Wednesday, October 12, 2011

Too little money to save both banks and countries

A twist in Slovakia's politics today: the expansion of the EFSF has been passed with the help of the opposition. New elections are planned to replace the collapsed government.

Also news that the Franco German summit this last week involved France seeking to use the new funds in the EFSF to prop up the Franco-Belgian bank Dexia. Dexia was nationalised this week, and already, the municipalities of northern Belgium, the Dutch-speaking area of Flanders, are getting slammed by the credit rating agencies. Many of them invested their capital in Dexia and are apparently the first victims of the bailout.

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