Can’t Rescue States With Deficits – EIB

This may hurt European pride

Can EU ignore Greece …

If Greece is left to fend for itself, it may reduce the credibility of the EU among its own member states.

European Investment Bank President Philippe Maystadt said the bank can’t rescue member states struggling with budget deficits.

“The EIB’s mission and statute do not allow for bailouts in terms of budget deficits or balance-of-payments support to individual member states,” he said in a statement posted on the Luxembourg-based lender’s Web site today. (via EIB Says It Can’t Rescue States With Deficits (Update1) – BusinessWeek).

The problem with EU

Race to the bottom ...?

Greece may turn out to be the acid test for the EU and the Euro. Britain and Sweden are suggesting that IMF is better suited to handle the Greek situation – rather than the ECB. Germany and France, being the economic and political leaders of the Euro-pride brigade, are worried about IMF entry into Europe.

The crisis has exposed the EU’s Achilles’ heel — states remain independent to spend as they wish, but their decisions can affect all 16 eurozone nations. Countries that help Greece risk having their own borrowing costs rise as a result, and could see other struggling eurozone economies get in line for aid. (from Star Tribune)

Meanwhile, the Greek Prime Minister winged his way to India – and announced that Greece will solve its own problem – and does not need either the EIB, ECB or the IMF.

Touche.