Re: Re: Why did Ireland bother? Don’t they have Trojan horses?

#101806
adiep
Participant

@logan wrote:

These countries will just roll over the debt and borrow more as and when it’s needed from Europe. I do agree debt deflation exists and will cause these countries some pain. However I repeat you cannot view this crisis with economic norms. The politics of Europe override all economic consequence.
In the case of Ireland the deep restructuring is starting to show some small results. If the economy can grow and it is basically sound the years of coming austerity will turn things around.
If there is to be default I agree Greece is the prime candidate but only if Germany runs out of patience.
The ECB have indicated this week their bond buying policy will increase. QE by another name with unlimited liquidity. Unless Trichet is trying to buck the market, and that’s entirely possible, it looks a done deal to me.
One the other hand………………………………..http://www.guardian.co.uk/world/2010/dec/03/angela-merkel-germany-abandon-euro
Beats me where she is coming from.

The risk from moral harard incurred in bailing out Greece and Ireland shouldn’t be discounted. These nations could quite easily continue to spend and the repercussions would be minimum, if, as you say, the economics wont override the political desire to maintain the euro.

Do you see what im getting at? To keep the Euro alive, it has to be an open-ended commitment to fund these nations. Any hint that its not, means default. Default means big trouble for the Euro.