Some officials and former officials are taking the view that a large fund of financial support for troubled euro-zone nations could be decisive in stabilizing the situation. The headline numbers discussed are 2 trillion to 4 trillion euros — a large amount of money, given that the gross domestic product of Germany is 2.5 trillion euros and that of the entire euro zone around 9 trillion euros.
This approach has some practical difficulties. The European Financial Stability Facility as currently devised has only around 240 billion euros available (and this will fall should more countries lose their AAA credit ratings). The International Monetary Fund, the only ready money at the global level, would be more than stretched to go “all in” at 300 billion euros.
The basic delusion is the existence of a great higher coordination. A coordinated response that delivers the large transaction at the appropriate time in the future. It is like a religion, I don;t quite get it. Maybe we have a primordial yearning for the horde. We carry in our culture ancient artifacts of the migratory society, led by the king. The old guide posts are strewn across the modern landscape, we can return to the mob.
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