The German Finance Minister, Wolfgang Schäuble, has suggested that any country that receives a bailout should give up some sovereignty. “A state with problems that receives help must be willing to give some of its sovereign rights to the EU.”
Of course even Phil Hogan realises that this is already a reality, as he made clear when announcing the inequitable family home charge imposed by the EU and IMF.
Schäuble also suggested that the German government would not support a carte blanche for bond purchases by means of the euro zone’s temporary bail-out fund, the EFSF. His comments will add to investors’ growing scepticism over the scale and the speed at which the EFSF can purchase government bonds, as it requires the unanimous consent of euro-zone members and the ECB.
Schäuble’s comments also appear to have caused Spanish and Italian borrowing costs to rise again during the last week.
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