European indecision is taking us all to the brink
EU leaders are rapidly burning up the little credibility that they now have left, writes Colm McCarthy
Published 06/11/2011 | 05:00
THE shelf-life of European 'solutions' to the banking and sovereign-debt crisis is now down to about a week. The Brussels package announced 10 days ago has already failed to attain the paramount objective of stabilising the Italian bond market. Italy faces bond yields which are unsustainable, even at very short maturities.
A total of €300bn in Italian debt needs to be refinanced up to the end of 2012. On Friday, Italian premier Silvio Berlusconi turned down an IMF offer of a stand-by loan facility, to the apparent discomfiture of his finance minister.
The previous day, the European Central Bank president had declined the opportunity to emphasise that institution's commitment to bond market support. Whatever about Greece, failure to ensure liquidity for Italy means a renewed threat of financial meltdown and the endgame for saving the eurozone.