The European Tribune is a forum for thoughtful dialogue of European and international issues. You are invited to post comments and your own articles.
Please REGISTER to post.
The EFSF is already in that situation.
The EFSF has to source over 50% of its operating capital from "the markets" by issuing bonds backed by guarantees from Euro member states.
As member states get thrown under the bus they switch from guarantors of EFSF bonds to borrowers of EFSF funds.
Currently Spain and Italy are the marginal guarantors of the EFSF, and they are "under attack" by "the markets". Italy has suggested that it may exercise its option under the EFSF rules to withdraw its guarantee if its borrowing costs exceed those of Greece. The recent EU agreement allegedly lowered Greece's EFSF interest rate, while completely ignoring the fact that italy was, indeed, "under market attack".
In addition, France's AAA rating has become the subject of French Presidential Election Campaign Football, so whether France can continue to guarantee the EFSF's AAA rating is an open question, even if France continues to enjoy access to bond markets at reasonable rates.
Economics is politics by other means
by aquilon - Mar 10 31 comments
by epochepoque - Mar 7 11 comments
by Cyrille - Mar 8 1 comment
by afew - Mar 7 36 comments
by DoDo - Mar 10 16 comments
by ARGeezer - Mar 10 6 comments
by marco - Mar 3 43 comments
by maracatu - Feb 25 13 comments
by gmoke - Mar 10
by ARGeezer - Mar 106 comments
by aquilon - Mar 1031 comments
by DoDo - Mar 1016 comments
by Cyrille - Mar 81 comment
by epochepoque - Mar 711 comments
by afew - Mar 736 comments
by Oui - Mar 560 comments
by Oui - Mar 413 comments
by marco - Mar 343 comments
by vbo - Mar 124 comments
by Oui - Mar 11 comment
by Oui - Mar 13 comments
by Metatone - Feb 287 comments
by vbo - Feb 27110 comments
by gmoke - Feb 263 comments
by vbo - Feb 25102 comments
by maracatu - Feb 2513 comments
by Oui - Feb 2432 comments
by Oui - Feb 2214 comments