Is the entire bank bailout illegal??!?

DeVore

Sorry for the conspiracy theory subject line but genuinely I couldn't think of any other way to put it...

This was put in front of me and I can't see how it doesn't apply...
From the relevant treaty: http://euwiki.org/TFEU#Article_123


That kinda suggests that private debt can't be turned into sovereign debt, no?

Am I wrong?

DeV.

DeVore

For the lazy

"Article 123
(ex Article 101 TEC)

1.Overdraft facilities or any other type of credit facility with the European Central Bank or with the central banks of the Member States (hereinafter referred to as "national central banks") in favour of Union institutions, bodies, offices or agencies, central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of Member States shall be prohibited, as shall the purchase directly from them by the European Central Bank or national central banks of debt instruments.

2.Paragraph*1 shall not apply to publicly owned credit institutions which, in the context of the supply of reserves by central banks, shall be given the same treatment by national central banks and the European Central Bank as private credit institutions."

DeV.

FreudianSlippers

My reading and understanding of this has always been that the answer to your question is laid out in the beautifully crafty caveat you posted at Section 2:

2.Paragraph*1 shall not apply to publicly owned credit institutions which, in the context of the supply of reserves by central banks, shall be given the same treatment by national central banks and the European Central Bank as private credit institutions."

DeVore

Its very obtuse.... I see what you are saying though. "Sly" doesnt really cover it.

DeV.