Euro Rumormill Disintegration Begins As Reality Returns: France, Germany Fail To Reach Agreement On EFSF

Tyler Durden's picture

In our previous post we warned, indirectly through the IMF, that the biggest risk for Europe is the inability to reach consensus over anything from the most complicated, to the simplest matter. As noted previously, one of the main initial drivers of the market surge which has since translated into yet another short covering rally of epic proportions was the belief that Europe can actually come together in agreement over the simplest thing - like its own survival. Alas, it appears even that is not the case. As Bloomberg reports, "Germany and France are at odds over whether the European Financial Stability Facility should have limits on government bond purchases, Handelsblatt reported, citing an unidentified high-ranking European Union diplomat. France doesn’t want to restrict the EFSF on how much of its funds it can use for such purchases, the newspaper said in a preview of an article to appear in tomorrow’s edition. Germany wants to limit the amount EFSF can spend for bonds per country and is also considering whether there should be a time limit for bond purchases, Handelsblatt said." Said otherwise, here comes the latest cause of discord within Europe. Unfortunately, it also means that any rumor, innuendo and speculation that Europe has finally reached a coherent union over its own bailout can be promptly discarded. As if there was ever any doubt in the first place.

From Handelsblatt:

In Berlin and Paris argue about EFSF


Exclusive The euro rescue package to buy bonds from future debts States. But with how much money? France wants to give the fund a free hand - for the rescue could not stay no longer enough to fear Germany.


Brussels is a dispute between Germany and France erupted over the extent to which the euro rescue fund future EFSF may buy government bonds. France wanted to make the EFSF this respect no rules, told the Handelsblatt by a senior EU diplomat. This would theoretically mean that the EFSF could not use its entire volume of funding expended to buy bonds of a single Euro-state.


EFSF has a total of 440 billion euros, has been a part of it, however, scheduled for the loan packages to Ireland and Portugal. The federal government wants to limit the amount used for bond purchases per euro government, it said in Brussels. Think Germany will also share in a time limit on bond purchases.


The purchase of government bonds is one of three new instruments may have on the future of advanced EFSF. The design of these new instruments will be governed by guidelines to deal with the high officials of the euro finance ministers in Brussels at present. The guidelines must then be approved by the Budget Committee of the Bundestag. The German Parliament has made this a condition for agreeing to extended EFSF.

Cue the FT, Liesman, and/or some IMF guy we have never heard of with attempts to deny what is painfully obvious: Europe will never reach a consensus because the ultimate price of a European bailout is the absolutely certain suicide of the currently ruling political class. Alas, none of those bureaucrats wants to (or can) do anything else but "rule"...

And if the IMF advisor is right, Europe has less than a month to prove us wrong.

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Hmm...'s picture

Rumor alert:

Europe will be the 51st state of the United States of Cramerica.

Ahmeexnal's picture

It's been just that since the mid-40s.

Frog-And-Toad's picture


Don't forget Japan and Korea... We shipped our industry overseas after WWII to buy friends at our expense... 


Problem is the latest generation doesn't know anything different.  They realize that they don't need to slave for us for saving them after the war.   What are we bringing to the table now?

Troll Magnet's picture

oh cool! i love asian women!

Bicycle Repairman's picture

"because the ultimate price of a European bailout is the absolutely certain suicide of the currently ruling political class. "


Ethics Gradient's picture

We shipped our industry overseas so that we could buy their goods with money we borrowed from them.

Buy hey. It's an improvement. Using credit cards is so much easier than working.

Xibalba's picture

how is Portugal part of europe anyways? 

mynhair's picture

Ever look at a map?  Used to be part of Andorra, I bet.

And that was a protectorate of Monaco, at one time, before Malta conquered it.

Troll Magnet's picture

no taxes in monaco i hear. that sounds so nice..

DaBernank's picture

It's nice here in Hong Kong.

bid the soldiers shoot's picture

cup of coffee. =. $30.00 and up

cup of coffee. =. starting at $25.00

Don Diego's picture

No, but try to live on a non-millionaire salary there

knukles's picture

I keep tellin' folks there are problems with Arkansas schools.

mynhair's picture

61, you, like many others, don't listen.

"been in 57 states, with 1 left to go.  Wasn't allowed by my staff to go to AK and HI"

Tried an inhalator yet?

What a moron that Kenyan is.

And to you ODummer supporters out there, this is a response to the response to the quip about..damn, confused them....

Looney's picture

Cr... Cram... Cram-mogadishu...

If I were a pepper spray company, I would've switched to charging the Maze cans with Cramer's stench.

Here's the TV ad - "One gentle push on the Red Button and... your assailant, his family, friends, YOUR family and friends, neighbors, enemies, and the enemies' dogs are screwed beyond repair".

P.S. I wear fur (my first dog's) AND I approve this message!

Looney  ;-)

NotApplicable's picture

Just paving the way for the inevitable IMF bonds.

Spitzer's picture

yeah, funded with US dollars.

None of this is surprising me.

Europe doesn't want to print, is it not obvious yet ?  And don't worry, that doesn't mean gold will go down. Just the opposite actually.

agent default's picture

The ECB will not print to bail out the PIIGS.  They are saving their firepower to resque France and Germany when the time comes in about six months to a year.  But in the end they will print.  And then some.

DormRoom's picture

Germany is planning an exit.  France wants Germany in a leverage EFSF, so it doesn't end up  holding the bag, and there's a mutual assured destruction, to check its regional power rival, if the CDO2 ends up imploding.

Germany already has an exit message: The bond purchasing by the ECB contravenes article 123 of the Maastriche Treaty.  And Germany will not accept...

xtop23's picture

 Jesus just collapse already Im getting bored

Sophist Economicus's picture

Why do you want Jesus to collapse? He doesn't want no stinking bonds either

Ahmeexnal's picture

He's a Puerto Rican trader working at GS.

vote_libertarian_party's picture

So the bailout needs a bailout.


Owwwwwe, that'll be good for another 2% rally tomorrow in Bizarro World.

mynhair's picture

Just in time to screw with the overnites....big surprise.

To be refuted around 7:30am EST, no doubt.

knukles's picture

Gotta have sumptin' to ridicule. 

mfoste1's picture

this is getting HILARIOUS.....

paul_Liu's picture

Why this is not reflectd in the AH market.

sheeple2012's picture

All trading has been halted until the rumor/hopium/green shoots still can be fired up again at 8 am tomorrow to coincide with the HFT machines hitting their own offers every nanosecond like clockwork 

TheFourthStooge-ing's picture

All trading has been halted until the rumor/hopium/green shoots still can be fired up again at 8 am tomorrow to coincide with the HFT machines hitting their own offers every nanosecond like clockwork

During this halt, the HFT machines are being juiced with the binary equivalent of coke, hookers, and jimsonweed.


Spider's picture

Whatever!  The french and the germans always play nice together - I mean other than the Napoleanic wars, WWI, WWII, and a few other minor conflicts they get along fine.

Nothing to worry about folks ... right?

combatsnoopy's picture

that makes me feel warm and fuzzy inside, esp knowing that MY TAXDOLLARS were robbed by my government for the benefit of the "best and the brightest" of our country at Morgan Stanley and Goldman Sachs- both whom exposed themselves ON MY TAX DOLLARS to French banks (SG, Dexia and BNP Paribas).  

Before the NYSE merged with the German bank exchange. 

I'm not so sure about this hedging strategy. I prefer the Asia-Pacific rim, Argentina or maybe a tax haven like our lobbyists.  


optimator's picture

1871 Franco Prussian wasn't minor and should be listed. 

mynhair's picture

"unidentified high-ranking European Union diplomat"

Wish that fat pig, Michael Moore, would die of a pie overdose.


"Pass this bill!"

buzzsaw99's picture

ditto for rush limburger

CompassionateFascist's picture

Actually not, you stupid f^^k. Limbaugh reads this site, references it on air, and occasionally learns something from it. Michael Moore? Busy studying the Communist Manifesto for New Ideas.

Troll Magnet's picture

i don't care what your political persuasion is but anyone who takes a crack addict like rush limbaugh seriously should get their heads examined. michael moore? well, he's just a socialist who got rich playing the capitalist game.

PY-129-20's picture

Oh I am tired of these jokers. Let them fight in some remote desert arena. I'd pay to see that. But no survivors. Next: Krugman vs. Coulter.

Hey - all I am saying - no left/right bullshit. There is a common ground for both sides. Sheesh - I hope you don't do something stupid like another civil war or something like that.

catacl1sm's picture

THUNDERDOME! 2 go in... 1 comes out.

Coulter would kick Krugman's ass.

catacl1sm's picture

double post, really? need to get check for parkinsons


buzzsaw99's picture

wow, a bold comment. heh heh


Hey Rush, suck my ballz.


Limburgher = fat, greasy, drug addled, ass muncher retard

buzzsaw99's picture

actually CompassionateFascist, you can have a lick too since you and limburgher are butt buddies.

Schmuck Raker's picture

Would you say that's your Compassionate side, or...?

buzzsaw99's picture

he is in touch with his latent repressed homosexual rage. lulz


edit: after some research it appears that CF bolds all his comments. For example:

Almost everyone on this site looks at the oncoming economic collapse....but the political system is also core-rotten and nearing collapse. Put the two together and you get the Thing Which Has Yet To Be Named. TSA? Both the upper echelon Oinks (Bankers, plutocrats, politicians) and lower echelon Oinks (TSA, public employee unionists, urban libs...those currently "occupying Wall St") are going to be hunted to extinction.


Now what would his buddy Rush think of that? BREEHEEHEE!! 

edit #2: CF wrote: End the Fed. Liquidate the banksters. Break the Zionist/Communist JewPower.

OMG!! Mi Hermano! Fantastico! Goy power! GIVE US A KISS! :*)

TheFourthStooge-ing's picture

"unidentified high-ranking European Union diplomat"

Wish that fat pig, Michael Moore, would die of a pie overdose.

Even better, a house falling from the sky on Ann Colter while engaged in a retard argument (shouting contest) with Michael More, mashing them both into a paste.


hambone's picture

WAIT - this just in...France has voted to discontinue the French language, baguettes, and the Tour de France...all further details regarding these triffling matters will be communicated via Frankfurt, Berlin, and the high atop Berchtesgaden.

Wait...sorry, that's tomorrow's's rumor tbd asap...definitely gonna be bullish though!!!