When Lehman was allowed to fail the world economy tried to fall over within four weeks.
The Germans are now forcing Greece towards default with the active assistance of some in the EU.
I hope they have a better plan for its, much more serious, default. I have noted that if I was Greek I would opt for default but that's because I think it is in the long term interests of that country to maintain its right of self determination.
But for Europe? This is a real leap of faith. And I have no confidence in those committing the EU to leap, or in their faith.
This could end in tears very soon, and not just for the Greeks.
Or the Spanish.
Or Italians.
Or Irish.
Or Portuguese.
No this could lead to tears in Germany. They own the debt after all. As does London. And it was German banks, followed by the City, that most especially created this crisis and it's about to come home to roost because right now the balance is about to tip. Places like Greece and Spain are going to cease to have debt problems soon. That problem is going to become that of their creditors, and we have no idea what will happen then.
There may be tears when the Germans realise what they have done.
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Hope so.
Like you, and despite the obvious crisis that will ensue in the immediate term, for the best medium to long term outlook I think Greece needs to default and stick two fingers up to the Germans and the EU and the habitually useless IMF.
This whole process has been an absolute travesty and an injustice.
I had more faith in the Germans than this. But this shoddy, hysterical, tyrannical attempt to force Greece into penury is the last straw. I’m so disappointed in that country’s leadership.
but whats the solution – let the Greeks continue to borrow more and more whilst their citizens continune to evade tax.
The irony of the rioting of probably the very same people who have evaded tax for years which has led to the increased borrowing is presumably not lost on anyone.
Utter rubbish devoid of facts! Yes, there has been tax avoidance, but from the elite, not those poor sods whose only real outlet, being as their politicians are selling them down the river, is to riot!
Greece was royally screwed by Goldman Sachs, who secretly bought the debt from the right wing government in charge in the early 2000’s. Goldman then sold the debt back to Greece at an apparent loss, only to find that Goldman Sachs was charging punitive interest rates to the Greeks for that debt buyback and also were charging them billions in administration costs!
Greece is not in debt due to ordinary people, but because of corrupt politicians and greedy investment bankers!
I’m not sure that you could count taxi drivers as the elite though.
Adam Posen wrote a nice piece about this in Feb 19th 2010, ‘Germany’s Chinese New Year and What to Do about It’, to be found under his name at the Peterson Institute for International Economics. It explains how Keynes would have fixed the problem of transfers in the Eurozone.
Beware of Greeks bearing gifts.
Richard, on one hand you advocate the Greek’s right to ‘self determination’ by basically being a ‘cheat’s charter’, while on the other hand you don’t advocate for Jersey or Guernsey to ‘self determine’ their tax rates?
The lady doth protest too much, methinks.
Greece is a state
Jersey and Guernsey are not
Methinks you need to get your facts right
Okay I’ll let you split that hair. Switzerland is a country right? And you seem to be against them self determining their taxation policies. Self determination is a double edged sword it seems?
Respectfully, providing a shelter for criminally obtained funds does not represent a tax policy
It is just crime
And that’s what the Swiss deliberately facilitate and want to perpetuate
I guess you’re a supporter of crime in that case. Why?
That’s a nice pirouette. You’re an activist, tax accountant, and ballerina it seems!
No I DO NOT support criminality, and your argument is the same one that George Bush used “you’re either with us or you’re with the terrorists”.
It could be equally argued that Greece is a criminal state, run by criminals, who promote a culture of criminality – which will now affect everyone in Europe including you.
But you seem to support their right to ‘self determination’ ie. for them to decide how hard they get to screw the rest of us.
But when it comes to the Swiss (or enter any other offshore financial center), you refuse the OFC’s right to self determining their taxation laws. Quite the contrary, you propose to do what we’re trying to do in Greece – intervention, dictation of how to run their internal affairs etc.
Seems… untenable.
The Greek state has not been set up to assist criminality by those from other states. It may have turned a blind eye to that within: I can’t help that.
The Swiss state has gone out of its way to assist criminality by people from other states and provides the mechanism to do that.
No pirouette needed. I just quote facts and use straightforward logic
You don’t.
I agree with you about the risk to Germany. It’s a pity their leadership doesn’t seem to be able to see it. Nor for that matter can the rest of the world. Moody’s kept Germany at AAA despite the doubtful outlook for the Eurozone. I find this bizarre.
The Greek’s need to collect their taxes. A disproportionate amount of their money is in, “oh you guessed” London.
The Germans probably need to move on from their belief in tight monetary control, but since lose monetary control lead to anarchy followed by an attempt to wipe out a large number of people, you can see why they aren’t enthusiastic.