It Just Went From Bad To Far, Far Worse As Germany Says Italy Is Too Big For EFSF To Save, Refuses To Carry Euro Bailout Burden
by Tyler Durden
Remember when we said (yesterday) that Germany will soon balk over the fact that it is pledging its entire economy to bail out an insolvent Europe? Well, that moment has come.
Dow Jones just hitting the tape referencing Spiegel
German Govt: Italy Too Big For EFSF To Save – Spiegel
German Govt: Doubts Whether Tripling EFSF Would Help It Save Italy
German Govt: Italy Must Make Savings, Reforms To Exit Crisis – Spiegel
Italy Debt Guarantee Could Raise Doubts Over Germany’s Finances – Spiegel
German Govt: EFSF Should Only Help Small, Mid-Size Countries – Spiegel
As a reminder, yesterday’s stopgap announcement by the ECB to expand its SMP purchases of secondary market Italian and Spanish bonds was merely as a precursor to full EFSF monetization until its comes fully online in September (or sooner) in a vastly expanded format (between €1.5 and €3.5 trillion).
If Germany is now against this, which appears to be the case, it pretty much means, well, game over.
Add the uncerainty over the unwind of the Europe rescue “gamechanger” as one of the more naive CNBC anchors said yesterday, and Monday is now guaranteed to be a bloodbath.
As for those saying China will gladly step in and fund a $5 trillion EFSF shortfall, they may want to read the following article from Reuters: