Can the Eurozone Survive the Economic Challenges of Greece and Italy?

[Astronuc]

Nikkei is up over 2% at the open. U.S. futures are still about even but that should change by morning.

The Nikkei could also be responding to the Japanese government allowing the restart to two nuclear reactors at Ohi.

Ohi mayor Shinobu Tokioka has announced his approval of the restart of Ohi 3 and 4, citing safety assessments carried out on behalf of Fukui Prefecture and also a public appeal by Japanese prime minister Yoshihiko Noda for the resumption of nuclear power.

However, "Prefectural governor Issei Nishikawa has said he will base his final decision on the restart on the will of the people of Ohi town and the prefectural assembly."

 

[Borg]

The Nikkei could also be responding to the Japanese government allowing the restart to two nuclear reactors at Ohi.

However, "Prefectural governor Issei Nishikawa has said he will base his final decision on the restart on the will of the people of Ohi town and the prefectural assembly."

That's good. I haven't been keeping current with Japanese market forces and I wasn't looking forward to an inflated 10% gain that some analysts were calling for today. Japan closed with a good gain, Europe has reasonable gains this morning and the U.S. futures are still flat. Yeah, sanity!

 

[Astronuc]

Euro, Global Shares Jump in Relief Rally After Greek Vote
http://www.nytimes.com/reuters/2012/06/17/business/17reuters-markets-global.html

SINGAPORE (Reuters) - The euro jumped to a one-month high and Asian shares rose nearly 2 percent on Monday after Greece's election delivered a slim parliamentary majority to pro-bailout parties, a result seen as crucial to European leaders' efforts to hold the euro together.

U.S. stock index futures and riskier commodities such as crude oil and copper also rose, while gold fell after a rally last week, when investors had looked to bullion as a safe haven amid fears the election could trigger financial turmoil.
. . . .

It remains to be seen how long-lived this mini rally becomes.

As the articles indicates, there are more hurdles or perhaps pitfalls ahead.

 

[mheslep]

I remember quite a few folks expressing misgivings about the Euro precisely for the reasons that the EU or Eurozone is now in trouble. Quite a few expressed concerns about the lack of fiscal discipline in some economies.
...

Perhaps most famously:

... I think within the next 10 to 15 years the eurozone will split apart. The British government, on balance, should stay out of it."

 

[Astronuc]

Europe's Tower of Babel hampers euro solution
http://news.yahoo.com/europes-tower-babel-hampers-euro-solution-055244786--business.html

Germany, France, Italy and Spain, the euro area's four biggest economies, are wrestling over proposals for a banking union, joint euro zone bonds and handing (surrendering?) more control over national budgets and economic policy to the European Union. However, the EU faces conflicts between and among its member states, and separate, often fierce, national debates within each state, each of which has the power to block any change to EU treaties, including 10 countries which are not members of the currency.

Can such a diverse group of nations/states pull it together - and avoid further deterioration of individual and aggregate economies?

 

[mheslep]

...

Can such a diverse group of nations/states pull it together - and avoid further deterioration of individual and aggregate economies?

I think no, at least not under the current structure of the EU government and constitution, which is far too involved in micromanagement. Only a sparse, highly restricted and limited federal government has a chance, one that leaves most of the power with the individual states such as the police power, would have constitutional check on spending, etc.