Confused by “Eurobonds”? Here’s an explanation:
The Greeks in an orgy of “we-can-do-it-so-we-will; someone-else-will-pay” borrow €56 billion from French banks but have run out of money and can’t repay their loan and no one will loan them any more.
France hits on a wheeze to produce eurobonds (or if you prefer “Stability bonds” – Olli Rehn’s brilliant marketing idea, the kind of thing for which he is paid a vast chunk of your money plus equally vast expenses – and does this cunning plan remind you of “subprime mortgages” perhaps?) that all countries will buy and the cash passed to Greece who will pass it on to French banks. (Ed – why not by-pass Greece and pass it straight to France?)
Everyone will be happy. The Greeks pay their debts so they can borrow more. The French banks are no longer insolvent and all the debt is passed on to all those mug enough to buy the eurobonds.
Only for the moment there’s a hitch – Germany is not quite such a mug as Snarlkozy et al think ………
acknowledegements to Ratcatcher2011 on “The Telegraph” blog: 21-11-2011