Tuesday, October 18, 2011

EFSF Would be 46% of France and Germany's GDP

There are reports flying around that France and Germany are close to agreeing to a 2T Euro, or $2.7T backstop to the EFSF.  While that sounds great in theory, in practice, it should be noted that the combined GDP of France and Germany is 5.84T.  In other words, the country's leaders are pledging 46% of their combined GDPs to bailing out Europe.  With such a huge pledge, it's hard to believe that if the guarantee had to be enforced that the money would be there.

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