Yes, Europe’s Going Bust!
YES, Europe’s Going Bust! I think we all pretty much knew this was happening, there have been enough stories about it just recently. But it does really rather look like Europe really is going bust.
Eurozone finance ministers will on Monday night begin a frantic search for new sources of capital to boost the area’s main bailout fund to €1 trillion after the US and emerging powers refused to commit fresh funds at the G20 summit last week.
Here’s the thing you need to understand. That €1 trillion bail out fund, the one that’s going to save everyone and everything. They want to go and borrow the money for that €1 trillion bail out fund. And no one wants to lend them the money: quite wisely really.
That’s where this all falls down. They could just print the money at the ECB, that would cause some inflation but it would be real money that could be spent. They could try and gouge it out of us taxpayers (about €2,000 for every man woman and child in the EU) but we’ve not really got that spare cash lying around at the moment: plus the politicians would prefer not to be dangling from lamp posts by tea time.
Instead they’ve gone off and importuned any passing Chinese or developing nation and asked for a loan. The reaction has been just as if you or I were coming down off a drugs’n’booze binge and started panhandling for a bit of cash to keep it going. You know the sort of thing, somewhere between “Come back when you’re sober” and “Bugger off”.
So, at pixel time, it looks like there isn’t going to be any rescue fund as no one will lend them the money: thus Europe really is going to go bust.