FXstreet.com (Barcelona) - Commerzbank analysts see the conflict between debtor and creditor sovereigns in the Eurozone ending the euphoria on the FX markets for the time being, as the promises about the usage of EFSF/ESM financing are still to become real: “The debate about the conditions a country has to meet so as to be eligible for an EFSF/ESM credit line are still discussed contentiously (such a credit line is the ECB’s condition for the purchase of bonds)”, wrote analyst Lutz Karpowitz, sharing two illustrating quotes. One from the Spanish Deputy Prime Minister Soraya Saenz De Santamaria: “Europe has to recognise the sacrifices we are making”, that confuses “sacrifices” with saving measures that are rather a transfer of consumption into the future. On the other side is the president of the German association of tax payers, Reiner Holznagel, saying that each euro had to be earned first by citizens “before it was handed over to the treasury for fiduciary use”, illustrating that the sacrifice is really being made by the donor countries.

“Obviously the large amounts of money currently being redistributed in Europe at present make the payments and guarantees seem increasingly abstract. Moreover the Spaniards would rightly object that these are merely credit lines or loans which (should) be paid back”, added Karpowitz, stating that such conclusion is a mistake since the cost (excluding interest) is based on credit volume multiplied by probability of default. “The fact that this still results in enormous sums explains why the donor countries continue to demand more controls”, concluded the analyst.