EXTRACT: Meanwhile, if possible, the euro zone crisis took a turn for the worse as the EU gathered at Brussels in the evening of October 26, with the news in the morning that Italy’s borrowing costs had nearly hit 6% - despite the fact that in August the ECB had been busily buying billions-worth of Italian and Spanish bonds, temporarily pushing the interest rate on Italian government bonds down to 5% or thereabouts. How short-lived.
This is clearly unsustainable and Italy ’s mountain of debt is set to reach somewhere in the region of €1 trillion. Without drastic action, like a write-off or bailout - something - Italy could find itself sliding into default and near bankruptcy. If that were to occur, Greece could be the least of the euro zone’s worries - a mere storm in a teacup. Italy may be too big to fail, but it is increasingly becoming too big to bail out. Not to mention Portugal , Spain , Ireland , etc - what is to be done about them if the situation spins out of control?
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EXTRACT: At the G20 meeting of finance ministers and central bank governors in Paris on October 15, Tim Geithner, the United States treasury secretary, apparently said there were “six days to save the world” - the asteroid is approaching. So by the time you read this article you should know whether or not his prediction has come true. Unless, of course, you were too late …
What Geithner really meant was that the entire euro zone project was in very real danger of imminent collapse unless European leaders came up soon with the “bold” and “decisive” action they have been promising for weeks now. Failure to do so, obviously, would have catastrophic consequences for the world economy, heralding a new depression. Then it would just be a question of exactly how many banks and financial institutions collapse, and in turn how many new ‘failed states’ were created in the process. One thing that is absolutely guaranteed is that under such calamitous conditions it would be the working class which gets hammered into the ground by a despairing bourgeoisie out to save its own skin - either that or the mutual ruination of all classes, as Karl Marx warned in the Communist manifesto.
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Death By A Thousand Cuts

EXTRACT: Plainly, the European banking/financial system is unravelling - decaying before our very eyes. There is even a chance that the EFSF will never even get to use its (utterly inadequate) €440 billion war chest - after the Slovakian parliament on October 11 voted against the bill to boost the powers and size of the bailout fund. Naturally, rejection of the proposal also triggered the collapse of the fragile four-party coalition which had ruled Slovakia since July last year. Slovakia has a population of 5.5 million, its GDP representing a mere 0.5% of the European Union’s, and was being asked to fork out €7.7 billion towards the EFSF pot - an amount equal to roughly 12% of its total annual economic output.
Of course, just like in Ireland, there will almost certainly be another vote - and the pressure will be on to vote ‘correctly’ this time. In all likelihood, by one means or another, the Slovakian parliament will eventually consent to the new mega-EFSF. But it is by no means a complete certainty and any further delay in ratifying the new EFSF mechanism could prove to be disastrous. The clock is ticking against the euro zone project. Greece is not going to magically go away and a ‘disorderly’ default by the Greek government could deliver an absolutely devastating blow to European banks, causing lending to freeze up.
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