In this post, Rob argues that it's time to 'pull the plug on Greece'. See all related posts here
European Democracy At its Best
Democracy in Euroland at its best – we saw it in Ireland when they voted no to the Euro, but were then told to go away and have another vote until they got the right result – they were finally worn down and voted to join the Euro zone – what a great decision.
Now we have Slovakia voting "no" to an expansion of the EFSF bail out fund – what do Germany and France say – "ignore them and let them vote again" bound to come up with the right answer at some point.
Greece failed to meet its deficit targets to ensure a further tranche of bailout funds, but what do the EU inspectors say – "never mind, give them the Euro 8bn anyway"
Ratings agencies are happily cutting European bank ratings across the board.
Barroso the EU Commission President came out with some interesting logic the other day – the UK should help bail out Greece (and hence the Euro) because we helped out Ireland with a unilateral loan of £7bn. Absolutely no comparison – we have huge trading ties with Ireland, and irrespective of whether you agreed with it or not the survival of Ireland is vastly more important to the UK than the survival of Greece. One of the most telling comments I have read is "Since when has it been acceptable for a club to demand a massive subscription from people who don't belong to it?
Totally bizarre – Euroland is in a complete mess, but the market is clutching on to any bit of good news – Euro/$ has risen to 1.3775 and £/$ has risen to 1.5750.
Stock markets looking higher – FTSE trading at 5,400 with most other indices showing strong gains as well.
I fail to see on what basis any of the above is considered to be good news – they are all decisions based upon flawed fundamentals.
On top of that, UK unemployment has hit 17 year highs and growth in the UK economy was an anaemic 0.5% in the 3rd quarter – similar news out of Europe is equally as bad.
I think that France and Germany have simply decided that Greece and the Euro zone will survive, or they will go down in flames trying.
The Euro zone concept is on life support – if ever there was a case to be made for euthanasia then this must be it – pull the plug on Greece and let them go with a degree of dignity.
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The author, Rob (not his real name) is a treasury manager at one of UK's largest charities, he was formerly a trader.
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