Zimbabwe on the Aegean
“Greece’s newly elected Socialist government insisted Wednesday that the country was neither this year’s Iceland, nor the new Dubai, as worries increased over public finances, causing its debt rating to be downgraded to the lowest level in the euro zone.”
I agree 100% that Greece is neither like Iceland nor like Dubai, but that would be no reason for the Greek public to rejoice since their country is exactly like Zimbabwe!
I followed the Zimbabwean hyperinflation last year, not in the hostile Western press but from the RBZ own documents:
- Zimbabwe’s Monetary Policy
- High Treason in Zimbabwe
- Mischief on the Zambeze
- Re-Introduction of the Gold Standard
The only reason prices are not doubling every week in Athens is the European Monetary Union, the question now: How long will Europe carry the sick man of the Aegean?
“Athens squandered its euro windfall. For a decade, EMU let Greece borrow at almost the same cost as Germany. It was a heaven-sent chance to whittle down debt. Instead, the country dug itself deeper into a hole by running budget deficits near 5pc of GDP at the top of the boom.
Like Labour under Brown, idiot leaders mistook a bubble for their own skill. But the consequences in EMU are more dreadful. Austerity may prove self-defeating, without the cure of devaluation. Greece risks grinding deeper into slump.
The EU can paper over this by transfering large sums of money to Greece. But will Berlin, Paris – and London, also on the hook – feel obliged to bail out a country that has so flagrantly violated the rules of the club, not least by holding Eastern Europe’s EU entry to ransom over Cyprus? That is neither forgotten, nor forgiven.
During the panic last February, German finance minister Peer Steinbruck promised to rescue any eurozone state in dire trouble. He is no longer in office. The pledge was, in any case, a bounced political cheque even when he wrote it. Greece can assume nothing.”
—Greece tests the limit of sovereign debt as it grinds towards slump
Athens squandered its euro windfall. For a decade, EMU let Greece borrow at almost the same cost as Germany. It was a heaven-sent chance to whittle down debt. Instead, the country dug itself deeper into a hole by running budget deficits near 5pc of GDP at the top of the boom.
Like Labour under Brown, idiot leaders mistook a bubble for their own skill. But the consequences in EMU are more dreadful. Austerity may prove self-defeating, without the cure of devaluation. Greece risks grinding deeper into slump.
The EU can paper over this by transfering large sums of money to Greece. But will Berlin, Paris – and London, also on the hook – feel obliged to bail out a country that has so flagrantly violated the rules of the club, not least by holding Eastern Europe’s EU entry to ransom over Cyprus? That is neither forgotten, nor forgiven.
During the panic last February, German finance minister Peer Steinbruck promised to rescue any eurozone state in dire trouble. He is no longer in office. The pledge was, in any case, a bounced political cheque even when he wrote it. Greece can assume nothing.
