It seems that the relationship between Germany and the USA has taken a nosedive.
The Telegraph reports that German finance minister, Wolfgang Schauble, has said that it would be a folly to boost
the EU's bail-out machinery (EFSF) beyond its €440BN.
"I don't understand how anyone in the European Commission can have such a
stupid idea. The result would be to endanger the AAA sovereign debt ratings
of other member states. It makes no sense."
He then told Washington to mind its own business, after President Barack
Obama rebuked EU leaders for failing to recapitalise banks and allowing the
debt crisis to escalate to the point where it is "scaring the world".
"It's always much easier to give advice to others than to decide for
yourself. I am well prepared to give advice to the US government."
In other news, the FT reports the following:
split has opened in the eurozone over the terms of Greece’s second
€109bn bail-out with as many as seven of the bloc’s 17 members arguing
for private creditors to swallow a bigger write down on their Greek bond
holdings, according to senior European officials.
The divisions have emerged amid mounting concerns that Athens’
funding needs are much bigger than estimated just two months ago. They
threaten to unpick a painfully negotiated deal reached with private sector bond holders in July."
The French are really panicking about the deal unravelling because, were it to do so, it would expose how under capitalised French banks really are as the banks would be forced to take a greater hit (one that they cannot afford).
The recent market rallies have been based on leaks spread by those with an interest in seeing a rally at month end, and by the gullible media.
Don't fall for the hype, there is no bailout plan!