Feb 11/09. A bail-out of the
toxic assets (estimated at $24 trillion) held by European banks'
could plunge the European Union into crisis, according to a confidential
“Estimates of total expected
asset write-downs suggest that the budgetary costs – actual and
contingent - of asset relief could be very large both in absolute terms
and relative to GDP in member states,” the EC document, seen by The
Daily Telegraph, cautioned.
"It is essential that government
support through asset relief should not be on a scale that raises
concern about over-indebtedness or financing problems.”
National leaders and EU
officials share fears that a second bank bail-out in Europe will raise
government borrowing at a time when investors - particularly those who
lend money to European governments - have growing doubts over the
ability of countries such as Spain, Greece, Portugal, Ireland, Italy and
Britain to pay it back.