You remember what CDOs were?
Collaterialised Debt Obligations?
Take some dodgy debt, stick a nice guarantee on top of it, bit of financial alchemy and then call it an AAA bond?
The Commission’s €60bn bail-out fund (EFSM) raised its first €5bn to cover the Irish loan package, paying 2.59pc on five-year bonds. The cost is notably higher than equivalent French debt at 2.12pc, suggesting that investors are sceptical about the fund’s AAA rating.
Ireland will be charged 5.1pc for loans from the EFSM.
Oh look, if Governments do it it must OK, right?
For this is essentially what they are doing here. Raising money on the combined debt rating of the eurozone countries in order to lend it to the fiscal basket case which is Ireland.