The mostly likely method for leveraging the euro zone’s bailout fund involves using it to provide bond insurance while combining its firepower with a special purpose vehicle drawing in funds from China or Brazil, European Union officials said.
After a summit of EU leaders on Sunday to try to come up with a comprehensive solution to the crisis, officials indicated that twinning two of the options for scaling up the 440 billion euro European Financial Stability Facility might end up securing broad backing, and the summit’s conclusions reflected that.
One official indicated that the special purpose vehicle could be attached to the EFSF itself, while others said it would involve the IMF. The options will have to be narrowed down by another summit on Wednesday. But Sunday’s summit conclusions referred to the IMF as a possible partner.
“The G20 should ensure that the IMF has adequate resources to fulfill its systemic responsibilities and should explore possible contributions to the IMF from countries with large external surpluses,” the conclusions said.
Export-giant China, which has the world’s biggest foreign currency reserves, is often referred to in G20 statements as an external surplus country. It has a sovereign wealth fund managing assets of over $230 billion.
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I believe the plan amounts to: A sucker is born every minute, lets hope its Brazil or China.
how about both?
Wouldn’t it be something if they passed the buck off to the G20 and said “We’ve decided on the IMF route, so you better make sure it has adequate resources if you don’t want us to drag you into recession.” Not in such direct language of course.
IMHO China or bust.
are you out of your mind? brazilian and chinese burritos will be served cold. the eurotrash will need time to learn how to shovel the shit. it wont take long.