GREEK CRISIS NOW A EURO CRISIS !!!

Repeatedly making loans to an insolvent company or country is a very risky operation. This we have seen in the case of Greece which has been bailed out for the second time in one year. In the last two weeks the loans made to Greece have become "junk bonds" !!!

Was Greece again bailed out because it had solved or eradicated the fundamental reasons which forced it to apply for financial help in the first place, or was Greece bailed out again because the Leaders of the EU were terrorized, scared stiff, by the thought that the sacred EURO would lose face on the world's financial markets ? 

The very fact that new loans to Greece were again made, with low interest rates and on a long term basis, without any garantees like mortgages, reveals the fears of the EU leaders for the future of the EURO. However, the new loans did not cure the underlying structural faults in the Greek economy: too many civil servants being too highly paid !!! 

Before the final decision to grant the last loans to Greece, it was already generally known that Spain and Italy were also in dire straits.  These countries were watching what was going to be decided !!!  They were and are still watching because there are no rules in the EU treaties which specify what should be done when a EURO country becomes insolvent. This major loophole must be studied with great urgency, even during the current EU parliamentary recess !!!

I have long been of the opinion that EURO countries which are insolvent should temporarily leave the EU and abandon the EURO, readopt their former currency, then  officially convert all foreign currency debts and assets into the new local currency and then devalue the new local currency.  The net result would be, for example, that EU creditor countries would suffer losses on the balances outstanding with the insolvent country.

Banks and companies generally can book such losses against profits which would therefore soften the effect of the pretax loss.

If the EU solves the problems of Italy and Spain in the same way as the Greek problem, there will be melt-down in the EU !!!  Taxpayers will create revolutions everywhere when measures hurt !!!  In the end it is the taxpayer who always picks up the bill, not only for the unpaid debts of insolvent countries but also for the "junk bonds" !!! 

DSK; WHO PROFITS FROM THIS CASE ?

Without going into the merits of the pleas and counter pleas concerning the accusations DSK is facing in the court in New York, one thing is very clear.  The case is becoming a goldmine for his lawyers and other people like detectives and investigators !!!  Every time a hearing is delayed for a week or two, the fees and other costs rise.

Of course the reputation of DSK's lawyers will benefit in this extraordinary case due to the cost free prime-time publicity this case has brought them !!!  This could even justify a reduction of the fees which DSK pays to his lawyers !!!

The DSK case also provides huge profits for the Newspapers, Television and Radio broadcasters. The public, not only in the USA but in France and throughout the whole world, want to hear the latest news.  The public buy newspapers and watch Television and there is still enough time to slot in some publicity !!!  The DSK case makes them money !!! 

Finally, when all is said and done, when the case is all over, Journalists and Lawyers will write books and make money for themselves.  Producers will make a few films, that is almost certain.

In the very end, Professors of Law will use the DSK case as a perfect example of how to defend a client !!!  Every aspect of the case will be highlighted and thoroughly discussed for at least the next 100 years !!!  Will they also question whether a Chambermaid has any Human Rights in a case like this ? 

The names and characters of all the leading actors in this case will also be part of the story.       

EU JUNK BONDS TO SOLVE GREEK CRISIS ?

Creating "Junk Bonds" by reducing the interest rates and lengthening the repayment periods of loans to up to 30 years, does nothing to solve the Greek economy.  Neither does it do anything to protect the EURO itself !!!

The first thing politicians should ask themselves is how did the Greeks get into this mess in the first place. The very simple answer is that previous Greek governments overspent. The economic structure of Greece is wrong.

In fact 25% of employees work in the "civil" service !!! Civil servants are highly paid, overpaid in fact.  They also benefit from indexed pension schemes and early retirement !!!  Added to this there is unemployment in Greece. 

This situation guarantees two things.  Inspite of huge loans at low interest rates, Greece cannot become profitable and will need more loans next year !  There will be social unrest again in the near future.

Added to this the EURO will be downgraded on the financial markets, which is exactly what President Sarkozy and Chancellor Angela Merkel did not want, and why ?  Both are facing elections in their country and want to avoid unpopular reactions !!!

Finally, the basic reason for their actions can be put down to the absence of any rules concerning EURO countries which become "insolvent".  That is the problem which all the EU burocrats have never imagined !!!  That is also the first problem which must be solved.

Mr Barroso, the president of the European Commission, should have been alerted to this gross omission in the EU treaty when his country, Portugal, had to be rescued  last year !!!

MILIBAND HACKS AT CAMERON !!!

Ed Miliband, with limitless ferveur, attacks David Cameron everytime he gets the chance.  The object of almost everything he criticises ends with the question of whether David Cameron will resign or explain something !!!

Ed Miliband always attacks events which happened after the Socialists lost the last election last year after 13 years in power.  Ed Miliband is somewhat naïve if he thinks that one of these days he will not be put in his place !!!  Even Gordon Brown no longer dares to participate in debates in the House of Commons !!!   Tony Blair will never be tempted to come back into the fray !!! 

Every month or two another serious problem from the Socialist past comes into the public domain, and this will continue for the next two or three years without any doubt !!! 

When the next election comes around, the now unseen and unheard "leaders" of the Socialist party of the past, will certainly come to the fore and give dear "Ed" the shove !!!  He will be hacked by his own party !!!   

GREEK EURO CRISIS = MORE TAXES ?

I would like to express a personal feeling I have about politicians when they face a problem. What is their first reaction ?  There are two in fact !!!  I am not responsible, we will have to increase taxes !!!  The other reaction is:  Let's not talk about the past, the only way out of the problem is to increase taxes !!!

We now have the Greek Euro Crisis !!!  Have any of the European Politicians or the Leaders of the 17 EURO countries, or indeed the leaders of countries not implicated in the euro crisis, ever studied, or analized, why the Greek economy came to the point where it faced bankruptcy last year and again this year, 2011 ?

Is it not that the first "bail-out" did not cover the internal national overspending of the Greek Government ? 

If this is true, why should the EU now have to double its "loans" to keep Greece solvent ?  Lending money to a Bankrupt is like throwing money at drunk beggars !!!

Why should EU taxpayers fund political dreams ? Why do politicians in the EU not want to recognise the basic rule that giving "loans" to EU countries in great difficulty is the same as financing a company facing bankruptcy ? 

Why should taxpayers have to pay to save the skins of politicians who want to save their bacon !!!  

   

DEADLINE DATE FOR THE EURO

This coming week will be historic because the moment of truth will come when European Politicians decide the future of the EURO !!!

When the EURO was created the idea which prevailed was that it could consolidate E U countries which would then form the United States of Europe.

Everything happened so quickly that no rules were laid down on how the EURO would be controlled !!!  Not even the recent Lisbon Treaty covered this omission.  Idealists do not like too much detail anyway !!!

The fact that two small countries like Ireland and Portugal needed propping up did not ring any alarm bells. The loans required were small.  Now there is Greece, a country which was probably already insolvant when it adopted the EURO but which was "rescued" with loans of 110 Billion euros and which a year later needs another loan of the same amount. 

Suddenly politicians in Europe are trembling in their boots, not only about Greece, but because Italy and Spain are also in trouble !!! That means that 5 countries out of 17 which adopted the EURO are on the verge of bankruptcy !!!

The real problem is that no politician wants to admit that an insolvent country should be declared bankrupt and quit the EURO !!!  Unpaid debts should be suffered by creditors just as in a normal winding-up !!!  However this is the kind of decision that can be expected this coming week.

Other problems could also surface.  Angela Merkel, the German Chancellor would not be against readopting the old German Mark !!!  Other smaller countries too, have also regretted abandoning their old currencies !!!

If nothing else, we can only hope that the European Central Bank will make a serious effort to establish central financial controls, and create liquidation rules when a country gets into trouble !!!    

   

DOES THE EU WANT TO SAVE THE EURO AT ALL COSTS ?

The turmoil in the EU concerning its problem child, the EURO, not to speak about how the Greek bankruptcy has been handled up to now, clearly illustrates how unprepared our highly paid EU Politicians were when faced with the Irish and Portuguese "bankruptcies".

Some EU Politicians want to save the EURO at all costs, others want to do it by funding bankrupt countries at all costs if the EURO is their currency. 

In the meantime Greece is awaiting a decision, and SPAIN and ITALY are closely watching how the Greek problem will be settled. These two countries are both on the verge of bankruptcy and will study their options !!!

Both countries want the best deal for their countries, which is normal, but will the EU be sucked into further problems ? 

The Portuguese President of the European Commission, Manuel Barroso, staunchly supports bail-out help from the EU !!!  I have already asked him to make a speech to explain how he envisages that bankrupt countries will be able to recover and repay the bail-out loans to the EU within  a foreseeable future !!! 

The only thing I have heard since is that he thinks the members of the EU should pay an additional 1% of their turnover tax to cover costs in the EU !!!  He therefore wants to have the right to increase directly the tax which the EU can levy on its members !!! 

This has nothing to do with how bail-out aid will be recovered and which Barroso so favours.  Mr Barroso must now also explain why an increased levy is now necessary.  Does the EUROPEAN COMMISSION not control EU running costs ?  All EU member countries are obliged to control any increase in costs !!!  Why not the EU Commission ?

In the British Press questions are regularly asked whether the UK would not be better off out of the EU !!!

Manuel Barroso will face many questions in the coming months and must respond !!!  His actions weigh heavily  on the fortunes of member states !!!

When will he explain why he is so certain about his policies ?