Who will bail out the EU bailout fund?

PuppetMaster

Cameron will give them the money, he loves giving money away, especially when it is borrowed and the bill goes to the middle class.

Ian Walker

What's the German for 'humble pie?'

Dimoto

Thank God for Clarissa Tan - finally an interesting blog-post.

Makes such a nice change from the distorted drivel from that DT-retail merchant Jonathan Jones !

Colin

Anyone who has taken the time to read "The Big Short" by Michael Lewis, will recognise the tricks being played here. The ruse of pretending that Junk is in fact AAA, through the use of dodgy financial engineering, is in effect what caused the meltdown in 2008.

This is beyond shocking. What is needed, as I've written here before is a complete, political reset.

The people of the UK and indeed the developed west have been the victims of two generations of political ineptitude. When you stop to think about things, the common denominator to most, if not all of our ills, is the political class.

Slim Jim

Well, since you ask the question, and have ruled out the one country that has an actual surplus, perhaps the answer lies somewhere else in the solar system. Since our so-called European political 'elite' appear to live on another planet it shouldn't be too much of a problem. Mars?

toco

The only way to restore confidence is for the Eurozone to acknowledge certain of its members are living way beyond their means and need to cut salaries and income generally by at least 25% to regain reality.Until this becomes accepted the Euro will continue to flounder and the betting is it will fail to continue in anything like its present configuration.

Peter From Maidstone

If it 'barely' brought in the 3 billion euros it was expected to then surely it DID bring in the 3 billion euros it was expected to?

Submariner

Peter from Maidstone @ 2.09pm:
Yes, but such offerings are usually heavily over-subscribed. This is a strong sign that the well is drying up.

Chris lancashire

Colin: it's not the political class, it's not even the bankers - it's all of us. We have all, to one degree or another, accepted we can go on living beyond our means. Agreed, The State has led the way with ever more generous benefits, pensions, health, etc. which were clearly unaffordable.

Thank goodness we now have a government dedicated to balancing its budget.

Clarissa

Peter of Maidstone, thanks for pointing that out. I should have clarified: today's sale worth 3b euros fetched interest totalling 3.1b euros. In contrast, an EFSF sale of 5-years in January fetched 44.5b euros of bids for just 5b euros of bonds - demand then was about 9 times supply.

Noa.

"Thank goodness we now have a government dedicated to balancing its budget.."

Chris Lancashire

Eh? come again!

Chris, I read your posts with interest and respect but you typed that one-handed I hope, because the fingers of your other were crossed.

You know our deficit and debt grow daily whilst we borrow slightly less than Brown.

Colin

Chris lancashire@2:25pm

It is the political class. The rise of the career politician and politicians who confuse and conflate party and state has led to a serious divergence of values, in relation to the electorate.

When you combine a massive sense of entitlement with world class, selfish ambition and no real understanding of the real world, you have a recipe for disaster.

It's one thing to go over your limit on your Barclay Card, something else entirely to squander the biggest tax take in the history of the UK, for f*ck all gain. At least the Barclay Card debtor might have a 50 inch Plasma TV to show for it...

TomTom

Watch out for CAPITAL CONTROLS and a freeze on Bank Accounts restricting how much can be withdrawn. Quantitative Controls are on their way !

oldtimer

Is this the fund connected to the Special Investment Vehicle, so appropriately abbreviated to SPIV?

It is clear that the whole attempt at raising funds this way has descended into farce. No one in their right mind will touch it with a barge pole. China was too savvy to fall for it.

Europe`s political class are, with few honourable exceptions, a disgrace. We now see in Greece, and possibly in Italy, the local national politicians getting out the way for some technocrat fall guy to step in the role of interim PM so he can pass the austerity measures, take the blame, and then step aside for the old guard politicians to resume their road to financial debauchery.

This all seems to be engineered by an emergent body that calls itself the Francfort group. The D Telegraph says that this same group held at least four pre-meetings in the margins of the G20 meeting, presumably to give Papandreou and Berlusconi their marching orders. The Spectator needs to tell us more about this group, who they are, what they do and why they are allowed to get away with it.

Cynic

Ian Walker/ What's the German for 'humble pie?' I don't think the Germans have a word for it. Perhaps it's an alien concept?

A pensioner

Chris lancashire "Colin: it's not the political class, it's not even the bankers - it's all of us. We have all, to one degree or another, accepted we can go on living beyond our means." Speak for yourself, Chris. I have no debt, live within my means and have savings. Whoever is responsible for the mess, I'm certainly not. I'll just lose out because of it (inflation and low interest rates are trashing the value of my savings and I'm on a fixed income).

William Blakes Ghost

Its pretty obvious SS Eurozone/EU/Europe is on the rocks. Time to head for the lifeboats and look for dry land. The grand vanity project is sunk.....

Peter From Maidstone

Clarissa, thanks for responding, those additional figures help put it into context.

Nicholas Porter

It really is most terribly unfashionable to say so, but perhaps Mrs Thatcher's dictum re. living within one's means was correct all along? (sound of gnashing socialist teeth)

McClane

"The EFSF was set up as a fund that lends to eurozone companies that are finding it hard to raise money."

Companies? Or countries?

TomTom

oldtimer - Papandreou and his opponent Samaras were roommates at Amherst in 1973. Papademos was at MIT and the Fed Reserve Bank in Boston and taught at Columbia University before becoming Central Bank Governor in Greece preparing them for Euro entry.

Work it out for yourself...this is a clique taking Greeks for a ride. Papandreou was born in the USA

TomTom

'humble pie? Well Cynic you are so arrogant....try learning what Canossagang means or Reise nach Canossa

Shaun Richards

There are a lot of problems with the EFSF. I highlighted some of these in my October 19th article in my MindfulMoney blog. Relevant to what you are discussing here is this bit.

"A point often missed is that the EFSF does not have any money. When it loans to countries it has to borrow it first..... As markets would be likely to be distressed the interest-rate paid may be high (making things worse and not better) or it may not be able to borrow at all (likely to lead to an outright panic)."

Yes there is the possibility that you have not mentioned of it not being able to raise money at all and my image is of an unstable lifeboat prone to capsizing. This is of course the opposite to the type of lifeboat that shipbuilders design!

Heartless P.

Who will bail out the EU bailout fund?

Ooh that's a toughy!

I'll guess ... idiots in the laughable 'Coalition' 'Government'?

Widmerpool

The Chinese certainly gave little Sark several fleas in his ear. The plans he took to Beijing looked more like a South Sea Bubble prospectus than anything else
"For carrying out an undertaking of great advantage but nobody to know what it is"

2trueblue

Germany were desperate to grow the euro area and they have benefited, so they can pay.

Worldwide there is not one real statesman who has any answers. They all grew their governments and deluded themselves that there was real growth in doing so. All they grew was debt and are amazed that there is now a bill they are unable to apy. Whatever on thinks about our coalition Liebore are unfit to offer advice as they fail to take responsibility for the mess they left behind them. Growing your client state and willy nilly inceasing immigration can hardly be called a sound strategy.

Unfortunately thos of us who have been frugal and saved are the ones paying in this country. Thank you Liebore and GOrdo. Debt is not a measure of grwoth or success, simply an idiots way forward.

Cynic

TomTom "Well Cynic you are so arrogant....try learning what Canossagang means or Reise nach Canossa" Perhaps instead of calling me arrogant you should tell me to get a better dictionary. Mine doesn't recognise either of those phrases. Admittedly, German is the fifth of my languages, so perhaps you could forgive me for not being up on colloquialisms.

Greg

The equation is simple and undeniable. Infinite growth - finite resources = total collapse. The first red flag is precisely what is happening now. The capitalist political system must change to a democratic one. Our economies, our lifestyle, in fact our entire thought process must change completely and quickly. Like the man said. You aint seen nothing yet.

Dimoto

"a pensioner":
Well said. Take heart, you are still in the majority.

I was about to recommend Jeremy Warner's piece in the DT, for a bit of perspective, but I see he has pruned it to almost nothing.
The proprietors probably objected to his far-too-balanced discussion.