€-exposure...

Much more dangerous is the €-exposure that France, answering the exposure question in France that the ECB demanded, reduced it, and kept investor confidence, by transferring exposure to French banks outside France whilst strictly speaking answering the ECB honestly.
SocGen - St. Pierre et Miquelon and Débit Agricole Genève are 2 examples... In any case the big European lenders felt unease with the initial Bernake’s comments about restrictive monetary policy. The European financial system is currently oiled well with plenty of American dollars. If they are to be withdrawn there has to be a replacement. So Eurozone’s lenders asked and the ECB quickly responded with a completely new policy principle, the main characteristic of which will be plenty and zero cost euros for the ‘guys’.----- This decision was taken unanimously in ECB’s Governing Council last week with Germany not hesitating this time to support such a generous policy.----- The key to this Teutonic alignment with the rest of Eurozone member states is that the German banks are the first to need this ECB money bonanza. Many lenders in this country are dangerously undercapitalized and need badly this zero cost liquidity from the ECB.  All in all, either way western banks are now reassured that nothing will be done without their consent. The American Fed will continue to replenish their coffers with $85bn a month, and if the time comes for a change in the American generosity to banks, ---- the ECB is ready to take over.--"

DOWN SOUTH AS THEY SAY ...

There is a cultural problem in Portugal that makes this crisis worse. It has nothing to do with "laziness", "sunbathing culture" or other silly stereotypes often posted in these forum. The problem is a deep immersion in what I would call a "leftist cultural mindset" in a broad sense. Most people are not exactly communist, but they don't think good on entrepreneurs, they do not trust capitalists. In a conflict between a landlord and the home occupier they take position against the former, as if to be a landlord was a sinister capitalist exploitation. This makes any reforms towards a more market-driven economy much more difficult, specially so because even Constitutional Court justices fall into this leftist mindset.  Most people misunderstand this austerity measures. They blame the government, they blame the troika, they blame sometimes the Germans, and so on, as if this austerity was not necessary, as if it was a mischievous act. It's a silly thing, but unfortunately most Portuguese, not only low class, but even the middle class, feel a deep sense of entitlement and for them a wage cut or worse a job dismissal, is morally akin to a evil act. This explains the political manifestations against the troika and against austerity. Because of ignorance, people feels this austerity is an evil act designed to increase capitalist exploitation, and to line the pockets of the rich (how silly!). Then, their protest is self-righteous. Mind you, they are NOT exactly just defending selfishly their interests. They are more idealistic than that. They feel they occupy a moral highground and that the architects of austerity are wrong or even evil. Unfortunately, some writings by Ambrose suggest that he blames austerity almost as intensely, thus joining forces with the ignorant Greek and Portuguese masses, which criticize austerity without understanding the gravity of this situation.