Europe’s bailout to end all bailouts

Stock markets across the world celebrated a trillion dollar eurozone rescue plan. Voters may not be so delighted

Topics: European Financial Crisis, How the World Works, European Union, Greece, Stock Market, U.S. Economy,

Europe's bailout to end all bailoutsPro communist protesters march during an anti government rally in Athens on Thursday, May 6, 2010. Greek lawmakers approved a crucial austerity bill Thursday needed to tap €110 billion ($140 billion) in bailout loans from other eurozone countries and the International Monetary Fund, as massive crowds gathered outside parliament to protest the measures. The bill passed with 172 votes in favor and 121 against. Greeks have been outraged by the government's proposed fiscal measures, and demonstrations turned violent on Wednesday during a nationwide general strike, leaving three people dead after becoming trapped in a burning bank torched by demonstrators. (AP Photo/Dimitri Messinis) (Credit: AP)

Investors like bailouts. The bigger the better. On Sunday, European leaders announced a $1 trillion plan to stabilize faltering eurozone countries and address the European financial crisis. The Wall Street Journal called the plan “audacious.” One European finance minister described it as a “shock and awe” commitment. And stock markets worldwide exploded in glee.

It’s not every day that you see the Dow Jones Industrial Average jump up 300 points right after the opening bell — and then keep going. 45 minutes later, the Dow was up 411 and other indices were following suit. The market euphoria can be taken not only as a sign of just how ambitious the bailout plan is, but also of how dire the European fiscal situation has become.

You Might Also Like

The bailout plan includes a commitment by the European Central Bank to start buying distressed eurozone and private bonds, ” to ensure depth and liquidity” in markets — something that the ECB’s president, Jean-Claude Trichet, had dismissed as a possibility just last Thursday. According to the Wall Street Journal the plan also employs “novel interpretations” of European Union treaties to get around various “no-bailout” clauses and prohibitions against member states assuming the debt of other member states.

But while market participants may be delighted, the populations of the nations that will assume most of the financial burden funding the bailout may not be so ecstatic. By making their commitment this weekend, European leaders made a clear statement that they intend to save the euro and preserve the unity of the eurozone. In the years — and elections — to come, we’ll find out if German and French and Greek and Spanish citizens support such “audaciousness” or decide to throw the bailout bums out.

Andrew Leonard
Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

More Related Stories

Featured Slide Shows

  • Share on Twitter
  • Share on Facebook
  • 1 of 10
  • Close
  • Fullscreen
  • Thumbnails
    Michael Ohl/Museum fur Naturkunde

    Soul-sucking 'dementor' wasps and 8 other crazy new species

    Soul-Sucking Dementor Wasp

    Latin name: Ampulex dementor

    Truong Ngyuen

    Soul-sucking 'dementor' wasps and 8 other crazy new species

    10,000th reptile species

    Latin name: Cyrtodactylus vilaphongi

    Jodi Rowley/Australian Museum

    Soul-sucking 'dementor' wasps and 8 other crazy new species

    Colour-changing thorny frogs

    Latin name: Gracixalus lumarius

    Judith L. Eger

    Soul-sucking 'dementor' wasps and 8 other crazy new species

    Long-fanged bat

    Latin name: Hypsugo dolichodon

    Neang Thy Moe/FFI

    Soul-sucking 'dementor' wasps and 8 other crazy new species

    Stealthy wolf snake

    Latin name: Lycodon zoosvictoriae

    Michael Janes

    Soul-sucking 'dementor' wasps and 8 other crazy new species

    Feathered coral

    Latin name: Ovabunda andamanensis

    Jerome Constant

    Soul-sucking 'dementor' wasps and 8 other crazy new species

    World's second-longest insect

    Phryganistria heusii yentuensis

    Nantasak Pinkaew

    Soul-sucking 'dementor' wasps and 8 other crazy new species

    Slide 8

    Latin name: Sirindhornia spp

    Tim Johnson

    Soul-sucking 'dementor' wasps and 8 other crazy new species

    Slide 9

    Tylototriton shanorum

  • Recent Slide Shows



Comment Preview

Your name will appear as username ( settings | log out )

You may use these HTML tags and attributes: <a href=""> <b> <em> <strong> <i> <blockquote>