Angela Merkel lobbies for bondholders to share pain of EU bailouts

[Joanne98]

German chancellor's plan is attacked by critics for unnerving investors and undermining eurozone's stability


Angela Merkel is expected to intensify her lobbying this week for reforms tying EU debt holders to sovereign bailouts, despite concerns that she is unnerving investors and undermining the stability of the eurozone.

The German chancellor said last week that she wants bondholders to take a hit on the value of their holdings when a country is in trouble, potentially saving taxpayers billions of pounds.

With calls for a bailout of Portugal intensifying, and worries about Spain, Italy and Belgium growing, Merkel is keen to show her domestic audience that once the febrile mood is calmed, there will be an orderly mechanism for dealing with a repeat situation.

According to some reports, a blueprint for tackling eurozone debt crises could be ready in the next few days, with interim regulations in place as early as next year before full implementation in 2013.

http://www.guardian.co.uk/business/2010/nov/28/angela-merkel-eurozone-bailouts-bondholders

Boy is she BRAVE!

[elleng]

1. Good news. Always liked her. Yes, brave, smart and practical.

Politically? Dunno. But read Krugman on Ireland and Iceland, and think there's A LOT to learn here.

http://234next.com/csp/cms/sites/Next/Opinion/Columns/5647106-148/story.csp

The world cannot afford to coddle investors, esp because they or their predecessors caused a lot of this crap by allowing it to go on, if not expicitly sanctioning it.

Good for Angela.