|Gratuitous picture of a Euro-babe,|
to extend and compliment the metaphor
in the text. (See what BS an Ivy edicashun
can allow you to spin?)
Notice closely: Japan will buy 20% of the debt needed to shore up Ireland—because the Europeans do not have the cash.
One of the problems that The Hourly G as well as a lot of other commentators have noticed is, the European Financial Stability Facility (EFSF)—the famed vehicle by which all the insolvent European economies will be bailed out—does not actually have, y’know, this little thing known as cash.
In order to bail out Greece, Ireland, upcoming Portugal and Belgium, and the Big Kahunas, Spain and Italy, the EFSF has been in the process of issuing its own debt. The funds raised by this debt issuance will be used to cover the bailout costs of Greece, Ireland, et al.
Which means that the European Union is essentially swapping the PIIGS‘s sovereign bonds for their own sovereign bonds under the EFSF umbrella, then putting the PIIGS on an austerity program.
But who, exactly, is going to buy the EFSF’s bonds? Not just of Greece and Ireland and Portugla and Belgium—those costs are more or less manageable. What about Spain’s bailout? What about Italy’s bailout?
Who will pay? Who’s going to finance the Euro-damsel’s credit card—because Germany can’t do it: The combined liabilities of the PIIGS are simply too large for Germany, if we’re counting Spain and Italy as part of the package (Spain and Italy’s combined economies are bigger than that of Germany; the PIIGS in total add up to a GDP of $4.136 trillion.
Enter stage left, Japan and China. They have repeatedly pledged to help out the Europeans . . .
|American Girl. |