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Merkel: rewrite treaty — PIIGS can default

rock and a hard place. Ireland’s GDP down 20% over last two years. Nothing left to chop in fiscal terms or the state is not a modern welfare state anymore. Sounds like the Greek PM is on the same page, hasn’t yet said he won’t violate this year’s 8% limit, which has likely already been surpassed.

John Hathaway’s latest also at bloomberg … said the USD as reserve fx is on its last legs. Seems like the FXs of the west are all cross-held by each other somewhat like the Korean chaebol holding each other’s equity in ’97 until they needed to sell .. then it all crashed.

Merkel’s crisis-resolution plan foresees an extension of debt maturities, suspension of interest payments and a waiver on creditors’ claims, Handelsblatt newspaper reported yesterday, citing an unidentified government official.

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