John Ward – Euroblown : Now It Really Is, As Spain & Italy to get… – 20 June 2012

$750 BILLION

That’s $1500 for every EU citizen…to bail out two countries

Worse still, two-thirds of it doesn’t exist

Every penny of it represents completely wasted money. Why?

Because it is a muddle-through hybrid like everything Sprout & Kraut Inc do: it won’t stop the financial forest fire engulfing Europe, and it isn’t a bailout: it’s simply designed to buy up the bond debt for which Spain and Italy are liable.

Because it will do nothing for the EU economy: this is a financial banking mega-play for sure, but once again the bankers are let off the hook of crazy lending policies by…you and me. (Can we have their profits and bonuses back for the last five years please?)

Because it still doesn’t address the problem of derivative obligations associated with both bank and sovereign default. Without money within the next fortnight – a lot of money – Greece will default. When Greece defaults, at least two French banks and one German bank will be blown away.

It leaves no pennies in the cupboard

The ECB has refused to buy any more bond debt in the eurozone. But if it doesn’t next time – and how far away is next time – two weeks? A month? – then where is the bailout money for everything from La Caixa in Spain to the entirely of Greece going to come from?

With two banks gone and its own bonds spiking thanks to Greek exposure, who or what is going to bail France out?

With the new Fiskal Union now replete with debtors, whose going to underwrite its debt bonds?

As usual, it’s an overclaim

The ESM exists only inside the fevered, rhyming imagination that comprises Van Rompuy’s deaths-head skull. It has not been ratified by Germany and Italy…and following yesterday’s Karlsruhe judgement, it must be debated by the full Bundestag. Even when it does come into being, its paid up capital will start at just €22bn. That represents the sum total paid towards the EU’s Steeple Restoration fund.

And remember…one of the signed-up backers is….Italy. Hurrah!

What a farce.

When the effects of this half-arsed popgun reach our shores, who or what will bail us out? Mervyn King and his bank of empties? The europhiles who hate us for being right? David Cameron and his ‘promise’ to protect us from the asylum’s mass breakout?

Cameron supports it. Fancy that. And Osborne says, “”These are systemic problems which require a system answer.” Well, if this is an answer then f**k off is a question.

I’ll give you my conservative estimate: it will take the euro markets roughly three days to work out that this is an unholy cross between a sham and a scam. Then the nonsense will start all over again.

Then what?

I usually say ‘stay tuned’ at this point. But on this occasion, my inclination is to buy some highy effective earplugs from the nearest pharmacist. In the meantime, You Read it Here First….

Yesterday: Spanish bailout imminent

Saturday: The fate of the euro is not in Greek hands

A year ago: Top Brussels officials admit Italy can’t be saved

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