Wednesday, May 30, 2012
Assets to be pledged for debt?
Southern Europeâ€™s debtor states must pledge their reserves and national treasure as collateral under a â‚¬2.3 trillion stabilisation plan gaining momentum in Germany. The German scheme â€” known as the European Redemption Pact â€” offers a form of â€œEurobonds Liteâ€ that can be squared with the German constitution and breaks the political logjam. It is a highly creative way out of the debt crisis, but is not a soft option for Italy, Spain, Portugal, and other states in trouble.