From Zero Hedge:
"Very simply, the facts of the current environment in Europe don’t equal the conclusion that a coordinated effort will restore confidence. The fact of the matter is that European Sovereigns are massively indebted and European banks are massively under-capitalized.
The proposed solution of raising capital and issuing fresh debt to solve this issue is a joke. If I walk away from a home I owe $200k on and its fair market value is $100k (a 50% haircut), does a loan to my bank for $100K from the institution overseeing it change the impairment? No. You’re shuffling the cards. Instead of taking a $100k loss, they now have an asset worth $100k and a new liability of $100k. The asset is still worth $100k. Even though their little maneuver technically gives them an asset of $100k and cash of $100k, my bank now has $100K less to lend against. Thus, their leverage increases.
This analogy applies to European banks holding sovereign paper... and for that matter the countries themselves (ie Italy voting on whether Italy's debt should be purchased by the ECB/IMF/EFSF, etc).
At this point, any 'plans' are only slightly more creative than card shuffling tricks from a clown at an 8 year old's birthday party."
http://www.zerohedge.com/news/guest-post-facts-don%E2%80%99t-equal-conclusion-europe 
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Topic: Sarkozy/Merkel vs. Berlusconi (Read 2330 times)