Quote:
Originally Posted by Bri
That seems quite a universal approach in politics.
Direct income transfers are sensitive topic for politicians. The sovereign debt crisis was more of a symptom than a cause. The high interest rates on sovereign debt were in large part driven by a fear of the high systemic risk in the European banking sector, not so much by the unsustainability of public finances in the PIIGS. Had the interbankmarket remained functional and the ECB quicker on the provision of liquidity, things might have turned out different.
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I warned that would be overgeneralizing
Anyway, you are describing the vicious circle that the current policies for euro has created, states need finances and being unable to print money they lend from banks, reducing their credibility, and being unable to pay their sovereign debt, forcing the banks into insolvency, only to burrow even more to rescue them, putting both sides in an even worse situation... details of course are different from country to country, but all them were forced into this endless spiral because of the rules that ECB has for the banking system within the eurozone, dictated by IMF, German bankers and their main clients, who coincidentally are the legal financial supporters of the conservatives in the coming elections. Dunno, the way I see this situation, whether euro is left with Germany, or a true financial union is created, now the damaged has been done, and there is absolutely no desirable alternative left to avoid years of recession, social and political instability. I just hope it won't lead up to a war like it did in the 30s.