(link to bigger image here)
Remember when I said that Greece wouldn't default, because Germany and France would bail them out in order to keep German and French banks solvent? The same is true of Ireland. The above table shows exposure of major banks in Europe's core to sovereign debt in Europe's periphery. The EU will continue to use the EFSF and IMF to bail out its members as long as that is necessary to preserve the stability of the banking system in the core EU countries. The EU is essentially going through it's own version of the 1980s Latin American debt crisis. The only difference is that in this case the periphery shares a common currency with the core. For now.
In short, it isn't Greece or Ireland that's being bailed out; it's German and French banks.
It gets interesting if/when Spain, which is probably too big to bail out, gets into trouble.
IPE @ UNC
IPE@UNC is a group blog maintained by faculty and graduate students in the Department of Political Science at the University of North Carolina at Chapel Hill. The opinions expressed on these pages are our own, and have nothing to do with UNC.
Bookshelf
Tags
Academia Adjustment Afghanistan Africa AIG America Argentina Austerity Bailout Banking Bargaining Basel Bernanke Bias Blogging Business cycle; recession; financial crisis Cap and Trade capital controls capital flows central banks; moral hazard Chavez China China Trade Climate Change Contentious Politics Cuba Currencies Currency Crises; financial crisis Current Account Data Debt Debt; China; United States; Decession Politics Decoupling Deflation democracy Democrats; Trade policy development Diplomacy Dollar; China; Currency Manipulation; Exchange Rates dollar; exchange rate policy ECB ECB; Fed; Monetary Policy Economic Growth Economics Egypt election EMU; monetary union Environment EU; Agriculture; Common Agricultural Policy Euro Europe; labor; immigration European Union Exchange Rates Farm Bill; Agriculture FDI Fed; Monetary Policy finance financial crisis financial crisis; subprime Fiscal Policy; monetary policy; elections Fiscal Stimulus Foreign Aid Foreign Policy France Free Trade Agreements G-20 G20 Summit Game Theory Germany global recession globalization Grand Theory Great Britain Greece health care reform Hegemony Human Rights Iceland imbalance IMF immigration Incentives income distribution income inequality; globalization India Inequality inflation institutions Interests international finance International Law International Monetary System International Relations Investment IPE Iran Iraq Ireland ISA Italy Japan labor markets Latin America Libya Macroeconomics Marxism Mexico Microfinance Miscellany monetary policy Monetary policy; Federal Reserve moral hazard Narcissism Networks Nobelist Smackdown North Korea Obama Oil PIGS Pirates Political Economy Political Methodology Political Science Political Survival Political Theory Power Protectionism Protests Public Choice Public opinion Rational Choice regulation Research Review Russia Sanctions Security Dilemma security threats Soccer Social Science Sovereign Debt Spain Sports Statistics stock markets Systems Tariffs TARP Taxes TBTF Technocracy technology terrorism Trade trade policy UNC Unemployment United States US-South Korea Venezuela WTO WTO; Doha
Blog Archive
-
▼
2010
(478)
-
▼
November
(32)
- The Ireland Bailout, Animated
- Who Says We've Got Economics Envy?
- Korea
- FOTD
- Using Network Theory to Understand Crises
- Break
- The Honest Version of the G-20 Communiqué
- Just Who Exactly Is Being Bailed Out in Europe?
- Realism =/= American Exceptionalism
- Quantitative Queasing
- What Causes Deficits, Ezra?
- Bapat on Terrorism
- Making Quant IR Credible
- Weekend Links
- Emmanuel's Gonna Love This
- Exchange Rates are not Monads
- The Effect of the Unholy Trilemma on the Internati...
- G-20 Trouble
- Short Answers To Easy Questions
- Visualize the World
- Obama, India and the UN Security Council
- If You Can't Beat 'Em, Ban 'Em
- The Decline
- Tyler Cowen on the Past and Future
- In Which I Don't Understand What Smart People Are ...
- FYI
- Rum Diaries
- Pwnage
- How China Views the Midterms
- It Wasn't Glass-Steagall Repeal
- Election Day Links
- Against the Kristof/Friedman Comparative "Method"
-
▼
November
(32)
Friday, November 19, 2010
Just Who Exactly Is Being Bailed Out in Europe?
Subscribe to:
Post Comments (Atom)
0 comments:
Post a Comment