Greek banks have been obtaining ECB funding by issuing bonds guaranteed by the
Greek government. But what will this guarantee still be worth if Greece becomes
insolvent? "The central bankers are caught in a moral conflict. Cutting off the
flow of money would have disastrous consequences: Greece would quickly run out
of money. The population would soon not even have enough cash to pay for its
daily purchases." Another fine mess....This whole fiasco in Europe is partially
the fault of France who, after Germany was totally defeated after WW1 & WW2,
forgot to keep Germany in it's place. President Mitterand, although originally
opposing the reunification of east and west Germany, changed his mind and
supported it thinking that a single currency, controlled by France, and the rest
of Europe could keep a united Germany in check. How wrong he was. Only Britain,
under Margaret Thatcher, stood firm and continued to oppose German reunification
as she could see what a united Germany would become. Both my grandfather, a
First World soldier , and my father, a second WW soldier use to say that
the only way to control Germany was to ensure that "..once they were defeated
and down someone needs to keep a boot on their throat to keep them there,
because if you didn't they would get up and start all over again..". Were they
right?. I don't necessarily agree with those sentiments, but then I am the first
of two generations that hasn't had to go off to fight a war against Germany.
THE OTHER HOT SUBJECT :
Eurobonds will not save the Euro Zone. They will not solve any of the problems that led to the Euro crisis in the first place, which is the fact that an economic union of 17 vastly different economies in a single currency and a one size fits all interest rate makes no economic sense. The Euro has not brought about convergence of the economies of the EZ but the exact opposite. Eurobonds will not solve the lack of competitiveness of the Club Med countries: all they will do is help finance the deficit and the richer nations will have to continue to do this year after year after year, in fact for ever! Eurobonds may be a short term fix but they are no solution. Instead they are likely to harm the richer nations of the EZ by pushing up their yield rates and consequently the deficits they have!
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French Finance Minister Pierre Moscovici has warned that a Greek exit from the euro would spark an "unpredicatable" spread of the current crisis.
Greece's exit from the eurozone risks causing an "unpredictable" spread of the debt crisis, a scenario which France will work to avoid at all cost, French Finance Minister Pierre Moscovici.
"Everything must be done to help pro-European and pro-euro forces in Greece," ahead of repeat elections due next month, Moscovici told AFP, citing "measures to boost growth and give back hope to the Greek people".
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