Common Sense. It's not so common…

As the tragedy of Greek debt continues, the EU leaders, as can be seen in the following video, openly admit that there is no Plan B. Their only option, the only one they have considered and will consider, is another bail-out. This despite the fact that the previous one didn’t work (and nor will this one), and despite the basic principle that you can’t help a man drowning in debt by lending him even more money.

Daniel Hannan, in his article entitled “The EU is determined to postpone the Greek default until taxpayers have assumed the banks’ liabilities” espouses the theory that the idea is to bail out the Banks, and load the debt onto the taxpayers of the EU: behaviour which is, plainly, not in the best interests of Greece. He may, or may not, be right in that – I must admit, the motive for doing that escapes me – but, there is little doubt that that is the consequence we are facing.

As many said when Gordon Brown first started bailing out failed and failing Banks, all bailouts do is remove corporate responsibility by guaranteeing that they cannot fail however many risks they take. Daniel Hannan said at the time that “every large corporation would start behaving as if it had a state guarantee”. He’s right, because that’s exactly what they have done, precisely because they do have a state guarantee. In short – to link to another of Daniel’s articles with which I totally agree, “Profits are privatized, losses socialized” – that is exactly what is happening in Greece. And by “socialised”, we mean you, me and every other EU taxpayer assumes the debts that the Banks have run up so irresponsibly.
Read more...»