Thursday, October 17, 2013

Greek government refuses to economize

Re: New cuts not possible, Greek prime minister tells euro area official

Here's another example of why Europe will NOT resolve its debt crisis. There is no enforcement mechanism that would require deficit countries to economize. The Greek government is more concerned about its own electoral success than solving the nation's financial problems. This simple fact will always prevail. When faced with the choice of remaining in office or actually doing something constructive that might threaten the party at the polls, the governments of the deficit nations will always choose remaining in office and thumbing their noses at their creditors. This article also clearly states that the European Central Bank holds sovereign debt, which was explicitly prohibited by the Maastricht Treaty. It is time for responsible countries like Germany to recognize that the EU they thought they were joining does not exist. Germany would not be leaving the EU, because there is no EU, just a group of debtors trying to convince Germans and others to put them on international welfare forever.

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