|(Picture by Eva_elfje)|
On Thursday and Friday, 27 European leaders will meet in Brussels (Belgium) for their last meeting of the year. Various themes will be discussed, but a special attention will be given to the German/French initiative for a revised structure of Europe. What will happen? Hopes are for important decisions to be taken at the end of this week. In fact, amendments of some treaties require the approval of all 27 governments. Will this be the case? Although any decisions will take time to be implemented, three solutions are possible. The first will generate a whole new fiscal organization for Europe. The second will be an improvement of current situation. The third option will leave everything like it is now.
Which road will Europe take? The first decision might be too radical, since few European states still do not grasp the difficulty of the moment. The last one will be too mild. The German/French layout could be followed this time. Here is a synthesis. Mrs. Merkel and Mr. Sarkozy have already discussed it in Paris this week.
The E.C.B is asked to take a more important role, while new steps would be designed for the creation of a fiscal union. Finally, governments could be subject to automatic sanctions, if fiscal policies will not be followed. What will be the results? Any decision taken toward a fiscal union is welcome. Nonetheless, at this moment, it will not be enough to avoid the euro to decline to new lows. Seasonally, December has been a good month for the euro and stocks. The first part of the year has been mostly bearish instead. The next target could be 1.28 and eventually 1.22. Nonetheless, the currency could rise again against the U.S. dollar in the last part of 2012 or in the first part of 2013.
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