The analytical program "However," with Michael Leontyev, 16 June 2011
The collapse of one, seemingly small, entangled in debt of Greece, can destroy not only the Eurozone, but the entire financial system.
After Standard & Poor's sharply downgraded Greece's debt rating, the country was simultaneously on the verge of default and government crisis. At the same time, in exchange for a $ 110 billion stabilization loan, the European Union and the IMF demand from Greece to cut costs and raise taxes.
In fact, the Greek default is just a matter of time. See what happens. A debt-ridden country is offered help, as a result of which it should owe even more. Moreover, as a condition require cost reduction. That, in turn, undermines any economic growth, due to which, in principle, could be paid on debts. And then the rating agencies reduce the debt rating of the country. That is, borrowing becomes even more expensive.
Mark Lavoie University of Ottawa (Canada): "The irony is that rating agencies such as S&P are the very agencies that assigned the highest positions in ratings to all those assets that later turned out to be toxic. They were wrong then, I think they are wrong and now".
They are not mistaken. How the murderer does not make mistakes: the work is such. Greece is simply hammered into the ground. More precisely, screwed in a spiral like a corkscrew. Well, rightly so, sort of like! And let them live within their means! This, by the way, is a popular point of view in Europe, especially in Germany. And not here it was! Because the luxurious capital of the Central Banks of successful European banks - Germany or Luxembourg - these are the debts of unfortunate Greeks, Icelanders and Portuguese.
“The Eurozone was forced to choose from two evils: either default and exit from it of some countries, or endless state support,” says Martin Wolf of the Financial Times. Immediately he cites a curious schedule - the movement of capital between the central banks of Europe, which clearly shows how the huge debts of the troubled part of the eurozone are mirrored in the assets of creditor countries, primarily Germany.
That is, the same Central Bank of Germany manages debts, and, moreover, bad debts. If these debts collapse - what will he manage? Here it is, the curse of the European Union! It is impossible to force multi-level economies to work in the same way if you cannot drag them with loans. And you, as Americans, cannot just print money and devalue a dollar. This is the drop of nicotine that kills a horse, and the hamster simply tears apart.
Eva Nersisyan, University of Missouri (USA): "What are markets? A community of individuals, most of whom are twenty-year-old traders selling government bonds. And these people dictate to sovereign European states how much to spend and how much to collect taxes."
And where are you going to go, if the state took on private losses? The market is a stupid thing. If the market is unbalanced, it starts working like a killer. All your regulation is a choice between a quick finish and a slow agony. Americans have such an opportunity. In Europe, it seems, not very. That's the whole difference.
Information