There is No Plan!

Less than a week ago, the Belgium government announced that Dexia was to be "saved" by nationalisation.

As with any financial transaction, it is always wise to read the fine the print before signing on the bottom line. Sadly, for Dexia and Belgium, it seems that the Belgium government has not read the fine print.

Bloomberg reports that the European Central Bank has advised Belgium not to backstop Dexia SA’s interbank deposits, and to avoid providing guarantees on debt maturing within three months.

For why?

Because it risks interfering with the central bank’s monetary policy.

The ECB also said the planned debt guarantees for Dexia may last as long as 20 years, which is inconsistent with European Union guidelines for national support measures to be temporary in nature.

In other words, the Dexia "rescue plan" is against the rules.

It would appear that the "leaders" of the Eurozone are making it up as they go along.

In other news, it seems that the US will not fund any expansion of the IMF and that any rescue plan (not that there is one) for the Eurozone will have to be funded by the Eurozone.

Now repeat after me:

"There is no plan!"