Update: Germany Just Said, You Know It, Nein; Eurobeggars Continue To Be Choosers;
- GERMANY WON'T ACCEPT NEW ANTI-CRISIS INSTRUMENTS - GERMAN SOURCE *DJ
Maybe the Italian football team should have bent over just a little.
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Today's edition of the Eurosummit is over. There was some news, however, as always happens, there is a twist:
- EU LEADERS HAVE AGREED A GROWTH PACKAGE OF 120 BLN EUROS BUT ITALY AND SPAIN NOT PREPARED TO SIGN OFF ON IT - EU OFFICIALS - *DJ
- ITALY WON'T SIGN ONTO GROWTH PACT UNTIL BOND BUYING DEAL
So beggars continue to be choosers, as Italy and Spain will not agree on getting aid (!) until Germany relents on buying their bonds. There was a reason why in the summer of 2011 we said that as the Game Theory equilibrium shifts to defection, he who defects first, defects best. Well, Greece is now leaps and bounds ahead of everyone as the global ponzi unravels. And so the posturing for second place is now on. We can't wait for the official German response, to both this, and to the loss by Italy in Euro2012.
EU leaders have agreed a package to stimulate growth in their economies, but Italy and Spain have refused to sign up to it because they want Germany to approve short-term measures to ease their borrowing costs first, EU officials said.
European Council President Herman Van Rompuy announced the 120 billion euros ($149 billion) deal at a news conference, saying it would consist of more capital for the European Investment Bank and project bonds for infrastructure.
But Italy, Spain and some other countries want the euro zone to agree steps to help bring down their high borrowing costs first, including steps to buy their government bonds in order to bring down yields.
"We're in favour of the growth pact and there is a deal on the content, but before we sign it we want a comprehensive deal including short-term measures," a Spanish government official said.
Another official said that France, the strongest backer of the growth pact, had also raised concerns about a deal in part because it does not want stricter measures on budget restraint to be introduced as soon as planned.
Essentially what Spain and Italy are saying is that someone has to buy or else. Well, someone will buy. At the right price. Dear PIIGS: here is a very simple lesson in economics:
What we also learned is that all that matters is tomorrow, the long-term is irrelevant. Which it is: when the Ponzi collapses one only hope to live day to day.