Laughable Text of EU "Memorandum of Understanding"; ESM Not Been Ratified Yet Already Requires Changes; How Much ESM Firepower Is There?
Futures are flying over a "breakthrough" that supposedly will lower borrowing costs for Italy, Spain, and Ireland. The "breakthrough" is a modification to the terms of the ESM to allow "the possibility" to recapitalize banks directly.
Amusingly, the existing ESM agreement has not even been ratified. The agreement is still on hold in Germany (numerous other countries have yet to ratify as well).
Yet the "Memorandum of Understanding" worked out at the summit today appears to require changes to the ESM.
Other ambiguous statement from the eurogroup committee are simply laughable. Here is the complete text. Emphasis added in places.