Thursday, March 24, 2011

Finland threatens upgrade of EFS! Euro trembles - Major Banking defaults loom!

The following report comes from Finfacts Ireland, linked here:

It's reported from Berlin that Chancellor Merkel plans to propose that Germany €22bn contributions to the new €500bn rescue fund be stretched over five years rather than four as  agreed two weeks ago.

Meanwhile Finland has dissolved its parliament and will hold a general election on April 17 and is unable to make any decisions on the bailout fund. The right-wing True Finns party, which opposes measures to help embattles countries of the single currency area is expected to do well.

In the Irish Times, further explanation, linked here, on the existing bail out scheme the EFSF, points out:

The EFSF is backed by €440 billion worth of guarantees from euro zone countries but its lending power is limited to €250 billion as a condition of the triple-A credit rating it relies on to secure favourable borrowing rates. This is because only six of the 17 euro zone countries – including Germany and Finland – are beneficiaries of AAA rating.
EU leaders want to increase its lending capacity to €440 billion as part of a new “grand bargain” for the euro zone and most of them, particularly the triple-A countries, agree this should be done by increasing the fund’s guarantees.
But Finland’s centre-right government, under pressure as support rapidly grows for the Eurosceptic True Finns, has refused to increase its guarantees and is not expected to agree an increase at this summit.

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