Open Europe has instead called for Europe\’s banking system to be \”fundamentally recapitalised\” in a move that could cost as much as €372bn.
Ahead of crucial G20 talks this weekend, the London-based think tank has called for leaders to ditch its plans to boost the European Financial Stability Facility (EFSF) and push instead for a radical restructuring of Greek, Portuguese and Irish debt, as well as bank recapitalisation.
Yes, that\’s lovely, but that\’s one step behind the actual problem. The actual problem being, how do we get the interest rates on Spanish and Italian debt rollovers down?
For if we don\’t get those rates down then the two countries will be, as their debt rolls over, locked into paying high rates and will thus become insolvent.
Ireland, Greece and Portugal are just so yesterday as problems: remember, markets are forward looking things.