Search This Site:

Thursday, 26 January 2012

Greece likely to receive permanent bail-out, relieved of all obligations for financial prudence

If you bail someone out twice, they don't need to care anymore.  Greece can count on more bail-outs, indefinitely, should Greece want.  Europe's granting Greece a second, larger bail-out a year after the first bailout failed, and after it was revealed that Greece's national accounts had been falsified, relieved Greece of any serious incentive to reduce spending to less than income, and for financial prudence.  That second bail-out now appears to have failed.  Greece "struggles" to meet fiscal commitments agreed for bail-outs.  The US will likely prevent Greek default at any cost, because
US financial institutions, who have taken imprudently large (huge, it appears) gambles that Greece will not default, are now threatened with bankruptcy by Greek default.  Those US institutions have the US government in a corner, the US government convinced that they are "too big to fail", and therefore that Greek default should be prevented at any and all cost.  Those institutions, just like Greece, are now also completely relieved of obligations for financial prudence, and continue increase their risky positions astronomically.  Global financial imprudence and risk continue to grow, rapidly, making worse a financial crisis whose cause is too much debt.

No comments:

Post a Comment