Reuters is reporting that France and Germany are in discussions over leaving the Euro and creating a new "core Euro". Perhaps it has something to do with this chart. Over 1/2 Trillion in exposure to the debt of a nation that suddenly has a 10-year yield of 7.5% will wake you up.
Perhaps Reuters should consider subscribing to The Golden Jackass, as Jim Willie predicted over 2 years ago that Germany and the stronger northern Euro nations would break off and form a Northern Euro before the end of the debt crisis.
"German and French officials have discussed plans for a radical overhaul of the European Union that would involve establishing a more integrated and potentially smaller euro zone, EU sources say. French President Nicolas Sarkozy gave some flavour of his thinking during an address to students in the eastern French city of Strasbourg on Tuesday, when he said a two-speed Europe -- the euro zone moving ahead more rapidly than all 27 countries in the EU -- was the only model for the future. The discussions among senior policymakers in Paris, Berlin and Brussels go further, raising the possibility of one or more countries leaving the euro zone, while the remaining core pushes on towards deeper economic integration, including on tax and fiscal policy...
France and Germany have had intense consultations on this issue over the last months, at all levels," a senior EU official in Brussels told Reuters, speaking on condition of anonymity because of the sensitivity of the discussions."
Hello Northern Euro, goodbye Greece, Italy, Portugal, and Spain.