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Eurozone bail-out: holes emerge in the 'grand solution’ to solve EU debt crisis

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posted on Oct, 27 2011 @ 07:04 PM
UK Telegraph

A trillion euro bail-out to save the EU’s single currency is in danger of unravelling after Germany’s central bank warned that the rescue measure was too dependent on the high-risk deals that caused the economic crisis.

Hours after an all-night summit of euro governments ended, flaws began to emerge in a package that was billed as a “grand and comprehensive” solution to the European debt crisis.

The concerns were led by Germany’s powerful central bank, which expressed fears that a plan to leverage a €440 billion eurozone rescue fund to amass a “fire power” of €1 trillion, or £880 billion, resembled the risky finance methods that triggered the crisis in 2008.

The arguments are that this will be risky to Spanish and Italian bonds and tax payers will have to take on the risk, as usual. The plan to increase the EFSF to €1  trillion is not enough to address worsening debt problems in Italy and Spain. Insufficient detail on how Greece will address its mounting debt via the proposal for haircuts, among a couple of other greivances.

Well just imagine world reaction if this so called comprehensive plan is screwed?

posted on Oct, 27 2011 @ 07:21 PM
Honestly, I think they're just laying the ground work to let the defaults begin. I think they'll have just enough, much like with the whole Lehman Brothers fiasco, to stave off a full nuclear meltdown of the financial markets.

And where's all this money going to end up? Those large moneybags are going straight into the pockets of the banks.

posted on Oct, 27 2011 @ 07:24 PM
reply to post by surrealist

Gold is still going up...again. That alone tells me that investors are shaky as to where the Euro...and the dollar are headed.

posted on Oct, 27 2011 @ 07:41 PM
The worrying aspect of the Euoropean debacle is the reports in the Media of a German leader forecasting war if financial problems are not solved.

They won't be solved, they can't be solved, so what's next ?

posted on Oct, 27 2011 @ 07:49 PM
reply to post by Flyinghaggis

It will be war alright, but no a war between nations, but a war citizens against their own governments for the corruption that they have engaged while gambling away their nations and citizens wealth for generations to come like our own government has done to us in the US, the EU truly believe that they could do what the US government has done to us the citizens and while the US has the capability to hold and incredible debt the EU obviously can not.

posted on Oct, 27 2011 @ 07:50 PM

Imagine that.

Bailouts simply don't work.

And the notion that banks would take a 50% haircut when they wouldn't take a 21% haircut the last go around speaks volumes.

Every bailout issued to Greece was suppose to be the last one.

posted on Oct, 27 2011 @ 08:05 PM
reply to post by surrealist

Of course this won't work, only an idiot would believe it would.

I found myself screaming at the radio today listening to the fools on CNBC proclaiming we are now in a huge bull market because Europe is "solved".

You can not solve a problem of too much debt by adding more debt to make payments on it, why is that so difficult to understand?

I feel like I am in the twilight zone, or maybe more like 1984 where words mean exactly the opposite of what they should. I know everyone desperately wants the economy to improve, but it's simple there is no magical cure, there is NOTHING any government can do. The only thing that can fix the economy is to get the excess debt out of the system and the only way that can happen is through default. That will cause a depression - but it is completely unavoidable like it or not.

edit on 27-10-2011 by proximo because: (no reason given)

posted on Oct, 27 2011 @ 11:57 PM
Personally I suspect a rallying of the markets with a climb in gold and silver. Things will look as though they just might have dodged the bullet with Greece and even go so far as to offer substantial reductions to the other PIIGS. However, the bottom will fallout when they least expect it resulting in defaults across the board. All the little players and several of the majors being wiped out while further concentrating the wealth into a central location.

This will lead into a massive war but not fought in Europe but rather in the ME. With a mad grab for resources which the stage is already being setup for. The haircut that is coming is a Telly Savalas.

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