Reports this week indicate that the investment and retail bank Dexia needs yet another bailout. That problem is shared by three countries: Belgium, France and Luxembourg. Something needs to be done about Dexia (now officially rebranded Belfius to avoid the stench of failure attached to its previous name) if anyone is to have confidence in the public finances of Belgium and France. Luxembourg has the money.
The Dexia case is particularly vexing because it is strongly responsible for purchasing French municipal bonds, plus Belgian municipals, and bonds for social service bodies. If Dexia imploded, so would an entire tier of government and public services in France and Belgium, which is why those governments won't let it fail.
But will it ever stop? This is another sign that the crisis for Europe is far from over.
The Dexia case is particularly vexing because it is strongly responsible for purchasing French municipal bonds, plus Belgian municipals, and bonds for social service bodies. If Dexia imploded, so would an entire tier of government and public services in France and Belgium, which is why those governments won't let it fail.
But will it ever stop? This is another sign that the crisis for Europe is far from over.
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