30 October, 2008

EU: now a bank?


With all this money slooshing round the world, and an IMF bailout of Hungary, it would be easy to miss the news that the EU has lent the country €6.5bn. This has been done under a little known clause in the governing treaty.

I am disturbed about this. Note that it was not the European Central Bank which made the loan. It, under its charter, is not allowed to do so. So the bank declined but the bureaucrats decided to go in: which department? What sort of analysis was done and by whom? They say they will issue bonds to cover this but who is on the hook for it (guess)? Did the various governments in the council of ministers approve it? What conditions, political and economic, apply?

We should find out what we can. This may be a disturbing new development (you can bet your boots that quite a few of the others will be after the moolah when they get to hear about it). It means the EC has got its fingers round another throat, at our expense.

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