Posted on 10/27/2011 4:25:17 PM PDT by mojito
A trillion euro bail-out to save the EU’s single currency is in danger of unravelling after Germany’s central bank warned that the rescue measure was too dependent on the high-risk deals that caused the economic crisis.
Hours after an all-night summit of euro governments ended, flaws began to emerge in a package that was billed as a “grand and comprehensive” solution to the European debt crisis.
The concerns were led by Germany’s powerful central bank, which expressed fears that a plan to leverage a €440 billion eurozone rescue fund to amass a “fire power” of €1 trillion, or £880 billion, resembled the risky finance methods that triggered the crisis in 2008.
EU leaders are expected to sanction the establishment of a so-called special purpose investment vehicle, or SPIV, to be set up in the coming weeks. It is aimed at attracting investment from countries such as China and Brazil.
Jens Weidmann, the president of the Bundesbank and a member of the European Central Bank, sounded the alarm over the plan to “leverage” the fund by a factor of four to five times without putting any new money into the pot.
He warned that the scheme could be hit by market turbulence with taxpayers left holding the bill for risky investments in Italian and Spanish bonds.
(Excerpt) Read more at telegraph.co.uk ...
All they have done is kicked the can.
I’m sure Greece will abide by the austerity terms.
signed, Pinocchio
They are p!ssed.
I hope so. Let the world learn that hard work and sacrifice pays off, and profligacy does not.
I watched the news idiots praise the Euro fix on the news this evening. Even my old brain cells immediately identified that the plan didn’t add up. Just another smoke and mirrors gimmick to lure the suckers on.
It is all about printing the money in a complex manner which isn’t totally obvious as a scam to bail out banks and other bond holders by shifting the true cost to taxpayers through currency devaluation.
The problem of excess debt will then temporarily appear to be solved by issuing still more debt...
We have a massive house of cards on top of a massive house of cards; topped by hundreds of trillions of derivatives backed by worthless promises to pay.
What, me worry?
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