The Nobel award winners" dance party

Countess Bettina Bernadotte (37 years old) opened the annual meeting of the winners of the Nobel prize in economics, which took place between Tuesday and Saturday, on the island of Mainau, (named "Flower Island") of Lake Constance (South-Western Germany), not far from her family"s castle, in line with the tradition of the reunions set starting with 1951 by her father, Swedish count Lennart Bernadotte of Wisborg (a nephew of Gustav the 5th of Sweden, who in 1905 was the first Swedish king to award the Nobel prize), a meeting where Robert Mundell, who, in 1999, won the Nobel prize for his currency analysis, said: "I do not think that the Euro is nearing a collapse. Europe must move on, towards becoming an equivalent of the United States".

Of course, the opinion should not be removed from the context of this reunion, which is remarkable for its scientific and intellectual level, which also included sailing trips on the Constance lake, while also considering that it has been partially talking to a public of young students whom were also offered a dance night out.

The opening speech of the reunion at Mainau was made, however, by German president Christian Wulff, with Germany being the country which currently plays the most important part in the world crisis, and the final conclusions were spoken by the German Finance Minister Wolfgang Schäuble, which makes us think that the opinion of the Nobel prize winner was not just intended to get them in the mood for the dance floor, but it should actually be taken seriously because it concerns serious matters.

• Should we bet on the Euro, or against it?

For instance, if we were to believe the Nobel prize winner for currency studies, then we shouldn"t be betting against the Euro.

Because the Euro is not "on the verge of collapse".

Meanwhile, the Finnish government has suggested that the assets of the Greek state be transferred to a holding company registered in Luxemburg, which would manage them as collateral for more loans to Greece, and if this demand isn"t met, Finland would pull out of the agreement with Greece, causing a new round of chaos on the financial markets.

According to a piece of news published by Reuters yesterday, Austria, Holland, Slovenia and Slovakia have made requests similar to that of Finland, which was made as early back as June, in a plan by which Greece"s privatization agency would authorize the transfer of assets to a holding company in Luxemburg, and the properties would then be used as collateral for loans, limiting Athens" autonomy when it comes to managing its finances and privatizations.

Obviously, the Greek government rejected the idea of offering land or stock as collateral for the loans, in fact, it actually threatened on Friday that it might give up on the bond swap needed for the second international rescue agreement, if the private investors didn"t participate in the deal in a proportion of at least 90%, and would give up on this operation which would cut its sovereign debt by a "paltry" 37 billion Euros.

Well, when your debt is ten times the aforementioned amount, and 1.5 times your GDP and when you have no hope of ever paying back your loan (and Europe who lent you the money knows that), that kind of loose change is inconsequential...

Moreover, Polish finance minister Jacek Rostowski called the Finnish "selfish".

• The United States of Europe

But apparently Polish finance minister Jacek Rostowski needs to receive some reeducation from Nobel prize winner Mundell, because yesterday, he graciously strayed from the "party line", by saying, in "Gazeta Wyborcza", that the Euro and the EU would collapse, if Germany didn"t make the right choices in managing the crisis.

Obviously, when you look at things with the serenity of Robert Mundell, "the Euro is not on the verge of collapse", after Greece lost its sovereignty. Hungarian PM Viktor Orban on the other hand seems unable to be so relaxed about it, as he said yesterday that he is facing "a very dangerous situation" because of the extraordinary risks caused by the sovereign debt crisis in the Eurozone and he needs to continue to lower budget expenditures, because he doesn"t want Hungary to end up like Greece.

Why?!

I mean, what"s wrong with the Greeks?

Robert Mundell advises: "Europe must move forward, towards an equivalent of the United States".

The United States of Europe.

The loss of Greece"s economic sovereignty is just one step towards that.

When you look at it like that, it would be a good thing if Greece were followed by Hungary.

Italy would follow.

Spain, Ireland, Iceland, Portugal...

There will come a time when Romania would actually be asking to be "admitted" in this "select circle" of the United States of Europe.

We need to meet one performance criteria that we are good at: let"s get up to our ears in debt.

Relax!

Emil Boc can easily do that!

The proposal of French president Nicolas Sarkozy and of German chancellor Angela Merkel of a "European economic government" is a guarantee that we will finally be rid of Emil Boc, using precisely the thing he is good at.

• The Euro omelet

Mundell is right when saying that the Euro isn"t collapsing. After all, the CEO of the European Financial Stability Fund (EFSF) Klaus Regling said that the risk of the Euro being abandoned is zero, because both the countries that are in trouble, as well as those who are solid have an interest in keeping it, like "Der Spiegel" wrote yesterday.

Moreover, Joseph Stiglitz, who won a Nobel prize for studying the effects of asymmetric information on the market, said that "It"s pretty hard to unscramble scrambled eggs", and admitted there are ongoing talks on whether "an optimal method for disbanding the Eurozone exists".

He said that part about the unscrambled eggs right before going to eat near "Inselhalle" (the conference room on the "Flower Island").

Perhaps he was hungry ...

"The symmetric information" part of the impossibility of unscrambling scrambled eggs is the fact that European countries burdened by debt can"t give up the Euro to return to their national currencies. In fact, Stiglitz claims that Germany would benefit a lot more from leaving the Eurozone, because the Deutsche mark would strengthen.

Perhaps, despite the xenophobic Germans protesting against the loans made to Greece, Germany will not leave the "Euro omelet".

Perhaps it"s hungry as well ...

• Would it be a good idea to invest in the shares of European banks?

The former head of the US Federal Reserve Alan Greenspan, who lived for 85 years without being awarded any Nobel prize, said that "overall sentiment is that we are seeing the calm before the storm", that the Eurozone is collapsing and he provided the explanation: "Germany and Finland have budget discipline, whereas southern nations like Greece, have always consumed more than they produce and also borrow".

Must be the wisdom of old age ...

The managing director of the IMF, Christine Lagarde, said at the end of last week, at the annual conference of the Federal Reserve in Jackson Hole, Wyoming, that European banks that are having trouble need to be urgently recapitalized, drawing vehement criticism for this "reckless and confused attack" on European banks.

The European officials consider that, through these statements Lagarde proved that she doesn"t understand the current difficulties of the European banks.

"The key issue is funding. Banks in some countries had some problems in getting liquidity these past few weeks".

So let"s translate.

What it means is, "Forget capitalization, it doesn"t matter that major European banks are grossly overexposed to the bonds of bankrupt states, which are incapable of paying back their debts, bonds which up to now, used to be considered "zero risk" instruments (and now are highly risky); we want money to buy even more bankrupt bonds, or else our Eurozone will fall apart, is that so hard to understand?!"

Perhaps they think a woman is not smart enough to understand this ...

After all, some time ago her hair was dyed blonde.

• Advice to investors

If we were to follow the advice of the Nobel prize winners, then we should bet on the Euro and buy stock in the major European banks. If this advice isn"t enough for you, then also buy shares in major European companies that have lucrative contracts with the countries with the largest debt in Europe.

However, a word of warning: if the Euro collapses and the EU dissolves, then the Nobel prize winners won"t compensate you for your losses, as they will say that they just expressed some opinions, before going to the disco.

And besides they also didn"t warn us about the crisis.