The European Union, in violation of its non-bailout clause, guarantees debt for its defaulting members.
- This just postpones the problem of the huge debt which will come due at a later time.
- It also does not solve the structural problem, that countries with very different attitudes and politics are ties to one currency.
- Did you know that in the rich productive countries of Europe, like Germany, salaries are lower, the retirement age is higher, Now try to tell a Greek or Portuguese worker to reduce his salary and retire 5 years later. This is why we have riots all over Europe.
- So either break up the monetary Union to separate countries with different monetary situation
- Or let the markets decide. Once a country defaults, the lenders will get the message that they should check how credit worthy a country is, before lending their money.
- Almost all countries in the world increase their debt every year. No payback schedule in sight. Only ever growing debt. Critics think the debt of almost all countries in the world is unsustainable.
Weinberg said there is nothing on the table that can stop the euro zone falling into crisis.
“Not only is there no solution in hand, but there is no inkling that any idea on the table at this summit could plausibly avert a default on substantial portions of euro land’s sovereign debt,” he wrote.
“Lending money to already over-borrowed nations does not help or fix them. Also, no plan exists for strategies to cope with the fallout of a sovereign default should one occur,” Weinberg added.
Is Europe Slipping Towards Default?
The entire world economy is driven by blindness and greed. Greed of corporate executives, of politicians, and yes, greed of the citizens who want their perks, high pay, and little work. Keep borrowing till the world financial system collapses. Keep bailing out to buy a bit more time, the delayed collapse will be even worse.