A comical, yet tragic, update regarding the economic bonfire in Western Europe has been long overdue – here we go. For anyone (most people) not following the scenario in Europe, I’ll give a quick recap.
When the majority of Western Europe bought into currency consolidation through the European Union, their most prominent point of foreign criticism focused on how more successful nations, such as France and Germany, could afford to bankroll the social welfare of nations who simply didn’t possess the resources or structure for long term economic competition. France and Germany believed the opportunity for expansion into such countries would help to mitigate their losses, but understood the rebuilding challenges would be tough at best.
We’ve now reached a point, due to ill-advised policy decisions and bad economic planning, where Greece, Spain and Portugal are all on the verge of complete collapse.
I know what you’re thinking. This is simple, right? I mean The Greeks messed up. They like, America overspent, and in a country that couldn’t pick up NYC’s garbage collection bill from last week. Wrong. The European Union, in an effort to avoid further devaluing of its own currency, is considering an almost complete write off of all Greek debt.
After an underwhelming meeting between the Obama administration and European leaders at Camp David over the weekend, it has become increasingly clear that Europe’s defaulting nations are unwilling to compromise on any plan that doesn’t involve debt consolidation or removal. Greece is even considering a return to the Drachma, a valueless currency they held prior to joining the EU.
The idea of Greece exiting the EU causes a ton of problems, the largest of which is a possible run on Greek banks.
Just as in the United States, Greece has deposit insurance. But with frightening talk of a return to the Drachma, Greeks in the know are pulling out. Experts believe any retreat from the Euro will result in substantial losses to the value of any currency remaining in Greek banks. Here’s the problem. Greece doesn’t have any money.
According to EU sources Spain would stand a modest chance of paying out what it owes account holders, while Portugal and Greece stand no chance at all. Through all of this, France and Germany are still not willing to watch these countries implode.
At what point do you simply let the Greek people suffer for the mistakes of their altruistic Government? I’d say $1 Trillion ago would have been a nice start. But we aren’t going to see a change. Greece and Portugal will fail to be sustainable countries because they have no industry or discernable value within the global economy – this is simply a fact. They have no resources. Their people have no sense of labor value. They produce little to nothing in the way of meaningful exports. They provide Western Europe with no positive contributions.
In closing, social engineering fails – again. But I guess we’re all just our brother’s keepers, right? I mean, that’s what Jesus supposedly told someone at some point. Apparently mankind has taken that passage to heart, and clearly to our own detriment.