1) Will the ECB be able to provide support for sovereign bond markets through QE?
2) Will national authorities accept the terms associated with possible bailout loans?
3) Will national political leaders continue to support the euro?
But, it did do more than that. In its statement, the CC ruled that: 3/
So the Bundesbank would effectively exit the ECB. 6/
This is something the, deeply politicized, European Court of Justice failed to do earlier. 8/
In the second key question, we step into a purely political realm.
The European leaders have agreed on a "massive bailout packaged", which is actually... 9/
So, the answer to the second key question is very uncertain. 11/
The defining moment in the history of some 200+ failed currency unions is always the same: the disappearance of the political will to push the integration further.
This, cohesion, is the glue of currency unions. 12/
I'd say that we are pretty darn far.
Almost all of the good-will northern member states were used up in the re-capitalization efforts of German... 13/
In the EU jargon this is known as the "debt crisis of the Eurozone", while in reality it was the most morally corrupt bank recapitalization operation in history.
For example, the Greeks only received around 10% of all the bailout funds. 14/
In Finland, the support for True Finns would be likely to skyrocket, like that of the AfD in Germany.
Moreover, we would become insanely indebted fueling more public discontent. 16/
So, the key questions: 17/
2) National leaders of debtor countries are likely to be reluctant to accept austerity conditions, while creditor countries are unlikely provide lending without them.
And, things will get even more dire, also politically, when the European banking crisis gets going. 👇19/
However, if we dismantle it in a joint agreement, we may be able to save the #EU, in some form.
In an uncontrolled breakup of the EZ, the EU may very well disappear alongside it. 20/