Thu September 29, 2011
Germany's OK Of Bailout Means Europe Can Continue To 'Muddle Through'
Word that Germany's parliament today "approved a plan to expand the power of a European bailout fund for troubled countries that use the euro," doesn't mean the crisis across the Atlantic is over, our colleague Jacob Goldstein writes over at the Planet Money blog.
"Germany isn't rescuing Europe," Jacob writes. "It's just signing off on a bailout plan that Europe's leaders agreed to months ago — a plan that clearly won't be enough to solve Europe's problems.
"So the implications of today's vote were asymmetric. A rejection from Germany would have meant immediate economic chaos in Europe and beyond. German approval only means that Europe can continue to muddle through for a few more weeks or months, until the next phase of the crisis."
That's pretty much the same thing being reported ...
"Passage in Germany — Europe's largest economy and the only country with the fiscal wherewithal to pull fellow countries in the euro currency zone out of trouble — moved the struggling rescue forward. But analysts said it was likely to offer only momentary relief rather than anything like a permanent solution."
"While Thursday's vote is a crucial step, there is plenty left to be done as deals still need to be cut on private sector participation in any rescue — in other words, how much of a haircut bondholders will take on Greek bonds — and finding the right mix of austerity measures and revenue raising to restart economic growth."
And by The Guardian:
"The result was a triumph for Germany's shaky coalition government and marked a major step towards tackling the eurozone's sprawling sovereign debt crisis. Some analysts, though, argue that more radical measures will be needed."
Still, there is this, from Bloomberg News:
"Stocks rose and Treasuries fell after U.S. reports tempered concern the economic rebound was in jeopardy and German lawmakers backed expansion of a European bailout fund. The euro strengthened and Greek bonds surged."