Time for pitchforks, tar & feathers!

May 11, 2010 19:28

Remember, the U.S. just this year approved $100 billion for the International Monetary Fund, which is helping pay for the bailout. If Europe taps its IMF credit line, we’ll pony up $50 billion at least. But it doesn’t end there. The Fed has made available an unspecified amount of dollars to euro borrowers at low interest rates. We’re printing even more dollars to clean up Europe’s mess.

From IBD Editorials

Sovereign Debt Crisis: For many Americans, the EU’s trillion-dollar bailout of Greece and other troubled European welfare states is probably of little concern. But they should know that they are going to help pay for it.

Much of the media coverage has centered on the “European Union” bailout of its members. But the fact is, the U.S. is playing a much larger role in this than many realize — from strategizing to financing.

As a New York Times headline noted Monday, the EU agreed to its $1 trillion rescue only after a “nudge from Washington.” President Obama, we’re told, phoned German Chancellor Angela Merkel and other Euro leaders to tell them “the Europeans needed an overwhelming financial rescue to end speculation that the euro — and European unity — could crumble.”

In short, the rescue was in large part a U.S. idea.

It might strike you as strange that the EU would take advice from a country that now runs a deficit of 10% of GDP and whose total debt is verging on 90% of GDP — both of which would disqualify it from membership in the EU — but, hey, these are strange times.

At U.S. urging, the EU has decided to ignore its own constitution to create an economic superstate to rule the continent’s 450 million people and its 27 members with little, if any, democratic input.

The U.S., along with France, shoved this bad idea down the throats of Germany and the rest. Which explains French President Nicolas Sarkozy’s curious remark Monday that “we have decided to give the euro zone a veritable economic government.”

Veritable, indeed. Even the European Central Bank, long the bastion of euro stability, had its arm twisted to accept a new role — purchaser of last resort for failing nations’ public debt. It’s buying up bad loans, and handing out euros like toilet tissue.

And guess what? Not only is the U.S. behind this tragic mess, we’re going to pay for it too. As we said Tuesday, this EU plan smelled a lot like our own TARP. As it turns out, that’s the model.


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