Cyprus-Forum.com

[bsharpish]

So

As I understand the figures -

Spain needs 100 billion and will receive it at a favourable and supportable rate of approx 3%

The rest of the EU shares the load and borrows money (it doesn't actually have) to support Spanish banks .....who have toxic assets and loans that may never be recovered.

Italy with a debt already exceeding 120% of GDP has to contribute its share which makes it liable for about €18bn of Spanish bailout.

Italy itself is getting shocking rates on the bond markets - Approx 6.5% yield

So Italy pays out annually just over 1.1 billion in interest and receives back from Spain - 540 million ( this is just the interest and excludes the principal )

Soooo .... To save the Spanish banking system - Italy just gave the bond market over 10 million a week of its citizens money - this is on top of serving its own debt

Now repeat this in the other member states (although across the eu each country has varying interest on its bonds) JUST TO PROP UP Spanish banks that made stupid loans and used bad business models


This madness has to stop.... Someone needs to take positive action and either drop the whole flawed concept of monetary union or very quickly find a route to centralised fiscal control .... And lets be honest - the latter will not happen.
If they don't .... The uber rich will get even richer and the rest of us will be ground into the dust and all because the technocrats/idealists/incompetent political classes won't accept that the whole euro concept, in it's current form, will and by its very nature can not survive.

[bsharpish]

Be interesting to see how much Greece has to chip in as well..... That's even crazier -

Greece is borrowing money and accepting austerity terms to pay back money it already borrowed .... It'll take this borrowed money and borrow it ( and probably more) to Spain who will borrow it to the banks.

These banks will not lend money to anyone and just restore there balance sheets and pay each other fat bonuses.

The insanity of economics when risky fractional banking meets lunatic politics and social agenda's .

I've got a feeling that this tragedy will get a lot more personal and close to home within 14 days.

Meanwhile the spotlight will turn next month to Italy and more non existent money will be thrown at the problem.

[bsharpish]

Hold on a minute -

I've had an idea ..... What the EU needs is a strong central government , preferably in the form of a central economic or military superpower, it's people should be clearly superior and the model of efficiency and self perceived culture, it needs a strong leader and the ability to impose self appointed " technical experts " to rule the lesser countries.

This leader should be short and wear a strange hat with a red/white/blur rosette ... Perhaps with a complex about his height

OR

Like dressing in slick Hugo boss designed uniforms and have a strange moustache

I'm sure this has not been tried before