Bail out banks, not states

The willingness that the EU has so far signalled  to support big banks if necessary is a step in the right direction, the conservative daily Lidové noviny comments: "Certainly, this means yet another wave of socialism, nevertheless it is the only possible intervention that can calm the jittery financial markets and ease the economic crisis. The International Monetary Fund has tellingly pointed out that it is necessary to tackle the true problems, that is to restructure not the states but the banks that carelessly got into debt and are now facing huge losses. The second sign of realism is the insight that Greece's bankruptcy is unavoidable. Paris, too, has got used to the idea of major losses for private investors. The parallel between the two decisions is no coincidence. An orderly state bankruptcy with no clear rules on what will happen to the endangered banks is a no go."

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