While the bailout ball is in the German constitutional court, which has 8 days to decide, and potentially put the entire timeline of Europe’s bailout in limbo should it cogitate longer than July 9 without handing over the ESM law to the president, in effect forcing the country into a Euro bailout referendum, it is easy to forget that there are other AAA-rated countries in Europe, which also have a say as to who gets bailed out. As of this morning, it appears that Germany may increasingly be the only one left footing the insolvency bill as both Finland and Holland said “Ei” and “Nee” respectively.
Finland and the Netherlands will block the euro zone’s permanent bailout fund from buying bonds in secondary markets, the Finnish government said on Monday, despite European leaders’ decision last week that rescue funds be available to stabilise markets.
Euro zone leaders agreed at the summit on steps to shore up their monetary union and bring down borrowing costs for Spain and Italy, but they had given few details on the use of the temporary EFSF and permanent ESM rescue funds.
ESM bond buying from secondary markets would require unanimity and that seems unlikely because Finland and the Netherlands are against it, the Finnish government said a report to a parliamentary committee.
And more, also from Reuters:
Finland will block the euro zone’s permanent bailout fund from buying government bonds in the open market, the Finnish government said on Monday, while The Netherlands also indicated opposition to the bond-buying idea.
Comments suggesting a rough time ahead for the idea followed euro zone leaders’ agreement at a summit last week to take steps to shore up their monetary union and bring down Spanish and Italian borrowing costs.
They gave few details on how they might use the temporary EFSF and permanent ESM rescue funds to buy bonds.
A Dutch finance ministry spokesman said on Monday his government did not like the bond-buying idea but did not explicitly say the Netherlands would block the plan, saying only that it would evaluate purchases on a case-by-case basis.
“The prime minister said on Friday he is not in favour of buying up bonds,” said Niels Redeker, spokesman for the Dutch finance ministry. “Using the existing instruments to buy up bonds will be expensive and can only be done if there is unanimity (between member states). That means the Netherlands would need to vote in favour.”
On the insistence of Spain and Italy, now in the eye of the euro debt storm, euro zone leaders decided last week to soften slightly the terms on which countries that observe EU rules and recommendations can get euro zone help to lower market premiums.
So while Germany is indeed left all alone to preserve the European dream, we wonder: just what is the reason to keep calling Europe a “Union” when this is rapidly becoming the biggest misnomer of all time?