Wall Street Journal (March 28)Wall Street Journal (March 28)
“Squabbling over the difference between €500 billion and €740 billion looks a lot like deck-chair management.” How big should the European Stability Mechanism (ESM) be? Angela Merkel now supports expanding the bailout fund to €700 billion from €500 billion. The European Commission seeks even more. “Even if the ESM had the €940 billion that the Commission wants, the fund still won’t likely be big enough to save Spain and Italy if they end up asking for rescue. The financing needs of Madrid and Rome alone are likely to top €1.2 trillion over the next two years.” “Squabbling over the difference between €500 billion and €740 billion looks a lot like deck-chair management.” How big should the European Stability Mechanism (ESM) be? The current €500 billion appears insufficient. Angela Merkel now supports expanding the bailout fund to €700 billion from €500 billion. The European Commission seeks even more. “Even if the ESM had the €940 billion that the Commission wants, the fund still won’t likely be big enough to save Spain and Italy if they end up asking for rescue. The financing needs of Madrid and Rome alone are likely to top €1.2 trillion over the next two years.”
