Originally posted by Paddy
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Trust the French to have a pair of tits on their (old) money
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What is Dirk Bogarde doing on a 100 Franc note?
Trust the French to have a pair of tits on their (old) money
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Hence the phrase "You wouldn't get many of those to the pound."Originally posted by Paddy View PostTrust the French to have a pair of tits on their (old) money
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The French downgrade should be a warning about hidden UK liabilities
The eurozone’s second-largest economy has lost its AAA rating. Eight other single-currency members were also downgraded. Given that Paris is bankrolling no less than a fifth of the purported “big bazooka” bail-out fund – the so-called European Financial Stability Facility (EFSF) – monetary union is now on very thin ice.
That is because, in the wake of Standard & Poor’s Exocet, the EFSF also could be downgraded. So the fund, too, would pay more to borrow, just as credit becomes more expensive for the newly downgraded countries it might need to bail out.
The likelihood the EFSF can do its job will fall, then, as the chances it will be needed, rise.
The question of whether the fund can “lever-up” from its existing €440bn (£364bn) (public money pledged, not delivered) to the €1,000bn-plus that may be needed if Europe’s banks endure “another Lehman”, is now under serious scrutiny.
Just five eurozone countries – Italy, Spain, Ireland, Portugal and Greece – have around €200bn of debt maturing between now and April. Can they refinance, pulling back from the brink of insolvency? Their chances just got worse.
Before we Brits gloat, let us remember that the main reason the UK remains triple-A status is that we’re “printing money” and using it to roll over our debts, the Bank of England creating new credits ex nihilo, then buying gilts from existing investors.
What Britain also has going for it, of course, is that the Coalition has forged a “credible” deficit-reduction plan. What “credible” means in today’s wacky world of Western government finance is that the UK’s plan is more realistic than total fantasy. The question is, how much more?
More from ze source: The French downgrade should be a warning about hidden UK liabilities - Telegraph
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