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Euro rescue of €2 trillion 'an illusion'

The Local · 24 Sep 2012, 16:10

Published: 24 Sep 2012 16:10 GMT+02:00

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A spokesman for Finance Minister Wolfgang Schäuble told a regular news briefing that the figure, reported by Der Spiegel magazine over the weekend, was unrealistic and "completely illusory."

While there were discussions in Brussels over boosting the firepower of the European Stability Mechanism (ESM), due to come into force next month with a volume of €500 billion, it would be "abstract" to discuss figures, said the spokesman, Martin Kotthaus.

"It's not feasible" to put a precise number on the potential final amount of the fund, he said.

However, he said that the German government backed in principle the idea of leveraging the fund, which is reported to have run into opposition from Finland.

The possibility exists already for the ESM's predecessor, the European Financial Stability Facility (EFSF), Kotthaus recalled.

Story continues below…


The Local (news@thelocal.de)

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Your comments about this article

17:47 September 24, 2012 by smart2012
bad populistic press nationalistic and anti Europe... even when Europe has finally found a good path recongnised all around the world (thanks to Draghi. Monti, Hollande, Obama, Cameron, Chinese president etc etc), German populist press have to be against it to show they were right. But actually they show how silly they are...

btw, this 2 trillion could be used to cover the German debt.. :-)
19:38 September 24, 2012 by sonriete
leveraging? This is EU speak for borrowing money to print more money. The same way a law is a "directive" The markets are thrilled by all this, it gives them six or nine more months to speculate before the crash.

No doubt Mr. Soros has sent the two Mario's a nice box of cuban cigars each for their nice handywork.

Only question is, what is poor Mr. Soros going to do with the four hundred billion he is going to "earn" at taxpayer expense from all this?
22:58 September 24, 2012 by smart2012
Sonriete, did u watch a movie on this?? Soros has invested tons of money on Spanish and Italian bonds, where they were at the highest interest rate, so the last thing he wants is that euro crashes... Read please, but forget bild, it is dangerous for u and Germany
23:07 September 24, 2012 by jg.
The plan was to "leverage the fund" i.e. borrow additional money from the markets but this idea depends on the ability of the ESM to extract additional funds from member states. However, with the recent ruling to limit Germany's liability, the markets now know that the ESM wouldn't be able to acquire more money with which to pay back any borrowings.

All ESM members will have to borrow money from the markets to make their contributions, so this is only going to increase overall sovereign debt and make some bankers wealthier.
09:16 September 25, 2012 by sonriete
@smart2012, you have it half right, Soros and his buddies have indeed invested a huge amount in these high yield bonds, but that is the point, ESM is bailing THEM out, with the unlimited bond buying scheme, giving them the six to nine months to make an orderly ( and lucrative) retreat from the market.

That is the whole point to this. In the end it will not be Soros and company who will be stuck it will be the German taxpayers who so generously agreed to "unlimited buying" of this junk. (or did they?, wasn't their representative the one no vote?). thanks Super Mario.
12:17 September 25, 2012 by smart2012
Sonriete, u still do not convince me: you stated in your first message: "it gives them six or nine more months to speculate before the crash" but now u say there will be no crash or what? I am again confused. And again about german tax payers...let me remind you that France and Italy pro capita will pay exactly the same money as Germany in the ESM, and actually those club meds will put more money in the ESM than germany...

please stop looking with a silos view, become a true european person, Germany was able to survive the East Germany unification thanks to Euro and Europan system, which buffered German yelds for 10-15 years (with other EU countries paying higher interest rates)..

Otherwise, as I said a tons of times, get out of it... Europe wants Germany, but only if Germany plays fair, not just looking at a short term "uber alles" view, which is very very dangerous for all of us and is increasing natiionalis and bringing to a disaster (again read latest German manufacturing data).
12:52 September 25, 2012 by sonriete
The fact is it is meaningless that France and Italy are on paper putting up as much money, no one is putting up any money at all, it ill borrowed even Germany and the Netherlands are in the red and are borrowing every cent they put into ESM. The difference is The PIIGS and even France are in real terms insolvent, their ability to ever repay is hopeless, that is why the ratings agencies keep downgrading them. Bild is not a ratings agency, and the German populist press does not have any influence over their activities. The new German guarantees can keep the PIIG's afloat probably not much past next Spring, by then Soros will be long gone.
17:38 September 25, 2012 by IchBinKönig
smart2012, you're an idiot.

the good news is that this will all fall apart in a matter of months.
22:43 September 25, 2012 by smart2012
Sonriete, u keep saying Germany will and Italy and France will not be able to pay back. Why, what is the backround of your theory? I would like to remind u that the only wealthy states are china, Russia, brazil, India at the moment. In eu we are all in a stagnant situation, Germany is getting in recession. So that is why we need Europe, to keep china, Russia, brazil, India investing in Europe. Germany has a 2 trillion debt, they cannot afford to pay anything.

Konig, u r undecutated. Am sorry 4 u and your kids
16:34 September 26, 2012 by sonriete

My entire point is that the ratings agencies

are doing their non political jobs, which is judge what debts will be repaid and on what terms.

Germany continues to make payments on debt from the First Reich. A hundred years later they take responsibility. Greece on the other Hand pounds their fist on the table demanding haircuts on bonds issued 5 years ago. The ratings agencies see this, do you?
12:34 September 27, 2012 by 50ftqueenie18
The cowardly German government will give in to the EU, just as they give in to Islamism growing in Germany and Europe.
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