Germany OKs EU Rescue Fund Increase, Setting Stage for TARP Euro-Style

By:  Bob Adelmann
09/30/2011
       
Germany OKs EU Rescue Fund Increase, Setting Stage for TARP Euro-Style

Today the German parliament voted overwhelmingly, 523-85, to increase the size of the European Financial Stability Fund (EFSF) from $335 billion to $600 billion, and to allow it to purchase sovereign bonds, lend to profligate governments, and strengthen banks hurt by holding risky government debt. 

Protests over the move came primarily from Wolfgang Bosbach, a member of Chancellor Angela Merkel’s own party and an initial supporter of the European Union. He pointed to the failure of the continuing Greek bailouts, observing, “The first medicine didn’t work, and now we are simply doubling the dose. My fear is that when the big bang happens, it won’t just be us who will have to pay for generations hereafter.” He still favors the union, however: "I don’t want to be co-opted into an anti-euro movement — the EU is an important political project. But what we promised the people was a union of stability, not a union of debt."
 
Bosbach reflects increasing discontent of German citizens who find themselves forced to give approximately $300 billion to the rescue fund which will then use the money to buy worthless Greek bonds and continue to extend credit to the bankrupt country.

Today the German parliament voted overwhelmingly, 523-85, to increase the size of the European Financial Stability Fund (EFSF) from $335 billion to $600 billion, and to allow it to purchase sovereign bonds, lend to profligate governments, and strengthen banks hurt by holding risky government debt. 

Protests over the move came primarily from Wolfgang Bosbach (photo), a member of Chancellor Angela Merkel’s own party and an initial supporter of the European Union. He pointed to the failure of the continuing Greek bailouts, observing, “The first medicine didn’t work, and now we are simply doubling the dose. My fear is that when the big bang happens, it won’t just be us who will have to pay for generations hereafter.” He still favors the union, however: "I don’t want to be co-opted into an anti-euro movement — the EU is an important political project. But what we promised the people was a union of stability, not a union of debt."
 
Bosbach reflects increasing discontent of German citizens who find themselves forced to give approximately $300 billion to the rescue fund which will then use the money to buy worthless Greek bonds and continue to extend credit to the bankrupt country.

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