>I’m still trying to figure out why the Euros don’t just >flush Greece down the toilet? Maybe its the “own the bank” >issue?
The problem is that many German and French banks are up to their eyeballs in Greek debt (and Italian, and Portugese, and Spanish, etc). They are afraid of a couple things:
A) Having their banks take a huge hit if(when) the Greek bonds go into default.
B) A supposed ‘contagion’ of the problem spreading to the other PIIGS (Portugal, Ireland, Italy, Greece, Spain).
It actually is starting to look like the Irish have managed to dig themselves out, but the rest of the PIIGS are still in deep doo doo.
There is another rather sneakier reason that the Germans have put up with this nonsense- the PIIGS are keeping the Euro down as a currency, and this helps German exports. However this gimmick is likely to be pretty inconsequential if all the banks go to hell.
Really the only rational response is to simply chuck the Greeks out of the EU and let them sink or swim. The former is the probably outcome.
part of the problem is:
the banks were complicit in inflating the value of the Greek bonds. They don’t want to be exposed to a perp walk.
lets say the “Greeks are chucked out”, and then they tell the EU to go stuff themselves...
Then itally, prtugal, ireland, and spain also tell the EU (germans) to go stuff themselves. They have to in order to avoid be saddled with the now worthless greek debt.
The net result, for “chucking” is a worthless euro currency.
the EU will fall appart next. (all those do nothings in brussels will become unemployed)
This is now about the survivability of the EU. It is just happening within weeks instead of years.