HOW THE GREEK TRAGEDY will end.
Over the past 18 months, the fiction that chronically dysfunctional, spendthrift Greece could, even with massive handouts, reform its way back to economic health has cost Europe’s taxpayers billions that would have been better spent on offsetting the costs of an early and orderly write-down of the unpayable debts of a country of little importance. Worse still, the political pussyfooting over Greece has cost governments vital credibility at home and abroad and magnified the risks to the euro that they sought to avoid.
If the idea was that pouring money into Greece would divert attention from Portugal, Spain, or Italy, the strategy backfired: financial markets reasoned that if politicians lacked the courage to face the facts in Greece, what confidence could there be that peer pressure would compel Italy and Spain to put their appalling finances in order, starting with taking a wrecking ball to demolish their extravagant publicly funded networks of political patronage? The more Merkel and Sarkozy insist that Greece’s future lies squarely within the eurozone, the more they put the euro at risk.
Feckless politicians, running out of other people’s money.