Monday, 20 June 2011

The Greek Tragedy that is the demise of the Euro


Cartoon courtesy of the great Matt

It is becoming ever clearer that the Greek economy is a busted flush. Ever larger bailouts are not working; however, the options are all bad. The Europeans can apply another sticking plaster to a terminal wound or let Greece go bankrupt - both would see the loss of much more IMF and Eurpoean cash. The only other alternative is to see Greece leave the Euro and return to the Drachma. This would be politically and econmoically disastrous but the least worst option.

Three things are clear:
- Greece is insolvent and technically bankrupt - their financial demise is a matter of when not if
- All of us will be affected if we lose a trading partner and have our finances affected again by the bankruptcy of such a country - it is no different to a business losing a long term customer who owes us money
- The Euro currency in its present form is toast

One final thought - well done to John Major, William Hague and others who fought hard to ensure that we never joined the Euro.

1 comment:

  1. As far as I can see the only logic in extending further credit now is in deferring the time of reckoning to a moment where those exposed may be in a better place to weather the result. Someone somewhere presumably has to make the call about whether further inputs now are worth this benefit. The pound has proved worthy. Will we find the Irish Republic seeking to prefer Sterling to Euro one day? Over all this though we read that China could buy out Europe and its difficulties a few times over.

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