Thursday, October 06, 2011

Why do the media keep referring to an "expanded" EFSF?

When what became the EFSF was first announced, it was pitched at One Billion Dollars, as a "shock and awe" announcement, see the 10th May 2010, NYT report linked here. One billion US Dollars was the equivalent to some €560 million, (corrected - thanks IPJ).

In normal EU style, those making the deal had not allowed for the difficulties that would lie ahead and in order to raise funds on a AAA credit rating basis the actual amount that eventually could be lent was limited to €445 Billion on the amount committed by Euro Group members.

The 21st July 2011agreement, presently being voted upon in the Dutch Parliament (leaving Slovakia and Malta remaining to still give their parliamentary OK) does not expand the money available from the EFSF, which remains around €440 billion, of which roughly half has been advanced to Greece, Portugal and Ireland. The areas of what the funds may be used for have been extended, to relieve the pressure on the illegal bond purchases (expanded today as a parting gesture from [ttitpb] Jean-Claude Trichet).

More EU sleight of hand and media manipulation I am afraid. Get ready for more, following today's meeting in Berlin of the main EU players with the IMF, with various wild and unsubstantiated statements about bank re-capitalisation. The fact that no Europeans can now be trusted is becoming the centre of the problem!

Labels: , , ,


Anonymous IanPJ said...


One billion US Dollars was the equivalent to some €560 Billion.

560 to 1 - something wrong with yr calculator..

7:18 PM  

Post a Comment

<< Home