With Greece sliding down the tubes, and the rest of the EU running around crying out "The sky is falling, the sky is falling", newsies on NPR and at The Economist keep agitating for a "firewall" (American speak) or a "ringfence" (European speak) around Greece to "prevent the contagion from spreading".
I wonder what they are talking about? Do they mean a great big sugardaddy who will step in and guarantee that all lenders to Greece and every other shaky country will get paid off in full and nobody will ever loose any money?
That would be nice, but neither the Americans nor the Chinese have that much money, and even if they did, they are not inclined to spend it on Europe. Nobody else in the world is big enough or well heeled enough to be a creditable sugardaddy.
The fundamental problem with Greece is nobody in their right mind is gonna lend them any more money. They are broke, owe more than they can ever pay, and still want to borrow more to cover their government spending. Their economy, never very good, is not growing, and doesn't throw off enough cash to pay their way. What kind of "firewall" can change that?
Then come the other shaky European countries. They aren't as bad off as Greece, yet, but everyone of sense can see where they are headed. Already they have to pay 5 and 6 percent for money while Germany and America can borrow for under 3%. As confidence wanes, they are going to find it harder and harder to borrow money. Soon it will become impossible.
Again, what sort of "firewall" will convince people to lend to deadbeats?
Or are we just hearing naive newsie's wishing for Santa Claus?
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