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Friday, March 26, 2010

The Greek Bailout

Despite protestations from Greece that it would look to the IMF not the EU for a bailout (if it "really needed one"), a joint IMF/European bailout of sorts has been agreed.

EU leaders have agreed on a paltry $30BN bailout for Greece, which will simply delay the day of reckoning for that failed economy.

In return for this much hyped gesture of little substance, the EU has extracted a heavy price. The EU has granted itself sweeping new powers to co-ordinate all EU economies.

Whilst the Euro made some recovery, this will be only a short term recovery. Even if Greece really has been "saved" (and there are serious doubts that it has), there are other EU countries that are also close to economic meltdown eg; Portugal, Spain and Ireland.

As part of the deal the little known and untested Herman Van Rompuy, the permanent European Council President, is now in charge of "the economic governance of Europe".

Unsurprisingly there have been calls from Angela Merkel, the German Chancellor, for a new treaty to give the EU extra economic powers. Those with good memories will recall that only last year EU leaders "promised" that they wouldn't need anymore powers, and that the Lisbon treaty was good enough for at least 10 years.

The lesson to learned here is that politicians, most especially European politicians, should never be trusted.

This will end badly for Eurozone countries, both politically and economically.

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