German leader faces key choices on rescuing euro.

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Source: NYT

BERLIN — As Europe struggles to reverse a plunge in financial confidence, the world waits for Germany’s chancellor, Angela Merkel, to make a fundamental choice. She, more than any other European politician, will have to either summon the leadership to rescue the euro or concede that the political will is not there.

Mrs. Merkel, 57, faces far-reaching decisions about how to deal definitively with the debt crisis in Europe and, more immediately, whether to allow Greece to default or even to leave the currency union. American officials fear that if she does not act more decisively, bank lending could freeze up and the result would be another sharp financial downturn on both sides of the Atlantic.

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Events appear to be forcing Mrs. Merkel to tip her hand. With the latest market assault this week on French financial institutions, the spillover from the debt crisis has now reached the German border. With first Italy and now France affected, problems once dismissed as confined to the distant periphery of Greece and Portugal have arrived at the core of Europe, and with them unavoidable questions about the continent’s future.


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Read more: http://www.nytimes.com/2011/09/13/world/europe/13germany.html?hp

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Bang the drum slowly...

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1. Why do they call her MRS. Merkel and tell her age? Seems unusual...n/t

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2. Recommend

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3. Tracking Europe's Debt Crisis

http://www.nytimes.com/interactive/business/global/european-debt-crisis-tracker.html?ref=business

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4. UPDATE - Merkel: Euro Zone Has No Orderly Insolvency Mechanism Yet

BERLIN (Reuters) - German Chancellor Angela Merkel said on Tuesday there were generally no taboos in politics but that the euro zone crisis would not have a mechanism for orderly insolvency of one of its members until its permanent rescue mechanism comes into power in 2013.

"There are generally no taboos for thought in politics. But we are a government and we must, of course, ... be able to control all process we want to design," she told RBB inforadio in an interview. "We do not currently have such a mechanism (for orderly insolvency in the euro zone) and that's why the (European Stability Mechanism) ESM has to come into force."

Merkel's comments come a day after Economy Minister Philipp Roesler, who leads the junior coalition party the Free Democrats in her government, said that to stabilize the euro there could "no longer be any taboos."

Merkel said in her interview everyone should balance their words carefully to avoid further market volatility.Merkel also said she was confident her coalition parties would get a majority without having to rely on the opposition in a lower house vote on September 29 on giving the European Financial Stability Fund (EFSF) more powers.