|European Commission head|
Now, the EFSF is issuing bonds in order to raise the funds to bailout the insolvent nations, such as Greece, Ireland, Portugal, and soon Spain.
But Barroso’s goal wasn’t just to beef up the rescue fund—he also wanted closer integration of the eurozone states: Integration among in terms of the sovereign budgets, integration of their social programs, integration of their bond issuance, and so on.
“Integration”, of course, means control—which is exactly what Barroso really wants: More control of the individual eurozone economies by way of having Brussels control their sovereign budgets.
Following the famed advice of Rahm Emmanuel (“Never let a crisis go to waste”), Barros was trying to use the sovereign debt crisis to concentrate more power in Brussels.
Barroso clearly was trying to set the stage for the EFSF to be the de facto sovereign bond issuer for the whole of the continent. That way, by expanding the EFSF, he could have the excuse for phasing out the individual sovereign bonds of the eurozone nations by telling them: “Why do you need to issue sovereign bonds? The EFSF can do it for you! . . . so long as you do as we in Brussels say.”
But Barroso’s power grab (well, it wasn’t so much a power grab as a power grope) was transparent—
—as well as ill-timed: The successful Portuguese bond auction today, which raised €1.25 ($1.65) billion, shored up that country’s finances, and staved off the need to tap the EFSF for a rescue package (at least for now).
It also gave everyone a sense that there was a returning normalcy to European finances. Bond spreads came down across the board, the yellow alert went back to a mild green. Everything copacetic in Europe—for now.
We’ll see how long that normalcy remains. The Hourly G bets that by the end of the month, the red alert claxon will be whooping across the continent once again: Situation Normal—All Fucked Up.
Then we’ll see about “European integration”.