Skip to comments.Italy and Spain call for eurozone rescue fund booster
Posted on 01/22/2012 8:49:35 PM PST by bruinbirdman
Political leaders in Italy and Spain have called for a massive boost to the EU rescue fund and a blast of monetary stimulus by the European Central Bank (ECB), putting them on a collision course with Germany over the handling of the eurozone crisis.
Italy's premier Mario Monti has told Berlin that the new European Stability Mechanism (ESM) must be doubled to 1 trillion (£828bn) to restore investor confidence in southern European debt, according to Der Spiegel.
The move comes days after Mr Monti warned German Chancellor Angela Merkel that austerity fatigue is growing in the debtor states and there will be a "powerful backlash" unless the creditor powers led by Germany do more to correct North-South imbalances and lower borrowing for the whole eurozone.
In what appears to be a coordinated move by the Latin bloc, Spanish foreign minister José Manuel García-Margallo y Marfil backed the plan for a bigger rescue fund. He called for an EMU debt union and sweeping changes to the structure of the eurozone.
Mr García-Margallo exhorted the ECB to step up bond purchases in a fully-fledged campaign of quantitative easing, implicitly suggesting a blitz of up to 2 trillion on top of the unlimited credit already provided to banks at 1pc for three years.
"The European Central Bank can do much more than it has done: it has bought European debt equal to just 2pc of GDP while the Bank of England has done 20pc," he said.
Italy and Spain are both falling back into double-dip recessions. The International Monetary Fund (IMF) forecasts that their economies will contract by 2.2pc and 1.7pc respectively this year.
Plans for the IMF to help shore up Europe by boosting its own reserves to $1 trillion (£643bn) have already run into trouble. Sherpas preparing
(Excerpt) Read more at telegraph.co.uk ...
Meaningless and counter-productive unless they can get their out of control spending below revenues. A bigger bailout fund wll simply embolden their national leaders to spend even more recklessly.
Things are not looking good for the Euro zone.
“The move comes days after Mr Monti warned German Chancellor Angela Merkel that austerity fatigue is growing in the debtor states”
Merkel needs to tell Monti in very diplomatic tone.... tough sh1t. However, given the woes inflicted upon Europe twice in the last century by Germany, Merkel needs to be very careful in her manner.
This will be difficult to get past the Rothchilds in Frankfort and Paris.
“Help me I’ve fallen and I can’t get up”.
Checks and balances fatigue
Tea Party fatigue
The Euro-kerfuffle has evidently entered a new phase where beggars actually think they can be choosers.
It happened here in Illinois after Income tax boosted 75%, they just spent more money. Time to brew some tea and toss the pols into Lake Michigan.
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