- 24-05-2012, 09:47 #4461
- 24-05-2012, 10:01 #4462
- Join Date
- Jan 2010
The nation to be presented with the biggest bill in all this is Germany - not unnaturally they are baulking at picking up the tab for Club Med. Beyond Germany there are only a few other nations robust enough to put into the pot - and they are smallish - for example Holland. (France will try and play with the big boys, but whether her economy is robust enough is another matter).
The UK won't directly contribute. Cameron/Osborne have made it clear that the UK will contribute to the IMF and bail out individual European countries - they won't contribute to bailing out the euro zone. (And whether we can actually afford it is another question).
We can write off the 'minnow' states such as those in the Baltic.
That leaves the ECB - which can print the required money. This will stoke up eurozone inflation.
Which brings us to the politics in this:
Germany: Merkel is up for election in 2013. She won't (a) want to be seen as paying for Club Meds mistakes and (b) jeopardize her re-election chances.
France/Italy/Spain: the 'Latin Bloc' want to expand spending (using someone else's money) and continue to ramp up their increasingly unsustainable deficits.
Club Med: Italy, Spain, Portugal, Greece are all shying away from fundamental reform to make their economies more competitive, and northern Europe won't want to continue to subsidise the existing inefficient mess.
So the eurozone continues to be FUBAR...
- 24-05-2012, 10:14 #4463