European Commission cuts interest rate

Some good looking news on the bailout rate:

This is about the EU contribution, which is distinct from the contribution of individual Member States so it’s in addition to what was decided by the European Council on July 21st. It’s a logical follow-on from that but, significantly, it applies to loans already drawn down.

Alas, while this will save us another chunk of cash, we’ll probably still be undone by the wider crisis even though there have been several glimmers of hope for Ireland in recent weeks.

Stephen Kinsella reckons that if the proposal had come from Dublin rather than Brussels it would be seen as a ‘controlled default’.

Gurdgiev reckons [ a default*is * (True Economics: 14/09/2011: Ireland & Portugal are allowed to restructure some of their sovereign debts)

I see RTE News ran with the idea that our interest rate has been cute to 0%. They updated the story about four times before clarifying that its the margin which has been cut. They’re not giving us cash at a loss; they’re just not charging us a premium any more.

Bit of an aside: Is it just me or has anyone else noticed that the RTE site has gone to the dogs lately? All morning Sunday it led with a wire story about how Obama was due to attend a memorial service in New York. Big news. And yesterday they briefly had a headline referring to the “Brendan Drumm sage” when they meant to say “David Drumm saga”. Wrong Drumm, and they can’t spell ‘saga’. |O

Wow. The Politburo must be really scared. :open_mouth:

Re: the rte website I find it invaluable to find out the latest on what cheryl cole is up to or what z list celeb from the soaps happens to be keith cheggars. I mean lets get our priority right enough of yer auld doom and gloom wha.

I would have thought confirmation - from Barroso - that Euro Bonds are now firmly on the table is bigger news. That sounds like a genuinely game-changing move.

Yes and no. He’s formally putting it out there but it’s still a long way from a Commission proposal on something like this to sign-off by the European Council (Merkel/Sarko and 25 lesser mortals).

Rubber-stamping this interest rate cut is less likely to meet with resistance.

I wonder is this to prevent the markets turning on us & Portugal when they come with some demented news on Greece later today.

It should save us about €330m p.a. interest on the €11bn or so already drawn down, about €660m if we use the full €22.5bn.

Note that these are proposals at this stage.

Mr. Barroso can witter on about eurobonds all he wants. They are not the solution to the current crisis, indeed they threaten to widen it to countries not currently affected. The solution for too much debt is not more debt.

Eurobonds do, I believe, have their place - pan-european infrastructure projects that would provide some measure of economic stimulation and would result in a eurobond agency owning some or all of the infrastructure constructed. As such, they would be asset backed by new ventures and receive an income stream from them (so would be self-financing). This is sort of what the EIB does, but on a larger scale. Investment should be on an anti-cyclical basis.

Very jittery stuff. The Austrians rejected adding the discussion of the EFSF expansion to their scheduled meeting agenda, preferring to consider it at a special sitting.

The wires got it wrong, interpreting the meeting plans as the Austrians rejecting the EFSF expansion itself. The DOW fell 112. The wires corrected their mistake and the DOW is creeping back up again. … d=yahoo_hs

Never a dull day, as ZH puts it … sd-plunges

Its pure politics. Designed to divide the other defaulters from Greece and prevent the formation of a debtors block within the EU zone.

As for EuroBonds, aint go to happen. Last weeks decision in the Constitutional Court guarantees that the Rieichsrat has the final say. And even if they finally agreed to some kind of bond the EU political command and control loop is measured in months whereas they markets react in days. So all political decisions are so far behind the curve as to be meaningless except as a delaying measure.

The only thing that can save them now is Iran going nuts, China invading Taiwan or the big Icelandic volcano blowing up.

David Beggs and co licking their lips at The few billion a year that will be saved on all our invetiable borrowings from Europe. Expect calls for slower adjustments, borrow more “sure we;d be mad not to borrow at ECB rate” etc etc

Ah, the butterfly theory… oh look, there’s another one…

It’s been a while since we heard the term “events” around here.

I feel “events” are about to start happening again.