EU close to €500bn boost for rescue plan

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ASusilovic

The European Union was considering a massive emergency funding facility worth as much as €500bn in loan guarantees and credits on Sunday night to stabilise the eurozone before financial markets open on Monday.

EU finance ministers and top officials meeting in Brussels were racing against the clock as they tried to finalise details of the scheme.

Germany was also demanding for the loans to be tied to tough conditions. Angela Merkel, German chancellor, gathered together senior ministers and coalition partners in Berlin to comb through the details of a deal – particularly looking at its compatibility with the German constitution.

The stabilisation scheme is expected to include government-backed loan guarantees worth €440bn ($569bn, £383bn) provided by eurozone members, according to French, German and EU officials.

This will come on top of a €60bn expansion of an existing balance of payments facility that the EU used in 2008 to help Latvia, Hungary and Romania, three non-eurozone countries.

The facility would be increased to €110bn with the European Commission raising money on the markets using the EU’s €141bn-a-year budget as collateral. It would be extended to cover all 16 eurozone members. Any assistance would carry conditions set by the International Monetary Fund.

The eurozone’s efforts were being cheered along by Washington on Sunday with President Barack Obama urging Ms Merkel and President Nicolas Sarkozy of France to ensure that the European Union was “taking resolute steps to build confidence in markets”.

A key question remained over whether the European Central Bank would unveil its own, more dramatic, measures.

http://www.ft.com/cms/s/0/f96a6c14-5b48-11df-85a3-00144feab49a.html
 
Quote from ASusilovic:



The eurozone’s efforts were being cheered along by Washington on Sunday with President Barack Obama urging Ms Merkel and President Nicolas Sarkozy of France to ensure that the European Union was “taking resolute steps to build confidence in markets”.
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...because his sorry Arse is on the line and he will use any and all money printing to support the markets...."build confidence in the markets"....STOP SPENDING!!!!!!!!!!!!!!!!!
 
This is going to fail unless the ECB prints a crapload of euros to buy up all this crap debt from the PIIGS like the Fed bought crap mortgages. If the ECB doesn't get involved, the market will just take down these PIIGS again after a day of short covering.
 
The system is broken, and all these politicians deep down know it. You can see it in the frustration in those senate hearings, they just don't really know what to do.

The problem is there is no real alternative solution, either you bail them out now or you let the system crash down in flames. While the latter may be better in the long run, it's simply against human nature, survival instinct, whatever you want to call it to accept deep pain in the short term for long term health.
 
The system is broken is right, they think by providing more trillions in bailout money that just like that the problem disappears, the only solution from day one was to let the pieces of the puzzle fall where they should have fallen without any intervention, intervention has only caused and will continue to cause more stress on the system going forward. The more intervention and more dollars it takes to prop up the global economy will only prolong the collapse.
 
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