STOCK MARKET WATCH -- Tuesday, 26 June 2012

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33. Euro Crisis Threatens European Way of Life

http://www.spiegel.de/international/europe/debt-crisis-threatens-the-european-way-of-life-a-840643.html

It's unclear what Meles Zenawi used to think about Europe. The prime minister of Ethiopia heads an authoritarian regime that controls one of the poorest countries on Earth, located in East Africa, a region where ethnic conflicts are usually waged with Kalashnikovs. To a man like Zenawi, rich, peaceful Europe must seem like an island of the blessed -- or rather, must have seemed.

Zenawi's view of the old continent probably changed on Monday of last week. The Ethiopian leader, attending a dinner hosted by the exclusive G-20 club of the most important industrialized and developing countries in Los Cabos, Mexico, was astonished by what he heard.
The doors of the dining room had hardly been closed before the European representatives began giving their counterparts from other continents an eye-opening demonstration of how powerless and divided they are. The humiliation began with a simple question from the host, Mexican President Felipe Calderon. He wanted to know what the Europeans intended to do to get the high interest rates that the Spanish government currently has to pay on its bonds under control.

It was an important issue, replied Italian Prime Minister Mario Monti, whose country is also having great difficulty funding its debt at sustainable interest rates in the market. He proposed that the euro bailout fund buy bonds on the secondary market.