10 June 2011

Low finance

I assume that you have not been following too closely the travails of the Greek economy as it edges ever closer to sovereign debt default. It has become increasing impossible to imagine that Greece will ever be able to repay its borrowings. So what is the collective attitude of the EU to this sorry state of affairs? Basically and pointlessly, they intend to lend more money to the Greeks while burying their heads in the sand. The Germans recently suggested that EU governments should not be the only ones to put their hands in their pockets, a suggestion summarily stamped upon by the European Central Bank. The Independent reports:
Jean-Claude Trichet, the president of the European Central Bank, was making it plain yesterday he won't back a restructuring of Greek debt to the detriment of private investors, despite suggestions from the German finance minister on Wednesday that this is what is now necessary.
Now who do you suppose are those private investors? Yes, it's our old friends the banks, mainly French and German, but the Brits are in there too. Nice to have friends in high places, isn't it?


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