Europe May Be Months, Conceivably Weeks Away from an Expanded Debt Crisis …..

• Reuters is a Rothschild owned mouthpiece I believe. This article highlights a coming financial tsunami! Via this engineered crisis and orchestrated attacks, the ECB is increasingly seen as the solution. They will soon have the full approval/mandate to print Euros out of thin air to bailout the Eurozone. National economic sovereignty will thus be surrendered and with it politicians will have to take orders from the ECB banksters.
   
  Many possible triggers for wider euro debt crisis
  Europe may be months, conceivably weeks away from an expanded debt crisis that cuts more countries off from access to the markets and forces fresh emergency action by rich governments or the European Central Bank.
    
  The many potential triggers for an expanded crisis include a failed bond auction, any signs that Athens or donor nations were backing away from a 110 billion euro ($141 billion) bailout of Greece, and a freezing up of Europe’s interbank money market. For now, Portugal, Ireland and Spain, widely seen as the next possible “dominos” after Greece, remain in significantly better shape. The interbank market is far from grinding to a halt as it did after Lehman Brothers collapsed in late 2008.
   
  But the spread of investor jitters in the past 24 hours, affecting markets as distant as yen swaps in Tokyo, suggests market conditions could deteriorate as rapidly as they did during the global financial crisis of 2007-2009. “In my view there is a 10-20 percent chance that at least one more country will need rescuing as it finds itself shut out of the markets,” said Marco Annunziata, chief economist at Italy’s UniCredit bank. “If it happens, it is most likely to happen in the coming six months.”
   
  Lena Komileva, head of G7 market economics at money broker Tullett Prebon, said the crisis over Greece’s solvency had morphed into a capital markets crisis, and the markets had begun to feed on their own momentum. “Another credit event similar to Greece can happen within weeks,” she said.
   
  German Chancellor Angela Merkel and top economic policy makers in the euro zone appeared to recognize this in their warnings about the risk of an expanded crisis on Wednesday. “It’s absolutely essential to contain the bushfire in Greece so that it will not become a forest fire and a threat to financial stability for the European Union and its economy as a whole,” said European Monetary Affairs Commissioner Olli Rehn.
     …
  The markets could also panic if commercial banks around Europe, which have cut off funding lines to Greek banks, decide to do the same to banks in Portugal, Ireland and Spain. So far the stresses in the money markets do not approach those seen at the peak of the global crisis. The two-year euro zone swap spread, which measures the aversion of lenders to deal with any but the most creditworthy borrowers, has widened to 65 basis points, its widest since mid-March 2009, but is far below the record 130 bps hit in October 2008.
   
  However, large Spanish and Portuguese banks are having to pay a higher price to access the interbank market, and this premium could widen if sovereign debt markets sink further.
   
  EMERGENCY STEPS
  The political difficulty of assembling an international bailout for a country — the Greek bailout was preceded by months of wrangling between angry governments — suggest the ECB would be the first institution to respond to an expanded crisis.
   
  It could reintroduce emergency measures taken during the global crisis, resuming a programme of lending in dollars and Swiss francs over six- and 12-month maturities, or extending its promise to lend banks all the weekly funds they need at fixed rates beyond mid-October. It might also abandon minimum credit rating requirements for more countries’ sovereign bonds when they are used as collateral in its money market operations, as it did for Greece this week.
   
  Its most radical step would be to buy countries’ bonds from the secondary market, shouldering their debt — though that would be hugely controversial and hurt the ECB’s reputation for conservative monetary policy. Analysts think it might pledge some 200 billion euros in such purchases. “They’ve a huge amount of armoury at their disposal. They can do a huge amount of things and I think they will be able to stabilize the market at some point,” said UBS chief European economist Stephane Deo.

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