(no subject)
“We need a larger firewall,” IMF Managing Director Christine Lagarde said in Berlin yesterday. “Without it, countries like Italy and Spain, that are fundamentally able to repay their debts, could potentially be forced into a solvency crisis by abnormal financing costs.”
*snort* YA THINK?
Translation: We know that under normal conditions, certain European countries would be screwed. Confidence in their ability to repay would deteriorate and the interest rates on their debt would spike. Instead, we hope to break every historical trend. By having Europe act as a single fiscal entity and by loudly, publicly, and frequently stating that we will bail out any part of the system that gets into trouble, we hope to keep interest rates low. Otherwise we're f***ed.
(I love that "abnormal financing costs," except it sound pretty normal to me: have bad credit and get charged higher rates to borrow.)
That is all.
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