Posted by: Tobias | February 18, 2009

So much for that no-bailout clause

Feb. 18 (Bloomberg) — Germany and France may be forced to contemplate the bailout of entire nations rather than just individual banks as European government budgets buckle under the weight of recession.

German Finance Minister Peer Steinbrueck became the first senior policy maker to broach the topic earlier this week, saying some of the 16 euro nations are “getting into difficulties” and may need help. He went further today, saying Germany “would act” if fellow euro members got into financial trouble. French officials are also concerned about market tensions as the cost of insuring Irish, Greek and Spanish debt against default rises to records and bond spreads widen.

Source: Bloomberg News

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