You can fool all the people all the time if the advertising budget is big enough.
Ed Rollins
Portugal has just had its credit rating cut and both Greece and Spain are now begging the EU to set up a bailout fund to help the beggar nations (PIIGS) who are unwilling to curb their spending habits. In our previous article, we made the following comments.
Indirectly they have been begging for assistance from the very start. This aid package will trigger other beggar members of the PIIGS group to eventually join the handout club. Next in line is probably Spain. If the top members of the EU wanted to send a strong message to the weak members they should have stuck hard and fast to their previous claims that no aid would be forthcoming. Euro Woes, Part II: Have We Entered the Devalue or Die Era?
Now that Portugal has its credit rating lowered, Spain has started making noise about setting up a bailout fund. Not too long ago they stated that all was well, and that they should not be compared with Greece. Ironical is it not that they have now joined up with Greece in demanding a fund be set up to help nations that are having problems financing their debt.
French and Germany appear to have reached some agreement (the key word being appear) as indicated by the story below
The safety net - not yet agreed by the whole eurozone - would total about 22bn euros (£20bn). It would apply only if market lending to Greece dried up. Eurozone countries would grant co-ordinated bilateral loans, and there would be "substantial" IMF loans. The "majority" funding would be European. EU leaders are poised to discuss the plan at a two-day summit in Brussels. Full Story
We could go on about the potential ramifications of the above idea but there is something that is more interesting that we would like to speak off.
Germany and France knew that they would eventually come to the table and approve some sort of package even though they made a lot of noise about doing nothing in the beginning. No one has bothered to ask why. The reason is by playing this cat and mouse game, they have allowed the Euro to lose a significant portion of its value; in effect,…
