What is going on in Euro zone, another country joins the downgrade top of the pops every week. Today Germany’s cost of borrowing increased, Italy yesterday, Spain last week and we’ve been reading about the Greek and Irish crises for some time now. Without wanting to seem like a card carrying Tory, why are we legally obliged to help these countries in their bailout when we have enough of our own financial problems to deal and we do not use the Euro? The agreements that were signed decades ago between nations were in a completely different economic environment.
I speak anecdotally but I have good friends in most of the Euro zone countries facing difficulty and bailout and they told me stories of their friends taking out loans to buy huge flashy cars, designer clothes and property in the good times. Everyone joined in the cheap and plentiful credit lure and sold their souls to the banks.
However, some of these countries had and continue to have fundamentally different values to, for example, Germany and the UK. Before the Euro you had to bribe civil servants to do their job and after the Euro you still had to bribe them. The civil servants worked part time hours, often moonlighted as it was perfectly possible and normal and took early retirement with full pension until they fell into their graves. Of course such behaviour is unsustainable and unproductive for a nation’s GDP especially when it is public sector heavy and tax avoidance is a national sport.
The heads of these countries keep getting summoned to secret talks that are published in the international press but what’s the point? Whole cultures and mentalities need to change not just bailout credit terms. Euro zone populations need to get real and come to terms with the fact that nothing is free and easy.
Bubbly
