Failure in Brussels.
by Stephen Lendman
Since crisis conditions erupted, it's number 19 and counting. Like earlier summits, they met. They talked. They agreed to talk more. They accomplished little more than before.
Dozens of rescue packages preceded Friday's. Promises are made and broken. Hyped plans failed. Conditions are worse now than ever.
Reality belies morning headlines. An official statement left important details unanswered. It was long on political posturing, not real solutions.
On June 29, Bloomberg headlined "EU Leaders Ease Debt-Crisis Rules on Spain," saying:
Bailout conditions were relaxed. Seventeen Eurozone country leaders met in Brussels. Talks continued until 4:30AM.
Most often decisions are agreed in advance. Maybe they stayed up all night partying.
A requirement that taxpayers get preferred creditor status on aid to Spain's insolvent banks was dropped. European stocks and bonds surged. So did the euro. Expect euphoria to be short-lived. It happened each time before.
Talk of a major breakthrough was morning headline hype. Independent analysts forecast hard times getting harder. So-called rescue funds provide a fraction of what's needed.
At issue are two rescue schemes - the European Financial Stability Facility (EFSF) and European Stability Mechanism (ESM).
Combined they have about 500 euros. EFSF exhausted most of its resources. It needs infusion help to replenish it.
The late Bob Chapman said around $6 trillion is needed for troubled Eurozone countries. What's proposed is a drop in the bucket. Moreover, the longer real solutions are avoided, the worse crisis conditions get, and greater eventual trouble.
Chapman said things festered so long unresolved that an eventual train wreck is virtually certain. He estimated a timeframe from 2012 - 2017.
ESM was originally scheduled to take effect July 1. Germany's parliament was still debating it. Chancellor Angela Merkel rushed back from Brussels to smooth passage.