It has been referred to as “the bazooka” — the 500 billion euro European bailout fund that after much dispute will have its first board meeting on Monday. Link
The euro zone finance ministers will meet today to discuss the effectiveness and reliability of the bailout fund concept put in place two years ago. With each country in the euro zone contributing to the fund, many questions remain about how the money will be used or even if enough revenue can be generated. By this Thursday, only 32 billion euros will be placed in the fund after the first installments. How do you feel this bailout fund will work? What concerns do you have with their strategy?
I feel more optimistic about the European bail out plan than I did about our us bailout. The difference I guess is the nature of the bail outs themselfs. The us bailout focued on failing business, which as we talked about in class, may actually hinder the economy in the long run. European stratagy is to save economies. This board hopefully will look at where the money.will be most effective and help out there. Not being industry spisific gives them more of a chance of recovery I think
ReplyDeleteTravis does bring a good point and it does make a lot of sense. I think Europe's plan is much better than ours was but the only question is will they fund all the money that the plan calls for. The countries are not supplying it all and they are counting on investors to contribute the rest. That to me should be a caution as it is unknown how popular those bonds will be. It will be interesting to see how much support investors give this idea, but I think they will get good support.
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