It was easy enough to predict. In fact it was. The Euro debt crisis would be 'resolved' by more rhetoric, more posturing and arcane debt-hiding scams which purport to solution the debt crisis. The issue with Europe is systemic rot which courses throughout the width and breadth of the Euro political-economy. It has nothing to do with 'Greece', though this state is bankrupt and has been for a while. It has to do with most if not of all European statist-socialism. The entire fabric is corrupted and rotted. Not just Greece.

It is no surprise that the markets have gone up 10% in the past week; and that the media cheer-leads the latest and best efforts of Europe to 'solve the debt problem'. As if a Continent awash in 800% debt to GDP is going to resolve anything. This was written back in the dark pessimistic era of January 2011, when Euro gloom pervaded. All of this has been washed away apparently, by jubilant 'markets', bongo beating media, and the usual sniffling sects who cling to their Das Kapital, Tofu and GlobalWarming socialism. Europe is too big to fail [or is it?]:

Of particular concern is the 'shell game' that the Euros are creating through the fraud known as 'The European Stability Fund' or ESF, which sounds an awful lot like the US' TARP. The ESF is simply an exercise in hiding debt. At some point this off the balance sheet liability – which is criminally prosecuted against non-governmental agencies and firms – will have to be addressed. Gilani writes:

In order to stoke investor demand for the sovereign debt of EU member countries – and to provide badly needed liquidity – the European Financial Stability Facility (Fund) was created. The $520 billion (440 billion euro) rescue package had several mandates. It was designed to provide capital to buy bonds of issuing member states and to infuse capital directly into banks and financial intermediaries to ensure their continuing viability.

But there’s a giant problem with the fund: It was structured as a “special purpose vehicle,” or SPV, a type of venture that can be used to hide debt. SPVs, and the collateralized-debt obligations (CDO) they often housed became household names after the collapse of Enron Corp. and the onset of the global financial crisis.

SPV's are basically off the balance sheet accounts which hide debt. The problem is not resolved – it is simply ignored and swept under the political-economic carpet. The latest Euro plan to save the Zeuro is guess what – an SPV:

“Around 250 billion euros remaining in the fund will be leveraged 4-5 times, producing a headline figure of around 1.0 trillion euros, which will be deployed in a variety of ways. The EFSF [Euro Financial Stability Fund] will be leveraged in two ways, either by offering insurance, or first-loss guarantees, to purchasers of eurozone debt in the primary market, or via a special purpose investment vehicle that will be set up in the coming weeks and which is aimed at attracting investment from China and Brazil.” source

So the great escape for Europe is to set up an off the balance fund a la Enron; beg the Brazilians and Chinese to buy some bonds; leverage up another $ 1 Trillion in Euro debt; and hope that 'private' capital will come back. Pray tell what solutions are resolving the systemic liabilities of Old Europe. What ideas are being implemented to lessen ossified corrupted markets, capital restrictions, labor inflexibility, too much spending, and a culture against all change and reform?

It must be the Age of Aquarius. Markets are rational? The Euro at $1.40 to the USD? Not really. Over the longue duree nothing much has changed in Europe. The Euro will still be a zero. It is a matter of time and of reality finally overcoming rhetoric and market manipulation.