Tuesday, February 17th, 2009
The Germans are going to step in and backstop all Europe’s sloppiest economies. Imagine being a prudent budgeteer who is forced to pool a family budget with 20 of your neighbors, but having no voice in how they spend their money. How quickly do you think the credit card debt would add up?
German Finance Minister Peer Steinbrueck said euro-region countries may be forced to bail out other members of the 16-nation bloc that face problems refinancing their debt.
“Some countries are slowly getting into difficulties with their payments,” Steinbrueck said late yesterday in a speech in Dusseldorf. “The euro-region treaties don’t foresee any help for insolvent countries, but in reality the other states would have to rescue those running into difficulty.”
While declining to identify countries facing problems, the German finance chief said Ireland, which has a widening budget deficit, is in a “very difficult situation.” Ireland’s debt- rating outlook was cut by Moody’s Investors Service Jan. 30.