Below is a video clip taking a lighthearted look at the bailout of Greece and just how crazy the steps taken by the Euro Countries have been.
Billions of Euros have been spent in the bailout that the Euro Countries simply do not have (yet). Who knows, it’s always possible that if the politicians of Europe have their way with this bailout that the new official language of the Euro zone becomes Chinese?
The Chinese are keen to acquire a chunk of Europe by assisting with funding for the bailout. They are on record as saying that they already hold far too much US dollar debt so what an opportunity for them to acquire some of the European debt at bargain prices.
Jokes aside, the most severe risk faced by all the Euro zone countries is that the bailout package being put together is not successful and confidence in the weaker members of the Euro zone is not restored.
Sitting in the wings of the theatre that is Greece is two other Euro zone countries that have come very close to the same bailout position that Greece finds itself in. Both Italy and Spain have taken steps to bring down their high debt levels without the same level of bailout intervention by the other Euro zone countries. Their austerity measures have stalled for now and any large-scale bailout will depend on the outcome of the Greece rescue.
The problem with austerity measures when used for reducing levels of debt is they have a way of shrinking the very economy that is needed to drive the reduction of debt. Austerity makes it even harder to pay for the debt already incurred because taxes that are derived from economic activity and a major source of government funds have shrunk.
Will there be forgiveness for the debt? Not sure but the most honourable way to reduce debt levels is simply to pay it back. The problem is however that Greece is now and in the future unable to meet these commitments to pay back the debt.
This inability to pay back the debt will have a severe impact on the country’s reputation as will the acceptance of a bailout. The turmoil will likely be felt for decades in the future by Greece and the other Euro zone countries.
What is particularly concerning are the riots in Greece. Protestors object to the austerity measures taken by their government, while the other Euro Zone countries have set down harsh steps for for the Greek government to follow as pre-conditions to provide support.
Greece simply cannot go on spending money it does not have or earned through the sweat of their brow.
It’s time the people of Greece realise that the party is over and they should embrace austerity and be thankful for the bailout.
It’s time to pay the piper.