Eurozone Bailout Deal: Hold the Cheers - by Stephen Lendman
Greece and perhaps other troubled Eurozone countries headed for collapse.
More debt agreed on exacerbates an out-of-control problem. Only its final resolution is delayed. The longer crisis conditions continue and grow, the worse they'll be when day of reckoning time arrives.
Nemesis, the goddess of vengeance and punisher of hubris and arrogance in Greek mythology, may have final say.
She's here among us, unseen, patiently stalking, and awaiting when she'll make her presence known. Wagner's Brunnhilde in Der Ring des Nibelungen collects heros, not fools and hypocrites. However, they both announce themselves the same way, saying "Only the doomed see me."
Predatory Wall Street and Eurozone bankers will feel their sting. It's just a matter of time. Rage across hundreds of US and European cities hastens their day of reckoning. Hopefully it's coming soon. Nemesis will decide, but won't announce it.
Pledging an "ambitious and comprehensive" debt crisis solution, Eurozone leaders sold out to bankers. Europe's debt problem is too great to solve. Throwing good money after bad compounds it.
Greece and other troubled countries owe up to $6 trillion. Germany, France, other donor countries, and the European Financial Stability Facility (EFSF) don't have enough resources to contribute without wrecking Eurozone economies.
As a result, doubts are being raised about optimistic assumptions, sketchy details, and important unanswered questions.
On October 28, the Wall Street Journal's Matthew Karnitschnig headlined, "Cheers and Skepticism Greet European Deal," saying:
Doubts remain about how the plan will work. "European leaders offered few details....signaling that it would take weeks, if not months, to work out the fine print."
As a result, many experts are skeptical. Speaking in Munich, Bundesbank president Jens Weidmann said:
"The envisaged leverage instruments are similar to those which were among the origins of the (2008) crisis, because they temporarily masked the risks."
RBC Dominion Securities currency strategist Stewart Hall believes funding the package "may prove a tough sell." Bond Vigilantes already expressed skepticism. More on that below.
Even if investors embrace the deal, bailing out out banks won't fix sick economies. As a result, economic weakness will deepen and remain protracted with no policy measure considered to boost growth.
Britain's Financial Times (FT) headlined, "Italy gives EU a post-party hangover," saying: