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Wednesday, 3 February 2010

Greece and Spain must go back to being poor

Spurn any feeling of Shadenfreude that Greece's parlous economic state may engender and forget any prospect of the Euro collapsing; the EU's grasping tentacles have a claim on the UK to subsidise failing eurozone economies, despite our not being in the eurozone, and it's decided by majority vote. The Germans may soon be standing on the doorstep asking us for £5bn. And if Spain gets in on the act, it could be a lot more.

A Prime Minister with even a hint of spine (that's courage, Gordon) would refuse to pay; it's their euro, let Germany bail them out. Except the Germans are unwilling to spend their own money - they want to use ours.

The alternative solution is an attractive one. Let Greece go back to the drachma and Spain to the peseta, allowing them to savagely devalue their currencies, go back to being poor and making their countries affordable holiday destinations once more.


Weekend Yachtsman said...

" The Germans may soon be standing on the doorstep asking us for £5bn."


To bail out the Greeks, when our own position is just as dodgy?

So the EU's plan is that we should borrow more so that the Greek socialists don't have to face up to reality?

This had better be a joke.

Surely even Brown is not going to fall for that one.

Krauser said...

Agreed, but I've got one point - Spain and Greece never stopped being poor, all those assets and foreign investment came with liabilities. Their level of capital formation barely increased.

Mike Spilligan said...

Weekend Yachtsman: "Surely even Brown is not going to fall for that one."
He'll wilfully "fall" for it as he hasn't got that new EU job lined up yet.

Blue Eyes said...

Same thing needs to happen to Britain, too. None of us want to give up our luxurious lifestyles but the fact remains that we do very little to international standards.

Ultimately it is productivity which determines wealth, and Britain ain't producing much.

English Pensioner said...

I just wonder about people who have money in Santander, AKA Abbey if Spain drops out of the Euro. Will the government have to rescue them like those who invested in Iceland?

Demetrius said...

Perhaps the Mediterranean lot could have an alternative currency? Say the aureus, the denarius, the sestertius, the dupondius, and the as. They could also have a common armed force based on Rome to administer it as well as a clearly defined social structure.

Ed P said...

Blue Eyes is correct - the UK is just as badly off and we are "living on borrowed time". And the UK's AAA rating could be gone in a few weeks time, resulting in a big jump in inflation and the cost of borrowing.
Double dip recession, huh, you were lucky - we 'ad a triple dip. Youngsters nowadays don't know how lucky they are, etc, etc, etc.