The European leaders are desperately clutching at straws to provide a "fast fix" to solve the current Greek crisis !!! To summarise all the problems is simple, but to solve the problems, alas, is now much too late.
The evolution of the way this problem has developed could be summarised as follows;
1) The EURO was created with the idea that the UNITED STATES OF EUROPE could in future play a similar role as the USA and its DOLLAR.
2) 17 EU countries adopted the EURO and abandoned their old currencies.
3) The rules of the Central European Bank never envisaged that a member country could go bankrupt, and what had to be done if this occurred !!!
4) Nobody in the EU apparantly requested, received or actioned reports from member countries on their financial condition. The sudden financial difficulties of IRELAND, PORTUGAL and GREECE were a complete surprise for everyone !!! Nothing happened or was controlled during at least 10 years !!!
These are the fundamental problems which escaped the attention of all the highest paid EU managers. Nothing can be done now to correct the dire financial condition of Greece, and, to be quite clear, other countries who are hovering on the brink of Bankruptcy.
The Presidents or Prime Ministers of each EU country have been called to urgent meetings to find a solution for the EURO. To save the EURO and Greece a special Credit Line of 110 Billion EUROS was organised for Greece last year. Now this has proved to be insufficient !!! Greece needs as much again !!! Desperation is setting in and everyone wants to find a temporary solution fast.
If Greece was just a little company, liquidators would be called in and creditors would bear the cost of any debts which the company could no longer honour. The country of Greece is in exactly this position !!! And various countries in the EU are the creditors, but there are certainly other creditors from outside the EU. In addition there are Greek nationals who also have claims on the Greek state; what about pensions, etc ?
In retrospect, the Greek governments have wildly overspent during the last 10 years. The people are now hurting from the sudden reduction of their living standards. Now the Greek government is agreeing to the introduction of austerity measures which are long overdue, but only because the EU has proposed strict conditions.
The latest proposals are that credit conditions should be extended to up to 30 years !!! This would be the next tragic mistake !!! The Greeks could never repay, and the credit rating of the EURO would also suffer. New social unrest and strikes, not to say a revolution will soon be seen in Greece. In the end one can see the short term result, within 12 months.
Greece will withdraw from the EURO and return to the Drachma, convert all foreign debts into drachmas and then devalue the Drachma !!! Can anyone foresee a better solution for the EU and the EURO and for Greece ?
The evolution of the way this problem has developed could be summarised as follows;
1) The EURO was created with the idea that the UNITED STATES OF EUROPE could in future play a similar role as the USA and its DOLLAR.
2) 17 EU countries adopted the EURO and abandoned their old currencies.
3) The rules of the Central European Bank never envisaged that a member country could go bankrupt, and what had to be done if this occurred !!!
4) Nobody in the EU apparantly requested, received or actioned reports from member countries on their financial condition. The sudden financial difficulties of IRELAND, PORTUGAL and GREECE were a complete surprise for everyone !!! Nothing happened or was controlled during at least 10 years !!!
These are the fundamental problems which escaped the attention of all the highest paid EU managers. Nothing can be done now to correct the dire financial condition of Greece, and, to be quite clear, other countries who are hovering on the brink of Bankruptcy.
The Presidents or Prime Ministers of each EU country have been called to urgent meetings to find a solution for the EURO. To save the EURO and Greece a special Credit Line of 110 Billion EUROS was organised for Greece last year. Now this has proved to be insufficient !!! Greece needs as much again !!! Desperation is setting in and everyone wants to find a temporary solution fast.
If Greece was just a little company, liquidators would be called in and creditors would bear the cost of any debts which the company could no longer honour. The country of Greece is in exactly this position !!! And various countries in the EU are the creditors, but there are certainly other creditors from outside the EU. In addition there are Greek nationals who also have claims on the Greek state; what about pensions, etc ?
In retrospect, the Greek governments have wildly overspent during the last 10 years. The people are now hurting from the sudden reduction of their living standards. Now the Greek government is agreeing to the introduction of austerity measures which are long overdue, but only because the EU has proposed strict conditions.
The latest proposals are that credit conditions should be extended to up to 30 years !!! This would be the next tragic mistake !!! The Greeks could never repay, and the credit rating of the EURO would also suffer. New social unrest and strikes, not to say a revolution will soon be seen in Greece. In the end one can see the short term result, within 12 months.
Greece will withdraw from the EURO and return to the Drachma, convert all foreign debts into drachmas and then devalue the Drachma !!! Can anyone foresee a better solution for the EU and the EURO and for Greece ?
No comments:
Post a Comment