In a La Tribune opinion piece, Jean-Yves Lefevre points out the oddity of rising financial markests in a time of economic crisis. Why is this? he asks. Can it be that traders really believe ECB president Mario Draghi's nonsense about the Euro being "saved"? Look, he says, at how much European debt is out there. Why there's simply no way that the ECB could intervene effectively, even if it wants to.
As proof, he offers a table.
PIIGS: How much debt is due in the next three years?
| Total Debt in Billions of Euros |
Due in next 3 yrs |
|
| Grèce | 350 | 14% |
| Espagne | 730 | 46% |
| Italie | 1630 | 44% |
| Portugal | 120 | 77% |
| Irlande | 170 | 10% |
| TOTAL | 3000 | Ave 40% |
Greece, he points out, is tiny. Only 14% of a paltry 350 billion due. And even that is too much. Why, even the 30 billion due in a couple weeks is simply impossible. And that is just Greece.
Look at Italy! (44% of 1630 BILLION due in next three years) - or Spain (46% of 730 BILLION due).
Everyone can talk til they're blue in the face, but where's the money? The ECB (or BCE) doesn't have it. Just look, Mr Lefevre says, at its capital.
So who will pay - and how?
Does anyone out there really know? Or care?
Read Mr Lefevre's article here: http://www.latribune.fr/opinions/tribunes/20120921trib000720685/allons-nous-vers-une-nouvelle-crise-de-29.html
In related news, see Business Week's article "Spain to borrow $267 Billion of debt amid rescue pressure" by Ben Sills
