Thursday, July 14, 2011

The Truth About the Greek Bailouts

History has shown that a common tactic of governments with totalitarian aspirations is to create a problem and then present themselves as the only solution to that problem. Nowhere is this more evident than when it comes to the European Union's handling of the Greece bailouts.
As Daniel Hannan (one of the few remaining law makers with any sense) has pointed out, the EU continues to presents itself as the answer to the Greek economic crisis. In actuality, the EU is one of the principal causes of the disaster.

Greece is a clear victim of the single currency experiment. The single currency has locked the nation of Greece into an exchange rate at which they cannot compete and from which they cannot escape through devalueing. The only way that Greece will be able to recover is to leave the Eurozone.

The European Union continues to pour money into Greece in exchange for Greece allowing it to dictate its economic policy. But the bailout money from the EU does not actually end up in Greece at all. It goes to German and French banks who “own” Greece’s debt. That is to say, the EU continues to subsidize bad investment, and to use money from Britain to do so. The Greek people, on the other hand, are being sent the bill for the European Union buying this debt. Who benefits from that exchange? Only wealthy German and French bankers.

William Hague’s prediction that for some countries the euro would turn them into a burning building with all the exits blocked, has now become a reality for Greece. The problem will repeat itself when other poor Eastern European countries join the Euro next year.

In an article for the Daily Mail, Iain Martin commented most astutely: “This should be a moment for EU leaders to stop and reflect with humility on the folly of their Euro experiment and on the perils of trying to squeeze disparate economies into a one-size-fits-all currency zone.”

Further Reading

European Union Invokes New Heavens and New Earth 
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