It\’s amazing! He\’s found it! Will Hutton has solved the eurocrisis!
The nascent European Financial Stability Facility needs to be doubled in size and turned into a fund that can lend to EU governments and their banks.
They\’ve been scratching around the world trying to find the money to fill the current sized fund. So this is a solution that depends again on that magic money tree thing so beloved of the left….
There should be a ¤250bn euro pan-European infrastructure programme underwritten by the European Investment Bank.
Ditto…..and I\’m sorry, but anyone who thinks that more infastructure investment is what, say, Spain needs is simply mad. What the place is currently undergoing is the pain from a couple of decades of malinvestment in infrastructure: not too little but too much.
The European Central Bank should offer unlimited long term loans to eurozone banks.
And that\’ll just boost the carry trade as banks borrow at 1% and lend into govt bonds at 6%. Which is great: except when the capital values of the bonds fall and all the banks then go bust.