I am amazed how optimistic markets have been as to the success of the EU rescue package. And sure enough the first reports are coming in that "Euphoria ends as investors suspect another shameless EU confidence trick."

This time around the creative accounting is that Less than 10% of the funds actually existed and the rest were plans to establish facilities to raise the rest of the money. Those are a lot of hoops and ifs… Here is the rescue rackage (in euros) in a snapshot (via Econbrowser): 

Graphic from Thomas and Ewing, NYT, May 11, 2010; link here. 

Note: Jean Claude Trichet clarified yesterday how the bond purchasing programme is likely to work. To sterilise the bond purchase, the ECB is considering term deposit, compulsory deposits banks would have to hold at the ECB, which has the effect of withdrawing liquidity from the system.