The latest attempt to cobble together a plan to save Europe from itself has already been panned by one of the outer colonies (the one previously known as the Republic of Ireland). The grand Rube Goldberg scheme came from Olli Rehn, the EU Economic and Monetary Affairs Commissioner (via thr Telegraph, UK):
We have been considering this as a serious possibility, of breaking the link between the sovereigns and the banks. This is not part of the ESM (bailout fund) treaty for the moment, in its present form, but we see that it is important to consider this alternative of direct bank recapitalisation as we are now moving on in the discussion on the possible ways and means to create a banking union.
The key issue is to be able to break the link between the banks and the sovereigns so that we can go to the roots of this current debt crisis.
In other words, create a Eurozone-wide bank bailout so Spain doesn’t have to beg for IMF money (or actually pay the interest demanded by the market).
Most of the reaction is focused on how Germany will react to essentially being asked to bail out Spain, but even before Rehn’s comments hit the cyberworld, one of the neo-provinces cried foul (same link):
If the eurozone now moves towards banking union – enabling the European Stability Mechanism to be used to recapitalise banks rather than fund governments – Dublin will insist its bank debts get equivalent treatment.
Lest we forget, Ireland is only in it’s current mess because (1) the euro created a massive bubble in the ex-Republic, (2) the government decided to bailout every bank in the 26 counties, and (3) said government (and it’s elected successor) has tried to fix the resulting massive budget hole with wave after wave of tax increases.
Clearly, they’re not happy the Hibernian province could avoid some of that just because it’s bigger.
Yet another day in the Brusselian Empire.
Cross-posted to Virginia Virtucon