As the finance ministers from each of the 17 members of the eurozone meet in Brussels yesterday, the main topic was “integration.” It’s a race against the clock.
One of the first items being discussed is putting in place the leveraging of the stability fund—otherwise known as the EFSF, or European Financial Stability Fund. At present, this fund holds some $600 billion in assets, much of which has already been invested in government bonds issued by the eurozone’s weak sisters: Ireland, Greece, and Spain. The leveraging, through some opaque maneuvering, will then allow the fund to do some serious purchasing of enough of Italy’s debt to solve two problems at the same time. One is to bring down interest rates to some level that Italy may be able, in the short run, to afford to pay. And the other is to give