> There will be no EU-rescue fund. Not only the german government strongly
> rejects this idea,
> wich would neutralize a core element of the European Currency Union
> architecture, that
> there will be "no bail out" of other governments in the Eurozone. And such
> fund is essentially about
> bailing out other countries.
>
> And there is even less backing for the idea of an international rescue
> fund. It is stil the, may be not fully
> justified idea, that this is an US-produced financial turmoil, and the US
> should pay the price: the bail out
> is seen this way.
>
> Only in the case when the european core countries are not longer able to
> contain the crisis, they would have to
> change their course...
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That's precisely the issue, no? - Whether the financial sector will be
strong enough to survive the crisis on its own or whether a large part of it
will temporarily need to be brought under public ownership and restructured.
So far efforts at containing the crisis both geographically and structurally
are failing, which is leading to calls for more coordinated international
action and further nationalizations. The speed of developments has been
breathtaking in the US and now Europe. The much-heralded plan put together
last weekend to rescue Fortis has already collapsed, with the Dutch
government announcing it is taking full ownership and control of the bank's
operations in the Netherlands, with Belgium expected to follow suit.
It'll be interesting to see what comes out of tomorrow's emergency EU meeting called to consider the crisis. The French have floated the idea of a Europe-wide 300 billion euro rescue plan, which the Germans, as you note above, have rejected. If things continue to spiral out of control and the survival of the system is deemed to be at stake, the German and all governments will be forced to take ever more drastic measures under pressure from their own capitalists as well as their people. Never say never.