The EU area "encourages" bond holders to maintain their exposure to EU-area debt, and issues new bonds via an EU mechanism WITH SENIORITY over previous bonds? I see the strategy to devalue the Euro, but the ramifications for bonds and further issuance is very troubling. This is a terra incognito for the EU with multiple guarantees on debt (in several SOVEREIGN COUNTRIES) without a corresponding fiscal capacity tanatmount to providing a municipal fire department with millions of dollars of new fire-fighting equipment in the midst of a raging fire engulfing an lare section of the city.
The EU area is once again betting its existance on forward GDP, and more specifically, manufacturing output and exports.
This, coupled with the Spiegel articles out tomorrow, does not exactly burnish the ECB's credibility.
So its all a fine mess, and I just have to chuckle at these efforts to hold this creaking old rollercoaster together, and burst out laughing at the people who wish to ride it.