I’m not sure where the money is going to come from but €750 billion is the figure it looks like to build one of those EU firewalls around Italy and Spain. As the Irish Independent reports

EUROPEAN leaders are poised to announce a €750 billion deal to bail out Spain and Italy, it emerged at the G20 summit on Tuesday night.

Two rescue funds are to be used to buy the debts of the troubled economies, the cost of which have reached record highs in recent weeks.

It is hoped that the move, which represents a substantial shift in policy for Germany’s chancellor, Angela Merkel, will send a strong signal to financial markets that Europe’s biggest economy is finally prepared to back its weaker neighbours.

Mrs Merkel and other European leaders have come under intense pressure at this week’s G20 summit to take radical action to stem the growing euro crisis which has pushed up the cost of Spanish bonds to unsustainable levels. The communiqué issued at the end of the G20 summit, which finished in Mexico last night, said that European leaders had agreed to take action to bring down borrowing rates.

Under the proposed deal, two European rescue funds – the €500 billion European Stability Mechanism (ESM) and the €250? billion European Financial Stability Facility (EFSF) – will buy bonds issued by European countries.

The Slog as usual has his own viewpoint

Worse still, two-thirds of it doesn’t exist

Every penny of it represents completely wasted money. Why?

Because it is a muddle-through hybrid like everything Sprout & Kraut Inc do: it won’t stop the financial forest fire engulfing Europe, and it isn’t a bailout: it’s simply designed to buy up the bond debt for which Spain and Italy are liable.

Because it will do nothing for the EU economy: this is a financial banking mega-play for sure, but once again the bankers are let off the hook of crazy lending policies by…you and me. (Can we have their profits and bonuses back for the last five years please?)

Because it still doesn’t address the problem of derivative obligations associated with both bank and sovereign default. Without money within the next fortnight – a lot of money – Greece will default. When Greece defaults, at least two French banks and one German bank will be blown away.

Wait, isn’t there a slight problem to the G20 plan? The ESM doesn’t exist yet and may not. The German courts in their wisdom ruled against Merkel’s plans to ratify it this week. They said it needs to be debated first rather than being rammed through as Merkel wants. Anyone bother to ask the German people what they want?

It has not been ratified by Germany and Italy…and following yesterday’s Karlsruhe judgement, it must be debated by the full Bundestag. Even when it does come into being, its paid up capital will start at just €22bn. That represents the sum total paid towards the EU’s Steeple Restoration fund.

And remember…one of the signed-up backers is….Italy. Hurrah!

What a farce.

How long more will the euro crisis keep going, as slowly the markets are beginning to see through the bullshit.

The Emporer has no clothes !

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