Longstanding and dear friend, David Rowlands called in my office this morning, plonked himself down and handed me another of his letters. David is a full blooded Ukip man. I assumed it would be another of his 'outraged' letters - probably about the idiocy of pouring more billions down a Greek drain. But No, he was supporting me on my mission to prevent the mid Wales uplands from becoming industrialised by wind farm companies. It didn't matter because Boris dealt with the impending Greek tragedy in his Telegraph article today anyway.
Boris says that "We should stop chucking good money after bad". This will have a lot of purchase because so many people who talk to me about Greece agree with Boris. In fact people who talk to me about anything agree with Boris on this. Now, the consequence if no-one chucks more more money at Greece is 'default', exit from the Euro, followed by unpredictable turbulence across Europe and wider. Another way of looking at all this is to see the EU as developing into a single state (fiscally speaking) and these massive transfers as a sort of EU Barnett Formula - an extension of regional policy. This could well be the equivilent of Baldrick's cunning plan. I hope David didn't read the Boris article or he'll be back in my office tomorrow with another envelope.
1 comment:
I'm not an economist, but isn't it true at the time of when the Euro was introduced; greece was one of the countries that didn't pass 'the tests'?. Yet to what seems as purely political reasons they were allowed into the club.
Now they cannot devalue their 'drachma' (as they would and should!) instead the only route is ANOTHER bailout, or bankruptcy.
I'm a fan of a single currency. But this crisis has made it evident that there are two levels of countries in the E.U - the PIGS (port, ire/ital, gree, spain) and then France, Ger, Nether etc. Surely, looking back the E.U should have said that only nations that pass a strict test that should join it; but they didn't and now we are all paying for it (literally!).
Where next? The Euro simply cannot fail, so I really don't know!
One things for sure; when making decisions like these, politics should never come into it. Greece are now learning this the hard way.
A good article on it is here: http://www.vanityfair.com/business/features/2010/10/greeks-bearing-bonds-201010?currentPage=1
it's the greeks that broke their banks, not the other way round!
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