Categories EMU Europe Needs a Permanent Bailout Fund Post author By Philip Lane Post date September 27, 2010 7 Comments on Europe Needs a Permanent Bailout Fund so writes a group of European academics and former policy officials in this FT op-ed. Related Tags EFSF ← Robert Peston on the Irish Economy → Luas needs joined-up thinking 7 replies on “Europe Needs a Permanent Bailout Fund” Without being pedantic – but there is no mention of a ‘permanent bailout fund’ in this article. It argues, correctly in my opinion, that Europe needs to extend the stabilisation fund into an instrument of Euro-economic policy. That is, the EFSF must move beyond a ‘bailout fund’ into a coordinated strategy to manage – politically and economically – the new reality facing the EMU. It is as much about polity as it is policy. The EU (not Europe, such an entity does not exist!) will continue to push calamity and despair in order to devalue the euro. It is a standard fiat currency response in times of recession. This is a depression and such policies will not help! The aim is for imports and QE to cause inflation allowing repayment of the debts in inflated currency in the future. It will fail. Having such an agency will possibly enable reporters to know where to go for a stirring quote when another EU source tells them that things look black and the euro is weak! @PL EFSF now being linked to Ireland in various places – more on EuroIntelligence here …….. http://www.eurointelligence.com/index.php?id=581&tx_ttnews%5Btt_news%5D=2905&tx_ttnews%5BbackPid%5D=901&cHash=9a976a2b12 It is an option/scenario meriting serious figuring_out ………..(now that the leave-de_euro distraction has been put to bed ……..) “Benefiting from the favourable current situation in bond markets and its likely excellent own rating, the EFSF should be able to borrow at low rates. It should pass these rates on to borrowers with a minimum service charge.” On RTEs one oclock news David Murphy was asked why we are not using the EPSF. His reply was that it would cost too much – mentioned a figure of 7.5% – and it was left at that. Surely not, or did I pick it up wrong? What rate could we expect from the EPSF. I suspect the big price will be harmonisation of corporate tax rates @ Aidan R I guess the difference you are suggesting is subtle – but I would have thought that if you consider the EPSF a bailout fund for Eurozone then that is what the article is suggesting (nice site BTW – had a short visit) Can’t wait for the post revealing the economics of the unicorns and fairies jobs plan. All kinds of everything remind me of FF… There is a misleading headline in todays IT “Anglo bailout ‘may cost €35bn'” Nothing new about that – but what the S&P analyst actually said was: “”So the Government’s kind of Plan B with Anglo means this €35 billion could even be exceeded.” The question is by how many more billions? I can’t see behind the FT’s paywall – is this suggestion conditional on giving up taxation sovereignty and consequent evisceration of our FDI as some German MEPs are currently demanding (today’s Examiner). Comments are closed.