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Will bankrupcy engulf all of Europe?

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Tattered Greek flag hangs on against a storm

 

We now reveal additional opinions that paint a dangerously grim picture of the consequence of a Greek exit from the Euro.Warnings of impending bankruptcy have been rattling around for many months, and perhaps we have fallen victim of one too many a cry of "wolf". Or perhaps the warnings are becoming part of the landscape, merely another element of a "new normal". If our sensibilities have been thus dulled, we ought to be working on a plan to deal with the wave of additional trouble when it comes. We reason that if we prepare and nothing bad happens we will be no worst off. However if we prepare and adversity increases we may find ourselves in a much more favorable position where our survival is much more likely than for most. Which seems to be the most prudent course of action?

 

From RIEAS: Fear will play again a major role on June 17. Do you think the doomsday scenaria about Greece's assumed exit from the euro, circulated by Eurocrats and economic analysts, will affect how Greek voters vote?

Estimates like this and this can really stir fear in people who have already suffered disproportionately and are given no hope for the future. Ultimately, Greeks are presented with two alternatives, viz.whether they want to be serfs inside the European "family" or famine-stricken beggars out of it. Opinions are divided as to what is the preferable future, but both futures hold no hope. In light of this, it will all boil down to the difference between (a) being "free" from the yoke of the lenders or (b) being chained to the sovereign debt as long as Greece remains a devastated economy with a strong currency. Mr. Tsipras has already delivered a defiant answer concerning this dilemma to Greece's "tyrants" in an interview with the Wall Street Journal (available to only WSJ.com subscribers) by warning that if Europe cuts Greece off the bailout funds, she will stop paying the lenders -- and a Greek bankruptcy will then engulf the rest of Europe.

What Angela Merkel was saying in February 2012 - Economic Times: "No-one can assess what consequences would arise for the German economy, on Italy, Spain, the eurozone as a whole and finally for the whole world" of a Greek bankruptcy, she added. "I can't go in for adventure, my oath of office forbids it," she said urging parliament to endorse the 130 billion euros ($175 billion) for a second bailout for debt-wracked Greece.

Will Britian remain a spectator or pitch in to save the Eurozone?

From Guardian: Officials from the Bank, the Treasury and the Financial Services Authority are drawing up plans in the expectation that a Greek departure from monetary union – increasingly seen as inevitable by financial markets – could be as damaging to the global economy as the collapse of Lehman Brothers in September 2008. With a second election in Greece called for 17 June, King dropped a strong hint that the Bank would take fresh steps to stimulate growth if policymakers in Europe failed to deal with the sovereign debt crisis.

From Reuters: "They should go to hell," said Giouli Thomopoulou, 59, an unemployed office clerk. "Only God knows what's waiting for us now. I'm very scared about the future.

"I don't think elections will solve anything because in a month we'll be in the same situation."

From Sympatico: That would almost certainly force Greece out of using the common European currency, the euro, which could unleash even more economic turmoil.

"The euro could disappear, and if the euro disappears, there is the danger that the whole European Union as such will disappear as well," Hans Stark, a political analyst with French Institute of International Relations (IFRI), said Tuesday in Paris. "And that will be a new Europe - and maybe not such a comfortable one."

 

We urge our readers to consider the reality of the Greek problem and how it is likely to spread to the rest of Europe. We opine that the EU is fundamentally flawed both in conception and ongoing execution of government by committee. We also urge our readers to do their own research regarding how the European debacle is affecting the US. There is no locality that will not be touched by these events.

 

Last modified on Monday, 11 June 2012 13:57

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