I predict that Germany / France will redirect their resources...

I predict that Germany / France will redirect their resources towards saving themselves rather throw money into a bottomless pit (EFSF) which they have little control over.

Interesting point - before the EU, Italy was in a much financial health (lower debt/GDP etc) yet their yields were well over 10% to reflect the actual sovergein risk. Within the EU smoke-and-mirrors, they were paying 4%.

Fair value is well over 12% IMO - ECB cannot stop the market forces forever.

Lets stand aside and let the market do what it is designed to do - price risk!