ESM Treaty - Text - Ratification Processes and Legal Cases

[DCon]

This might actually help them. They were restricted from issuing new debt

EFSF’s initial plan to issue a 3-year benchmark bond last week was postponed due to last week’s rating action by Moody’s which reduced France’s long-term debt rating from Aaa to Aa1. EFSF’s Deeds of Guarantee require that EFSF’s new issues, at the date of the issue, are covered 100% by guarantees of Member States with a rating, by each of the credit rating agencies, similar or better than the EFSF’s own rating. As a consequence of Moody’s rating decision on France, EFSF’s new long-term issuances (currently rated Aaa by Moody’s) would no longer satisfy this criteria.

http://www.efsf.europa.eu/mediacentr...d.htm?lang=-en

[C. Flower]

This might actually help them. They were restricted from issuing new debt

http://www.efsf.europa.eu/mediacentr...d.htm?lang=-en

What did I say when the EFSF was first set up ?

http://www.politicalworld.org/showthread.php?t=4606


Roubini, amongst others.

the leveraged EFSF is a turkey that will not fly, because the original EFSF was already a giant collateralised debt obligation, where a bunch of dodgy, sub-triple-A sovereigns try to achieve, by miracle, a triple-A rating via bilateral guarantees. So a leveraged EFSF is a giant CDO squared that will not work and will not reduce spreads to sustainable levels. The other “turkey” concocted by the EFSF was supposed to be a special purpose vehicle where reserves of central banks become the equity tranche that allows sovereign wealth funds and the Bric countries to inject resources in a triple-A super senior tranche. Does this sound like a giant sub-prime CDO scam? Yes, it does. This is why it was vetoed by the Bundesbank.

So, since the levered EFSF and the EFSF SPV will not fly – and there is not enough International Monetary Fund money to rescue Italy and/or Spain – the spreads for Italian debt have reached a point of no return.

[DCon]

The ESM has created EUR 39.5 Billion to recapitalise Spain's banks.

This is effectively Spain's version of our Anglo Prom Notes, but handled via the ESM

ESM Press release: ESM issues bonds for recapitalization


For Spanish banking sector recapitalization
Will consists of 2 bills, 3 floating rate notes, total amount Eur 39.5 bln
Notes will be transferred to Fund for orderly bank restructuring (FROB) and were not funded via the market

http://www.forexlive.com/blog/2012/1...apitalization/

[ang]

And so it begins...........The monster awakens

[C. Flower]

And so it begins...........The monster awakens

https://www.youtube.com/watch?featur...&v=-_1MvSWL1e4

[Dr. FIVE]

ESM's Regling says the euro rescue fund would need new leverage instruments for direct bank aid. The existing ones can't be put to that use.

.

[ang]

German court to hear case against ESM, ECB bond-buying in June -

BERLIN (Reuters) - Germany's Constitutional Court will hold a public hearing on June 11 and 12 on complaints against the euro zone's bailout fund, the European Stability Mechanism (ESM) and the European Central Bank's bond-buying program.

The complaints, seven in total, reflect German unease about the mounting costs of dealing with the three-year debt crisis and fears that the ECB bond-buying program may violate the taboo against direct central bank financing of state budgets.

http://www.chicagotribune.com/busine...0,165535.story