Monday, March 02, 2009

We are one Union!

Bloomberg is telling us that Eastern (and Central) European stocks have dropped to the lowest in 5½ years. Hungary's forint fell the most in a month. Bank shares are nose-diving as investors flee, amid "concern that companies and consumers will be unable to repay foreign-currency debt as plunging exchange rates increase borrowing costs."

And all because the EU leaders said no to a €190 billion handout!

Hilariously – from the school of, you have to laugh or you'll cry – little José is saying that eastern Europe doesn’t need special treatment (i.e., a €190 billion loan) as it can draw on €15.4 billion in the EU's balance-of-payments assistance fund. The countries are also eligible for €7 billion of accelerated infrastructure subsidies, he said. "We are one union, not two unions or three unions," bleats Barroso.

Now, let's get this straight. The eastern/central countries want €190 billion (they would actually prefer €300 billion) to stave off a fate worse than Ambrose. Little José is saying they can dip into a fund of €15.4 billion shared between all member states, with a top-up of €7 billion. And that solves the problem?

Good thing it's only one Union, isn't it. I don't think we could take any more.