Newton questions workability of EU bailout plans

Newton's head of fixed income Paul Brain is concerned about the European Union's system for bailing out struggling countries.

As part of its emergency bailout plans in May, the EU established the European Financial Stability Facility EFSF, a special purpose vehicle that will issue bonds to raise cash for indebted eurozone countries. These bonds will be guaranteed by eurozone member countries, excluding Greece. If a country seeks financial support from the EFSF it is immediately removed from backing these guarantees. Paul Brain, Newton's team leader, fixed income, says the existence of EFSF is a good thing, but its structure is too fragile. He says: "The problem is, as soon as countries go to the EFSF f...