Ambiguity is Deadly in Eurozone Crisis
John Kay, Financial Times | October 6, 2011
The European Union must concretely answer the question of whether member states are jointly responsible for each other's debts. ++ ‘Kissinger-style' ambiguity is useful in diplomacy, but dangerous in the market. ++ Politicians must understand that market forces will always test ambiguous economic policies. ++ Fannie Mae and Freddie Mac were backed by similar ambiguous policy in the US, and this backfired. ++ European institutions must avoid borrowing from private markets to pay down member debts.
