Have a look at the previous PIIGSty post on the EFSF. Strong misgivings abound in eurozone (EZ) governments about being seen to ‘give in to European excesses.’ Its not just in relation to growing the EFSF fund. It turns out that these countries need some extra ‘convincing’ from Greece to keep their support for their 2nd bailout onside.
‘Convincing’ = Greek cash deposits in exchange for loans. This is effectively shaking down Greece for some cash guarantees (bit like picking a fight with a 50lb weakling at this stage). Where would Greece get the money? Loans. You guessed it – some friendly EZ countries want Greece to borrow some money, guarantee them so they can loan Greece money. Perfect sense. Why? Politics. Again. Seems like the July 21 summit is bordering on the Versailles Treaty 2.0
So far 5 countries want some sort of back-up guarantees – Austria, Finland, Slovakia, Slovenia and the Netherlands. To date, the Greeks have only agreed a deal with Finland (with a strong euro-sceptic opposition party, an increasingly euro-sceptic public and the power to veto the Greek 2nd bailout deal agreed on July 21). The worry is…that as Finland goes…so goes the rest…?
Official PIIGSty Conclusion: Europe is wasting more time. Without deft leadership and a united response, EU/eurozone leaders are acting like vultures picking at the near dead corpse of a fallen colleague.