More good stuff from Daniel Hannan on the situation in Greece:
In private, everyone accepts that a Greek default is coming. So why do European leaders publicly pretend otherwise? What purpose is served by stringing out the problem? After all, with every hour that passes, Greek debts pile up, making the eventual reckoning heavier.
The answer can be found in two sets of statistics. A new study by Open Europe breaks down the liabilities between the public and private sectors. Foreign financial institutions currently own 42 per cent of Greek debts, and foreign governments 26 per cent, the rest being owed domestically. By 2014, those figures will be 12 per cent and 64 per cent respectively. European banks, in other words, will have shuffled off their losses onto European taxpayers.
Of course, the outstanding debt will have have risen substantially in the mean time: from €330 billion to €390 billion. Then again, as Eurocrats remind us every day, it’s remarkably easy to be generous with someone else’s money.
Hannan concludes:
When the West started down this road three years ago, this blog warned that the bank rescues would be the beginning our problems, not their end; that bailouts would beget bailouts; that every large corporation would start behaving as if it had a state guarantee. So it is proving. Profits are privatized, losses socialized. Capitalism and socialism are ceding ground to a grotesque new corporatism. We are back on the road to serfdom.
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