Germany Refuses To Bail Out Italy


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:

Italian Economy Minister Giulio Tremonti said on Thursday that Asian investors are reluctant to buy Italian bonds because it sees they are not being bought by the European Central Bank.


Speaking at a news conference, Tremonti also said it would be desirable for the central bank to follow the lead of the Japanese and Swiss central banks in taking expansionary steps to tackly the euro zone’s crisis.


“I note that the Bank of Japan today launched quantitative easing and the Swiss cen bank cut rates to zero, we are waiting for decisions if possible, but desirable (from the ECB),” Tremonti said.


When you talk to Asia they say: “We don’t understand what Europe is,” he continued. “The second point is that they say ‘if your central bank doesn’t buy your bonds, why should we buy them”?

P.S. Time to unwind that Bund short we suggested yesterday. In fact, if true, it is time for a big rush to safety.

h/t London Dude Trader

One Response

  1. why should they bail out everybody in trouble. The end of story will be Germany and France got to pay or to grant far beyond of the original sense of the EU and this will be the end of a european dream not well thought and made vulnerable to the financial influences. Its about time to disolve all political entities everywhere, nations and hyper orgas like Washington and Brussels.

    Germany always does serve to be the shit can of all western civilizations since 1910, the hate of the brit crown-zionist-US-rael power block in the dark will not allow Germany to stand up and rule because Germans do have fair intelligence and social-labour driven energy not welcome to capital greed. History again repeats itself. While Germany is asked for help by Italy now CNN shows and reveals a nazi dirt in fascist Italy ages ago and all dear readers can do is swallow ANY manipulation.

    This is truly red alert to Germany as much as it is to the root of the US society mainly build on german speaking forfathers while we got to remember that is NOT culutural, ethnic but a capital monopoly game going on since the establishment of a National Bank in the US.
    Misreable greeks shouting on Germany too while Germany always have been the most generous neighbour to everybody and Greece being plundered by jewish bankers and corrupt political leaders. Story repeats and repeats but is always the same language of the same source.

    Whom may be surprised the German Reich (Empire of regions) got enough of it all and its folk starts fighting against lies, hate and fear? No one ever got the balls to fight the true big capital gangsters not even wikileaks, anonymous or the glorious brainwashed US society. No one can and will imagen that we can have in 5 minutes souvereign money again without debt and without greedy speculation attached. Anyone interested in this shall write the economist Horst G Ludwig and receive government proposals. anuvelas at gmail dot com.

    Do not allow that the bailout comedy and the rat system drives humanity into hate and wars again. Keep revealing, informing and keep suggesting, all people all over the world. We are all family and therefor we unite as such under Family Asociated in ong.asfam1 at gamil dot com. Get busy once for all because only a strong international representation can change all the situation into good if you want.

    This got to end while the only reason of money and stock crack down is the global money issued and controlled by the same evil source. You may want to shoot yourself the moment you figure out that I was right and you did not nothing to prevent it. Specially the little weak citizen got the power NOW and HERE. Wake up and dont mix your religious conviction with this by no means. A fundamental question to huamnity serves first and let we show our gods we are capable to handle this we created ourselves.

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