Clutching at straws

The latest news from the Euro Summit is that they are considering a plan to grant a banking license to the ESM bailout fund.

I'm trying to work out the real meaning behind their cunning plan.

Is their hope that by making the ESM a bank it could make fantasy finance instruments like CDSs and CDOs that American banks made so much money from before the first Credit Crunch?

Is their hope that by making the ESM a bank it will be a candidate for bailouts? The ECB has said that it will not pay into the ESM (and actually it is probably not allowed to by law) but they thought it might pay into the Bank of ESM.

Is their plan to move the ESM to New York or London to get the American FED or Bank of England to bail it out like other banks?

Thankfully even Germany's Angela Merkel realises that this one is just too silly and has vetoed it.


Also rejected:

- making the EFSF and ESM run simultaneously (the ESM is supposed to be a permanent replacement for the temporary EFSF).

- common Euro bonds (Germany does not want to pay for the Euro, but the Euro can't continue without it)


The grasping at plastic drinking implements continues...