An amusing piece about Greece's financial travails in the Daily Telegraph that does point out the ridiculousness of the eurozone, which consists of countries that ought not to be tied together in one currency (but then it was a question of politics defeating economics) and a rather silly discussion afterwards, full of irrelevant comments.
The best part is the title: Greece is the word that should strike fear into all those who love the euro. Indeed. Shortly to be followed by the words Spain, Portugal and Ireland, not to mention Italy.
I see the ECB as no more obligated to bail Greece than the US Treasury to bail out California; in each case an unsound thing to do. Of course gov'ts do unsound things all the time- see Mancur Olson.
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and PIGS (Portugal, Italy, Greece, Spain) will fly if a country leaves the Eurozone.
ReplyDeleteNOT going to happen.
Nick
(too much political capital invested in this thing called the Euro for it to be allowed to fail)
That is, of course, true, Nick. It is a political project and cannot be allowed to fail. But there is the question of what will happen when economics undermines politics as it so often does in history.
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