Hapless Eurozone Emergency Meetings on How Big To Make New Bail-Out Funding? It Won't Matter!
December 7, 2010 • 11:17AM

Last night in Brussels, a meeting of the eurozone's 16 finance ministers took place, on the task of deciding how big or small to make the emergency eurofund for financial bailout to handle current and future crises. The Inter-Alpha system is coming down; the euro is in its death throes, but the clown show continues. They decided to leave in place their $1 trillion (EU750 billion) financial backstop mechanism (set up last May), saying that future increases can be agreed upon as needed. This decision now will go on Tuesday, Dec. 7, to a meeting of ministers representing all 27 member-states of the European Union.

Meantime, it was released that the European Central Bank, in the last weekly reporting period, bought up EU1.965 billion in government bonds, which is the largest such amount in months, and a leap over the week before, at EU1.345 billion.

Yesterday's meeting did not even begin until nightfall—perhaps to accommodate the werewolves present—because of the fracas during the day, including a dispute over a counter-proposal by Italian Finance Minister Giulio Tremonti and Jean-Claude Juncker, who chaired today's meeting. They proposed that pan-European bonds could be offered to support governments in shaky positions. Given absolute opposition from Germany, the Netherlands and Austria, this proposal was not even taken up.

In reality, discussions about "bailout" and "reassuring markets" are exercises in farce. Despite all the quacking, supposedly to calm the "bond markets," the bailout approach guarantees doom. Only financial reorganization through the Glass-Steagall principle can work.

But tonight's meeting concluded with the usual baseless, stock reassurances. "For the time being, there's no need to increase" the funding, said Jean-Claude Juncker, who chaired the meeting. For the $1 trillion in back-up, overseen by the European Financial Stability Facility, the division among the three sources is: EU60 billion from the European Commission; EU250 billion from the IMF; and EU440 billion to be backed up by eurozone governments.