Euro bond trading

So what about the European Union’s bail-out umbrella? The European financial stability facility (EFSF) is lending money to Ireland at an interest rate of about 6 per cent, which is higher than the country’s nominal growth rate is likely to be for many years. While the loan solves Ireland’s funding problems, it actually exacerbates the country’s underlying solvency problem.

Then this:

The EFSF will expire in 2013, at which point a new, tougher crisis regime will kick in. The EU has chosen this particular two-step construction for mainly political reasons, but from a funding perspective it is a nightmare. All existing bondholders will be protected until 2013.

Munchau says:

This year, Europe’s political leaders pledged to do “whatever it takes” to save the euro. They never answered the question of what that meant. My central prediction for 2011 and beyond is that we will find out.

I say:

Go back to the Canadian interpretation, what forecasting error was made that can be quantized in two years?  Over the past ten years, Euro zone probably erred by multiple trillions.
The Euro bond market will become dilated and drop rank until they are at ground state. Europe is maneuvering itself into a single, huge trade that is going to occur sometime around 2013. They are planning the impossible, a vertical yield curve.

Better suggestion, Euro citizens on all sides of this issue should revolt today, form the Default Party, a Euro wide party. Use the Internet to organize.