The nature of the EU bailout mechanism may create a reflexive situation that assures its...

|By:, SA News Editor

The nature of the EU bailout mechanism may create a reflexive situation that assures its failure. By protecting bondholders only through 2013, the EFSF allows the possibility of haircuts for longer term investors, causing them to demand higher interest rates, putting sovereigns in more difficult positions, causing investors to demand higher rates, ...