RUTHFULLY YOURS

After another shameful assault on democracy, EU leaders can now go ahead with their EFSF euro bailout plan. But it’s doomed from the start and could cost taxpayers trillions

So, it’s all smiles in Brussels again.

Slovakia’s parliament duly did as it was told on Thursday and reversed Tuesday’s rejection of the European Financial Stability Facility (EFSF) – the bailout plan which is supposed to save the continent’s crisis-ridden southern flank, and with it the euro itself.

The EFSF is a 440 billion euro package.

But if you think that’s a lot of money to be wasting on countries that will never be able to pay it back, just wait for this. It is widely mooted that the next move from Eurozone leaders will be to leverage that sum and borrow at the rate of five or ten fold.

The overall sums of money we’re looking at are therefore in the region of 2-4 trillion euros.

That is one hell of a gamble whoever you’re betting on. But if you’re betting on the likes of Greece, Spain, Portugal and Italy chances are you’ve got more money than sense.

But that’s not quite right, is it?

It isn’t their money that Europe’s leaders are gambling with. It’s the European taxpayers’ money. And that makes all the difference when it comes to rational decision making in a conflict between dogma and basic common sense.

As Charles Dumas, Chairman and chief economist at Lombard Street Research told the BBC earlier this month: “The problem is that the Club Med countries – Greece, Italy, Spain and Portugal – are not competitive. Even if they agree to writing down Greek debts and increasing the EFSF, that will only be successful in postponing the issue for a few more months. It won’t stop debt going up.”

What this means is that since these countries are unable to devalue, they are locked into a single currency which is far too strong to enable them to grow their way out of their problems.

And that means they’ll never be able to pay back their debts.

In one of the most irresponsible moves in economic history, European leaders are throwing good money after bad.

And they’re doing it because they simply cannot accept that these countries should never have joined the Eurozone in the first place and that the only rational way forward now is for them to leave it in as orderly a manner as they possibly can.

And so it goes.

The beloved “Project” must be saved, whatever the cost, whatever the risk. But as we noted above, the cost will not be borne by the people who are taking the risk.

The euro, as we know it, is doomed, and its fate is being sealed by the leaders of Europe themselves.

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