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dipsydoodle Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Nov-28-11 03:10 AM
Original message
Asian shares up on speculation of IMF bailout for Italy
Edited on Mon Nov-28-11 04:09 AM by dipsydoodle
Source: BBC News

Asian shares rose on Monday on speculation that the International Monetary Fund (IMF) was preparing a bailout package for Italy.

The Nikkei 225 index rose 1.6%, South Korea's Kospi gained 2.2% and Australia's ASX 200 added 1.7%.

This was after Italian newspaper, La Stampa, reported that the IMF was preparing a 600bn euro ($794bn; 515bn) loan for Italy.

The IMF has denied talking to Italy about a deal to cut its debt costs

Read more: http://www.bbc.co.uk/news/business-15914108



On the BBC LBN News banner it actually reads : LATEST:

The IMF denies talking to Italy about a deal to cut its debt costs.

:shrug:

Other news on subject here : IMF drawing up 500bn package to save Italy, Spain and the euro.

The International Monetary Fund is being lined up potentially to help Italy and Spain amid growing fears that a European rescue scheme will not be able to prop up the countries.

http://www.telegraph.co.uk/finance/financialcrisis/8919...

Eurozone crisis live: breakup fears grow as IMF denies Italy rescue.

http://www.guardian.co.uk/business/blog/2011/nov/28/eur...
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Ghost Dog Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Nov-28-11 03:56 AM
Response to Original message
1. European finance ministers ... met and disclosed that IMF involvement was under discussion
Edited on Mon Nov-28-11 04:26 AM by Ghost Dog
Under the scheme set to be discussed, the euro areas European Financial Stability Facility (EFSF), would have to insure bonds of troubled countries by covering the first 30 per cent of any unpaid debts.

To offer this guarantee, the European bail-out fund would have to be able to raise 1.4 trillion a threefold increase compared to the current size of the scheme.

Last night, it was not clear if or how this money could be raised, although the EFSF may itself sell bonds to international investors.

At the weekend, European finance ministers from Germany and the Netherlands met and disclosed that IMF involvement was under discussion. Wolfgang Schauble, the German finance minister, said yesterday he was confident that the euro would be saved and go on to become the most stable currency in the world.

/... http://www.telegraph.co.uk/finance/financialcrisis/8919...

Also:

... "The goal is for the member states of the common currency to create their own Stability Union and to concentrate on that," German Finance Minister Wolfgang Schaeuble told ARD television on Sunday.

Another option being explored is a separate agreement outside the EU treaty that could involve a core of around 8-10 euro zone countries, officials say.

An even more pressing decision faces euro zone finance ministers when they meet on Tuesday.

Detailed operational rules for the euro zone's bailout fund, the European Financial Stability Facility (EFSF), are ready for approval, documents obtained by Reuters showed.

The approval of the rules will clear the way for the 440 billion euro facility to attract cash from private and public investors to its co-investment funds in coming weeks, which, depending on interest, could multiply the EFSF's resources.

/... http://uk.reuters.com/article/2011/11/28/uk-eurozone-cr...

See also:

... Extinguishing the existing debt and funding ongoing needs by the ECB would certainly be much less inflationary than flooding the market with Euros in order to maintain the status quo. While any imposed solution is going to be an affront to the concept of democracy, the tone of this one would at least probably be grudgingly accepted by most of the parties electorates. The fiscally conservative countries could at least hope that the ECB printing presses dont send inflation running and the aid recipients populace would hopefully see that their diminished living standards are preferable to the depression they were staring down.

What becomes of the banks that are forced to eat the losses is another matter. Germany, France and a few other countries are going to have to cope with massive recapitalisation to the detriment of their economies. It remains to be seen if bank creditors will finally pay a price, but at least the plan would provide time for an orderly reorganization as opposed to the hysteria that would most likely result from a collapse of the EU.

I suspect that something along the lines of what Jenkins has outlined will come to pass. In some respects this all seems creepily like the period leading up to the passage of TARP. All sorts of plans floating about, predictions of the end of at least banking as we knew it in the US, hard positions and politicians taking everything up to the brink. And then we muddled through.

/... http://seekingalpha.com/article/310284-the-endgame-in-e...

:shrug: indeed :shrug: .
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DCBob Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Nov-28-11 04:39 AM
Response to Original message
2. Its hard to imagine a country like Italy to be in such dire economic straights.
I hope this bailout works but it sounds like some difficult days ahead even with a best case scenario.
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Ghost Dog Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Nov-28-11 07:06 AM
Response to Reply #2
3. Everybody should know that countries like Italy and Spain are good for the money
as long as they are not charged usurious rates.
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DCKit Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Nov-28-11 07:22 AM
Response to Reply #3
4. Since when does ANY country walk away from the IMF intact and unscathed? nt
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