RACE to cut ratings ??

As Egan -jones cut Gemany's credit rating its look like rating agencies are precipitated  to cut ratings of european countries and banks. Apparently  Merkel  vowed to lawmakers in close doors that shared liability for sovereign debt in Europe is not being contemplated during her lifetime, according to several media agencies.

What EU leaders can do or should do?

•  EU could issue jointly guaranteed "eurobonds," sharing responsibility for the weakest countries' debts. These bonds could carry low interest rates because they'd be backed by the collective power of all the eurozone countries, including Germany. 
•  EU, has proposed a deposit insurance fund to protect savers across the EU the way the Federal Deposit Insurance Corp. guarantees up to $250,000 per account in the United States. Individual European countries now insure bank deposits within their borders. But bank failures could overwhelm those national funds.
• As per our earlier blog EU need growth not austerity  which would help troubled countries pay their bills. Leaders of France, Germany, Italy and Spain agreed last week to push for a growth package worth up to $163 billion. But the plan is relatively modest. The money is expected to consist mostly of European funds already earmarked for development.

But again its all depend on Germany as  Chancellor Angela Merkel has said there would be no shared liability of debt in Germany. Merkel has warned against focusing on proposals for shared debt liability - such as the eurobonds favored by France's new Socialist leader Francois Hollande - and other "easy" solutions to the euro zone crisis at this week's European Union summit. She had said in a speech on Monday that sharing debt liability within the 17-nation euro area would be "economically wrong and counterproductive". 

Today's important economic data,

• GERMANY CPI ( MoM,YoY )
• US durable goods -May
• US pending home sales
• US crude oil inventories