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is on Charlemagne’s notebook (The Economist). Here is a couple of extracts:

Meeting in Brussels, finance ministers from the 16 countries that use the single currency accepted the need to stump up more than €110 billion ($146 billion) over the next three years. In effect, the rescue funds (€80 billion from the eurozone buttressed by €30 billion from the International Monetary Fund) will replace commercial borrowing from the financial markets between now and 2012.

For the moment, scepticism is in order.

The pattern of the past three months has been a series of gambles by EU leaders. Their bet, each time, has been that a fierce enough political declaration will intimidate markets into backing away from a weak member of the club. This latest announcement looks different but it is not: it is just the biggest and fiercest declaration yet that markets should leave the eurozone alone. The idea is to shock and awe markets with a big number, so that Greece and its toxic public finances are ringfenced behind a wall of European political will. But this, too is a gamble.

Both Greece and Portugal are rather small, moreover. If the markets find good reasons to doubt the long-term sustainability of a much bigger economy, Spain, the cumulative bailout bill for other EU governments quickly reaches a very big number indeed (in Brussels, figures of a trillion euros or more are talked of in queasy tones). In the words of one Brussels official tonight: “the EU can’t afford Spain.”

A default, meaning at least the restructuring of Greek loans, still looks horribly likely.Just keeping the euro on the rails over the next few months and years is going to be a terrifying task.

You can also read this article on European Voice – it sums up the whole situation pretty well.

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