EU insanity continues: Taxpayers in rich nations would cover the spending of poorer ones

The French President, Nicolas Sarkozy, has launched an audacious campaign to remake Europe's financial landscape out of the debris of the Greek debt crisis.

Speaking after the announcement of another multi-billion-euro bailout of the Greek economy, Mr Sarkozy said that, with the help of the German Chancellor, Angela Merkel, a new ''economic government'' would be created in Europe.

EU insanity continues: Taxpayers in rich nations would cover the spending of poorer ones Ipad-art-wide-15-lagarde-420x0

EU insanity continues: Taxpayers in rich nations would cover the spending of poorer ones Ipad-art-wide-15-lagarde-420x0

European leaders thrashed out an agreement on Thursday night to save the stricken euro, with a major step towards a full economic union in which taxpayers in rich nations would cover the spending of poorer ones.

Mr Sarkozy said the deal had pulled the euro zone back from the brink of disaster and laid foundations for the creation of an EU ''economic government''.

He hailed it as an ''historic moment'' that would provide ''bold and ambitious'' plans for the creation of an embryonic EU treasury in the form of a European Monetary Fund.

''Angela Merkel and I will be making joint proposals on economic government in the euro zone. Our ambition is to seize the Greek crisis to make a quantum leap in euro-zone government,'' he said. ''We have done something historic. There is no European Monetary Fund yet, but nearly.''

Greece, which has already received one bailout of €110 billion ($146 billion) and is struggling to pay its debts as investors demand ever-higher interest rates to lend to it.

Even large euro countries such as Italy and Spain have seen borrowing costs jump, raising fears of a crisis that could destroy the single currency. In response, euro-zone leaders drew up a deal that in effect uses money from stronger northern economies such as Germany to support the budgets of indebted nations in southern Europe.

The European Central Bank President, Jean-Claude Trichet, and the International Monetary Fund's managing director, Christine Lagarde, met Mr Sarkozy and Dr Merkel before the talks to help thrash out a deal.

After eight hours of talks in Brussels, the leaders announced €159 billion in new aid for Greece. With lower interest rates and a longer repayment period, Greece will be allowed to default on some debts for the first time. Private investors in Greek bonds will be asked to contribute to the bailout.

The agreement will hugely expand the role of a €440 billion emergency bailout fund, in effect creating a European Monetary Fund.

Dr Merkel was forced to cave in to French demands to extend the role of the stability fund.

http://www.smh.com.au/world/sarkozys-grand-plan-to-pull-europe-back-from-brink-20110722-1hsza.html

EU insanity continues: Taxpayers in rich nations would cover the spending of poorer ones

EU insanity continues: Taxpayers in rich nations would cover the spending of poorer ones

Anarcho-Capitalist Categorical Imperatives

AnCaps' Laissez-faire Free Trade Zone