FRANCO-GERMAN IMPASSE UPDATE: BUCK ZOOMS UP AT EXPENSE OF EURO

GAME OF POKER SET TO START BETWEEN EU, IMF AND GREECE

“This is every Europhile’s worst nightmare” said a senior civil service source in Paris this afternoon, “and you can bet the Elysees people are tearing their hair out”.

Nicolas Sarkozy and Jean-Claude Trichet are indeed reliably described as incandescent with rage following the further overtures made to the IMF by both German Chancellor Merkel and senior finance spokesman Meister in the last twenty-four hours.

Bloomberg has an interesting piece right now headlined ‘IMF to Assist Greece After Game of Chicken’. The commercial players are coming readily out of the closet to confirm that from here on, it will be a question of who blinks first between the EU and the IMF. CIO of Pacific Investment Mohamed El-Erian told Bloomberg, “The IMF will come in, but there is no immediate solution.”

Having said at the start of this crisis that it represented “the greatest threat to the Euro since its inception”, Angela Merkel now seems hell-bent on making this a self-fulfilling prophecy.

The Euro has meanwhile taken a hammering for the second day in a row.In the last eighteen hours, the Buck has gained 10 cents against the Euro: since New York opened, it’s climb has been on North Face proportions.