Wall Street Journal
December 17, 2010
European Union leaders gathered Thursday night in Brussels for their last scheduled summit of the year amid little optimism that their extraordinary efforts over the past year have resolved the debt crisis that has enveloped the euro zone.
In a manner unthinkable 12 months ago, they have secured commitments of close to €900 billion ($1.19 trillion) to rescue countries in crisis. They have agreed on a €110 billion bailout for Greece and a €67.5 billion rescue for Ireland. They were expected at this summit to agree on a permanent rescue fund to deal with crisis-hit economies after 2013. But it doesn't look like enough to stop the rot.
According to the International Monetary Fund, most of the countries on the euro zone's periphery will need to issue bonds equivalent or greater than a fifth of the gross domestic product in the 15 months to the end of 2011. For Spain, it's 19%; for Portugal, 20.7%; and for Italy, 24.6%. (That's not unusually high: the U.S. equivalent is 27.2% and Japan's 59.1%. But it's a lot if investors lose confidence.)
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