October 24, 2011 8 Comments
Like the rest of you, I wake up daily with bated breath in anticipation of whether Europe will Technocratically Solve Its Financial Problems by sneaking through just the right clever accounting trick in a Summit With Important European People. Each and every day, the headlines coming in over the tape tell the topsy-turvy, roller-coaster story of the accounting trick. Can Merkel trick the German Parliament into accepting the accounting trick? Does Sarkozy want the same accounting trick as Merkel? What about European banks, does the accounting trick they need correspond to the accounting trick that the ECB needs? Can they construct the accounting trick so that it doesn’t trigger CDS payouts? Like all technocratic endeavors, it’s all so exciting and exhilirating to follow!
They do seem to be taking a long time coming to some sort of underhanded back-room agreement as to which accounting trick they’re going to sneak past the productive portion of the European public however, which is why I thought I’d chime in with my two cents as to the ideal accounting trick. And having thunk on it for the last 45 minutes and made several diagrams, I think I’ve got it, in an easy 2-step process:
- The EFSF (European Financial Stability Fund) guarantees all of Greece’s debts, and those of all other European countries, in arbitrary size, for unlimited time.
- European countries jointly guarantee all the obligations of the EFSF in arbitrary size, for unlimited time.
Problem solved, I think. Someone call Merkel.