Also the ECB becoming a lender of last resort for governments won’t work, what will work is those governments (Italy, etc) implementing the market reforms and austerity needed to sort out their own crisis.

The ECB can’t have any impact on Italian Bonds. Indeed, apparently, no external forces can! Only Italy and her government can have any impact on Italian Bond yields whatsoever. And it seems all these pesky governments need to do is privatise and sell off everything not nailed down and then we’ll be fine.

Thank god there are such great minds at work in the ECB fixing all this for us.

“But state TV reported that Mr Papandreou insisted during the meeting that he would not resign.”

So basically the answer is to privatise the public sector and get Europeans working for a dollar a day is it?? Oh and one other little detail of course, backstop the banks.

Hey! I’m Neil too! But I’m neither one of the aforementioned Neils. Maybe we should all have been given numbers instead of these confusing name thingies. 😉

Mr Papandreou will meet Greek President Karolos Papoulias immediately after an emergency cabinet meeting has finished.

He is expected to offer a coalition government, with former Greek central banker Lucas Papademos at the helm.

Telegraph:

“Italy’s borrowing costs have hit new euro-era highs of 6.343pc, and are teetering closer to the 7pc level widely regarded as “the point of no return”.

At those levels, Italy has to borrow more just to service the interest on its loans rather than paying anything back.

This is the same point that prompted Greece and Portugal to seek bailouts” [I wonder what’s happening in Portugal, btw, which seems to have been largely forgotten about.]

And Ambrose Evans-Pritchard writes:

“Italy’s press reported the drastic steps to be pushed through by decree being discussed last night may include levies on bank accounts, as occurred during the ERM crisis in July 1992 as a last-ditch move to save the lira.

Such one-off moves do nothing to lift Italy out of its stagnation trap. The country is suffering the delayed effects of a 30pc to 40pc loss of labour competitiveness against Germany within EMU, an overvalued euro externally against China, and a 70pc collapse in foreign direct investment (FDI) flows into Italian plant since 2007.

Capital flight from Italy has become a grave threat. The central bank reported a €21bn (£18bn) exodus in August, following a €20bn loss in July. ”

I wonder where all that capital is flying to…

http://www.independent.co.uk/arts-entertainment/books/reviews/the-last-godfathers-by-john-follain-864385.html

Neil, I’d just like to point out that there’s already a Neil on this blog (me), so perhaps you could modify your posting-name so that people don’t confuse us – we might not wish to be identified with each other’s remarks (not that I disagree with your post above)!