Europe’s Bazooka

French President Sarkozy wasn’t kidding when he promised to shock the markets with a series of measures aimed at containing the sovereign debt crisis. Europe got the bazooka former U.S. Treasury Secretary Paulson always wanted. German chancellor Merkel and European Central Bank (ECB) President Trichet control the bazooka’s safety. What are the implications for liquidity and solvency issues? The euro and U.S. dollar? The decisions were breathtaking – literally so, as wheelchair-bound German finance minister Schauble was rushed to hospital after almost suffocated due to an adverse reaction to new medication. Those thinking such an emergency would weaken Germany’s hand were quickly proven wrong: Germany’s interior minister de Maziere was an even more stubborn negotiator. As the package to support weaker eurozone countries grew, Germany dug in its heels, requesting…