I dont really understand the preoccupation the Greek crisis is causing. Greece cannot pay its debt, cannot maintain social services nor pay public employees, it is broke. So what? Let it sink till they reform. There will be demonstrations on the street. So what? Why is this bad for the Euro?
Now I understand: European banks hold $235 billion Greek debt. Greek default will lead to another worldwide financial crisis.
7 comments:
Yes, you answered your own question - the same reason why US gov. could not let the big banks or AIG fail. The cost of the worldwide economic crisis that would follow would be even greater than the cost of the bailout, at least arguably. So even if the bailed out parties are morally undeserving, it is in the interest of the others to do it for their own sake.
But I don't see why Germany has to just write the Greeks a blank check. It is certainly within its rights to say that here are the conditions for the aid. This will also get Greek politicians off the hook. They can say to the voters/demonstrators that the decision to cut your benefits, etc. was not in our hands.
K
Eventually Germany will have to cut benefits too.
And personally, let the damn banks fail. These banks have at least a half a trillion riding on whether or not the government will bail them out, they can afford to spend a few billion behind the scenes to create enough panic in order to get the money from the government.
The banks should not have been bailed out, and neither should Greece.
As I said, money is just people running round waving their hands in the air.
Anon.
That is too deep for me.
J, I know this is really obvious, but I would like to point out that both Latin America and its parent are now economic basket cases.
Like father, like son.
Brazil is not.
Brazil is not.
Different father than the rest of LA. I should have been clear and specified Spain.
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