The primary goal of this financial rigmarole is to blind the European
taxpayers (ie the Germans) to the reality of their position. Imagine having a
sordid, lying, cheating, stealing Section 8 tenant--then solving her insolvency
by paying yourself the rent she owes you. Of course, this is only a temporary
expedient until she reforms her ways!
Though most people cannot understand the procedural intricacies of the
Eurocrats and their obliging Greek "friends", an editorialist can readily sum
the figures for his readers. That sum, by the way, seems to be about $70 billion
out the door and in the wind thus far, with real interest rates consuming
about $5 billion a year so long as the Germans continue to service 75% of Greek
debt. But, in addition to paying interest, they persist in sending more fresh
capital into the black hole. Their total default exposure is around $170 billion
just for Greece's public debt. Greek banks also owe debt to the Germans in the
multibillion dollar range. If Greece leaves the EU, the nominal cost will probably
be $300 billion or more. The real cost involved in radically upending business expectations and altering the terms of trade will be substantially higher. And the cost will fall upon the creditors primarily in either case.
And then we have the Iberians.
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