has a good profile of Klaus Regling, the man appointed to head up the European Financial Stability Fund — the fund that was established this spring to bail out Eurozone should they get into trouble.
He’s kind of like the Neel Kashkari of Europe, though Regling, a former top Euro economic official is considerably less green.
He’s still waiting to hear whether the ratings agencies will give the EFSF the coveted AAA rating, a question that will be decided in the coming weeks, though he’s optimistic, since every country is on the hook for 120% (potentially) of what they officially owe the fund.
But here’s where it’s already failed:
If Regling has his way, the measures will not even be needed in the next three years. “It would be preferable if we didn’t even have to intervene,” he says. “In fact, I believe that’s the most likely scenario.”
He hopes that the very existence of his organisation will bring calm to investors and deter speculators. “If that’s the case, we’ll close up shop here on June 30, 2013.”
Given that bond spreads are already blowing out in countries like Greece and Ireland, this is already moot — the EFSF has failed to calm investors and deter speculators, even though it’s ostensibly known that these countries can tap the facility of need be.