In politics and economics, experience tells us that when something looks too good to be true, it usually is. And the so-called deal to 'save' the euro last night appears to be no exception.
One trillion euros – the sum pledged to help bail out Greece and convince the markets the eurozone is serious about making things work – sounds an awful lot of money. However, it is precisely half what experts said would be necessary to do the job. And, as I write, there is still no confirmation that the European Central Bank will use its own money for this rescue.
So it seems to depend largely on governments – Germany mainly – promising the money to create confidence in the system. It also depends on private investors. But why should private investors feel confident about pouring more of their money into a bottomless pit?
