Rebirth of England.

Chapter 731 Kick Explosion
The most crucial point is that under the existing legal framework, the ECB has no obligation and cannot rescue Greece. ECB President Trichet also stated that they have no plans to rescue Greece through workarounds.

In the Maastricht Treaty related to the euro zone, there is a clause called the "no bailout clause" - this clause clearly stipulates that the European Central Bank and the central banks of the member states are prohibited from providing overdrafts or overdraft-like loans to public sector institutions of member states or the community; the European Central Bank and the central banks of the member states are prohibited from purchasing bonds directly from these institutions; the European Central Bank is prohibited from accepting or seeking bailout instructions from other institutions, etc.

Although many countries, even core eurozone countries such as Germany and France, have occasionally exceeded the deficit level of 3% of GDP stipulated in the Stability and Growth Pact, they have all relied on their own strength to reduce the deficit to the prescribed level.

Therefore, for Trichet, the current crisis in Greece is not new. What they have decided now is not to participate in the rescue, but to implement the convention.

In fact, since the sovereign debt crisis broke out in Greece at the end of last year, Greece, the European Central Bank and other countries in the eurozone have been bargaining over whether to provide assistance to Greece.

The reason why European Central Bank President Trichet still insists on not providing aid is that, in addition to the no-aid clause in the relevant treaties, his main concern is the moral hazard that will be brought about if Greece is rescued.

Even if there is a "no bailout clause" in the Maastricht Treaty as Trichet said, after all, before that, Europe or the world had not experienced an economic crisis as destructive as the subprime mortgage crisis, and apart from Greece, which actively hoped that the European Central Bank would provide corresponding assistance, other countries, especially the PIIGS countries such as Ireland and Spain, were also inclined to provide assistance to Greece...

After all, people know their own business. These "PIIGS" are also aware of their own economic situation. If the European Central Bank can bail out Greece, then if they themselves have a sovereign debt crisis, they can also ask the European Central Bank for bailouts...

Among them, Spain is the current rotating presidency of the European Union, and their attitude towards rescuing Greece is relatively positive.

But the moral hazard that the European Central Bank is worried about is that they do not want to rescue Greece too easily - after all, it is obvious that the main responsibility for the current mess Greece has caused lies with the Greek government.

Even the fact that they were able to join the eurozone was achieved by "cheating".

Then they will naturally worry that if they rescue Greece too easily, it will be tantamount to transferring part of the losses caused by Greece's own "self-destruction" to the countries in the entire eurozone.

This will even have a negative impact on other countries' compliance with the Stability and Growth Pact - if Greece can be rescued, other countries that are seeking death can be rescued in the future. Then, especially those small countries in the eurozone whose economic situation is already poor, who will be willing to work hard to develop their economy? They might as well just lie down and eat the big guys.

Therefore, at the current stage, the attitude of the European Central Bank and some countries is still to require the Greek government to respond to the crisis by reducing its own spending and try to optimize their dangerous debt structure by its own strength.

According to information Barron obtained privately, European Central Bank President Trichet told French Finance Minister Christine Lagarde that they would not consider rescuing Greece until Greece implemented fiscal austerity policies as they requested, strictly controlled government spending, and was completely unable to obtain funds through the market.

Moreover, the European Central Bank is different from the Federal Reserve. Even as the president of the European Central Bank, Trichet cannot make decisions on many issues on his own.

After all, unlike the Federal Reserve which is backed by the United States, the European Central Bank does not have a unified political environment or a coordinated government agency behind it.

Although both are independent financial stability institutions, the ECB and the Fed are very different in terms of decision-making. The ECB's decision-makers are representatives from the central banks of the member states and officials from the finance ministries of the member states. These representatives and officials directly report to their own governments and are subject to their own political and social pressures.

This has caused the ECB to hesitate and bewilder in its decision-making. Faced with the complex political and economic interests of its member states, the ECB is like a giant beast with its hands and feet tied up. It can only shake its hair but cannot wave its claws.

Baron, who has been waiting for an opportunity, and the Wall Street capitals that work with him will naturally not miss the opportunity when the European Central Bank is hesitant.

The media they control have been making every effort to report on the situation, exaggerating the severity of the debt crisis in Europe, especially Greece. In addition to Greece, many other countries, including Portugal, Spain, Italy, Ireland, etc., have carried out different degrees of "financial operations" on the issue of government debt levels in order to join the euro zone.

These countries with the least developed economies in the EU also suffered the greatest damage in the 2008 financial crisis.

Therefore, after the Greek sovereign debt crisis broke out, they tried their best to make the public understand that it is not just Greece that is facing problems. The entire eurozone may experience an economic crisis that is more serious than the subprime mortgage crisis after Greece first detonated the sovereign debt crisis.

Correspondingly, affected by these factors, the euro exchange rate continued to plummet, and the stock indexes of the entire European market were falling...

At the end of January, The Wall Street Journal took the lead in publishing a related report, pointing out that after NM Rothschild Bank suffered heavy losses due to a trader's illegal operation, its parent company LCR Rothschild Group is likely to face huge compensation. According to relevant sources, several institutions including Goldman Sachs, JPMorgan Chase, and Citibank have purchased corresponding credit default swap bonds (CDS) from the same German institution since 1 for the loans they issued to many European countries including Greece and Ireland. At present, this German institution has been acquired by LCR Rothschild Group and has become its wholly-owned subsidiary.

This means that if these countries are unable to repay these loans within the specified period, then according to the original CDS bond rules, the LCR Rothschild Group will, as the underwriter, repay these loans!

According to the Wall Street Journal, the funds involved will exceed 100 billion euros!
This can't help but remind people of the incident that caused American International to go bankrupt during the subprime mortgage crisis, which was also caused by their investment department underwriting CDS bonds.

After the Wall Street Journal's report, many media outlets, including those in the United States, Britain, and even continental Europe, reported this shocking news.

It is obvious that the sovereign debt crisis in Greece is getting worse as the European Central Bank remains silent and refuses to reveal its assistance to Greece.

If it is true as reported, then a Greek debt default is not impossible, and it even seems that the probability is getting higher and higher...

Then the LCR Rothschild Group will probably be facing a desperate situation - after all, it has only been more than a year since the fall of the American International Group.

(End of this chapter)