Europe's Stupid Bond Insurance Plan

It appears that European leaders are still attempting to build a "firewall" around Italy and Spain by somehow transforming the European Financial Stability Facility (EFSF) into a bond insurer.

What seems to be under consideration is a scheme that would have the EFSF take the first 20 percent of any loss on euro zone sovereign debt .

According to French Finance Minister Francois Baroin, this would make the ESFS five times more effective.