Friday, November 26, 2010

How Europe's Massive Rescue Fund Could Fall Short

Wall Street Journal
November 25, 2010

The €750 billion (about $1 trillion) European emergency fund, promoted as having the firepower to douse a financial crisis in the euro zone, may not even have enough to cover a bailout of Spain, according to the International Monetary Fund and outside economists.

The reasons are two-fold: There is a lot less money than the headline number suggests—and there are restrictions on the use of a lot of it.

The European Union, for instance, can provide around €310 billion for rescue loans, not the €500 billion the EU advertises.

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