Monday, May 10, 2010

Fort Europe and the Euro

Today's big news is the European Union's stability package for the eurozone. Unfortunately, there is still disagreement about the details of the deal.

European leaders have set up a large-scale emergency fund designed to prevent eurozone members in financial trouble from becoming bankrupt and they hope the move will send a clear signal to the markets that they are "no longer playing poker with single nations but with the whole euro bloc".
About 60 billion euros will be available immediately from EU reserves and that the other eurozone countries will stand guarantee for much larger loans if necessary. Germany, the Netherlands and Finland were holding out on agreement for a long time, fearful of writing "a blank cheque".
The three countries came under fire from European civil servants. "If we're not careful, we'll make the same mistake as with Greece," said one. "The final bill ends up being much higher because of offering too little help for weeks."

Call today "D-Day for the Euro" as European leaders building a defensive wall around the single currency. You can ask whether the speculators will make mincemeat of the euro or whether they will now be convinced that so much money has been pumped into the fight that "Fort Europe" is not to be taken.
In the meanwhile, the Netherlands has managed to win a place in the forthcoming G20 summit of leading financial nations. It says Dutch diplomats had a difficult battle to secure a place in the face of international irritation at the ending of the Dutch military mission in Afghanistan.

Day Opening - May 10

Rexaging by Wim Ipenburg