Alleviating the euro crisis: damned-if-they-do, damned-if-they-don't

The Basic Arithmetic Behind Investors' Biggest Fear In Europe

Matthew Boesler

One of the biggest problems European leaders face right now in alleviating the euro crisis is being overlooked amid all of the excitement about the ECB's expected September 6 announcement to support troubled eurozone nations by buying their government bonds.

The ECB has to give up seniority on their bond purchases in order to coax private investors back into the market again, but if it does, it will alienate German taxpayers who are ultimately footing the bailout bill in the first place, and that may mean there will be no more money for future financial rescues going forward.

This leaves the ECB and the eurozone's EFSF/ESM bailout funds in a damned-if-they-do, damned-if-they-don't sort of situation.

It's good to get a handle on the basic arithmetic underlying the issue, because it really crystallizes the debate.

............

Read more: www.businessinsider.com