29th June 2012
Overnight we have seen yet another claimed deal to save the Euro made just in time for Italian Prime Minister Mario Monti’s “We have a week to save the Euro” deadline. Expectations were not high before the summit at least partly perhaps because it was as Paul Hardcastle put it number.
"Nininini Nineteen, 19, Ni-nineteen 19 19,19,19,19"
What was it going to do that its eighteen predecessors had not? Let us take a look at its claims for success and progress.
The Summit Statement
This provides us with three claims for progress. Let us look at them
"The Commission will present Proposals on the basis of Article 127(6) for a single supervisory mechanism shortly. We ask the Council to consider these Proposals as a matter of urgency by the end of 2012."
They mean a Euro area wide joint supervisory system for banks. And whilst noting that their definition of urgency is “by the end of 2012″ (!) then once it is in place the following will be able to happen.
"the ESM could, following a regular decision,have the possibility to recapitalize banks directly."
The ESM is the European Stability Mechanism and it is the new “improved” bailout fund which will replace the unstable lifeboat that is the current EFSF. As we move on I would just like to draw your attention to the use of the words “could” and “possibility” in that sentence.
Then we get some details specific to the country currently most needing help Spain.
"We urge the rapid conclusion of the Memorandum of Understanding attached to the financial support to Spain for recapitalisation of its banking sector. We reaffirm that the financial assistance will be provided by the EFSF until the ESM becomes available, and that it will then be transferred to the ESM, without gaining seniority status."
It is important to note that this happens for Spain only after the two previous suggestions have taken place. And that at this stage they are proposals which are to be ready by the end of the year at one point in the document or earlier as it also states.
"We task the Eurogroup to implement these decisions by 9 July 2012."
As ever there seems to be some confusion as to the timetable.