aren\’t allowed to do it.
That there ought to be a plan seems sensible. The problem is, given the institutional structure, that it might not be possible to have a plan.