There is overwhelming nervousness about the Euro situation in the Irish news today. I heard something from a senior Irish political figure last night. He said “the Germans are not going to send any more money and a train crash is about to happen”. He may have meant that purely from an Irish perspective. Maybe it is related to this from independent.ie:
AS EU leaders dither, the European Financial Stability Facility (EFSF) — the limp pan-euro bailout fund — may struggle to raise enough money to fund the payments to Ireland agreed under the €67bn IMF/EU bailout package. There is “genuine fear” that the fund may not be able to access the markets as investors shun the euro region, according to UBS.
I know some dislike Zerohedge due to the conspiracy nature and the ravings of many of the commentors but I still find it an excellent source of information. The first line gives the title to this post:
The European desperation is palpable ahead of the EURUSD open in a few hours, which has to deal with the aftermath of the Friday afternoon downgrade of Belgium, the junking of Portugal and Hungary, and the prospect of an imminent downgrade of AAA-stalwarts Austria and France. So what does Europe do instead of actually proposing the inevitable debt repudiation that is the only and final outcome? Why more rumors of course. To wit: last night saw the preannouncement of Welt am Sonntag indicating that in order to bypass the lengthy process of treaty changes, Europe would instead proceed with bilateral agreements that would somehow enforce fiscal stability and convince the market that European states would follow the German leader. Well since that is sure to have absolutely no impact, overnight Italian La Stampa is out with a fresh new rumor which cites “IMF sources” according to which the US-headquartered and funded organization would provide a €600 billion loan to Italy at 4-5%. In other words, Uncle Sam, in his role as primary funding agent of the IMF would lose massive amount of money on the “market to fair value” arbitrage, only to bail out the latest European domino.
The article from welt am sonntag:
Welt am Sonntag said that because it would take too long to change existing European Union treaties, euro zone countries should just agree among themselves on a new Stability Pact to enforce budget discipline – possibly implemented at the start of 2012.
Graphic above from from ft.com. Article is worth reading to see the alternatives now that talk of a Euro zone breakup has become normal.