Daddy, daddy, are the markets less disturbed about the disobedient Greeks right away that EU governments are going to give them €110bn? Well, son, the markets were never disturbed about the debts of the Greeks. They were gay by them. They saw a approach of creation income by betting on Athens delinquent or vacating from the euro. The some-more income that they bet, the some-more unpleasant Greeces on all sides became and the some-more expected it was that the markets would win their wager.
But, daddy, that is as if you could have a equine win a competition by everybody betting on it? Yes, son. And as I told you last time, the worse than that.
Why is it worse daddy? The Greeks ARE utterly naughty. They have been vital over their means. They have been perplexing to run a complicated state with an primitive taxation complement that equates to that most affluent people doctors, lawyers, ship-owners compensate probably no approach taxes. But all that has been loyal for a prolonged time, son. Greeces debts got unexpected worse because, similar to lots of alternative governments, they gave billions to the banks to rescue them from the consequences of their own greed.
Yes, daddy, and a little of those same banks are right away betting the same billions to have income from the actuality that a little of the governments are over their heads in debt. You told me all that last time. But you additionally told me that alternative EU governments would advise the markets that they would lose income if they one after an additional to gamble on Greek default? Why has it taken so long, daddy?
Because the EU is a pick up of governments that never utterly agrees and never utterly disagrees. The EU exists on muddles and fudges and compromises. The markets hatred fudges. Or rather, the markets love them since they can have income out of them.
Is that all Germanys fault? Well, partly. We talked last time about that good very old Greek Aesop and his story of the Grasshoppers and the Ants. The Germans see themselves as a republic of ants and the complicated Greeks as a republic of grasshoppers. The Germans longed for the Greeks to feel a little pain. They additionally probably longed for the euro to amalgamate opposite the dollar, that it right away has. The complaint is that the Greek predicament is as most about the euro as it is about Greece. The markets have speckled that Euroland countries cannot amalgamate or imitation money. If their euro partners do not assistance them in a crisis, they can be bullied indefinitely, or until they leave the euro. Having successfully bullied Greece, the markets are right away branch on Portugal and Spain.
Even the German supervision has realised that personification the ant-and- grasshopper diversion can infrequently be dangerous, even for the ant. The bailout concluded at the week end is far some-more dear than a fast bailout, or a organisation guarantee of a bailout, competence have been. Delay has unnecessarily flustered a decent and efficient Greek Prime Minister and Finance Minister. It risks pier so most suffering on typical Greeks prior to the doctors and shipowners etc can be forced to compensate their share that the Greek economy will collapse.
Further check competence have meant bailouts for Portugal and Spain, with outrageous consequences for the Germans and for all of us. Even right away there are doubts either the understanding can transparent the German parliament, as promised, by Friday.
Isnt there an additional Aesops myth that fits this story, daddy? There are loads, son, but here are dual for starters. There is the story of the lion that could not eat the 3 bulls so prolonged as they stranded together. The lion (ie the market) duped the bulls (Euroland countries) in to separating and ate them one by one.
And the second myth daddy? A child showering in a stream was in risk of being drowned. He called out to a person arriving for help, but instead of helping, the man scolded the child for his imprudence. "Oh, sir!" cried the youth, "pray assistance me right away and repremand me afterwards."
j.lichfield@independent.co.uk
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