Wall Street News

British treasury plans for Greece to go bust.

by The Telegraph:

In an emergency debate, senior MPs from all parties demanded that Britain stand aside from a new rescue package for Greece and push for the country to leave the euro.

Ongoing protests against the austerity plans.

Mark Hoban, a Treasury minister, admitted that “many scenarios were being considered”. He said it would “not be appropriate” to discuss the detail, but added he would be “guilty of not stepping up to the responsibilities of his office” if plans had not been made to cope with a default.

He said British banks had about £2.47billion in outstanding loans to Greek institutions and individuals.

Last night, after leaving a meeting with eurozone ministers in Luxembourg, George Osborne, the Chancellor, insisted that he did not want to see Britain dragged into providing money for a second bail-out.

The European Union and International Monetary Fund will send a team of specialists to Greece today to assess whether a new austerity plan involving tax increases, privatisations and spending cuts is sufficient.

Finance ministers will meet again next month to finalise the bail-out but there are growing calls for Greece to be allowed to default on its debts and leave the euro if necessary. Yesterday in his Daily Telegraph column, Boris Johnson, the Mayor of London, called for Greece to return to the drachma.

Some experts have forecast that a default would trigger another global crisis as banks refused to lend money to weaker eurozone countries.

 The Telegraph

One commenter noted:

The fact is that Greece is going to go bust no matter what the EU does.  EU ministers are doing the bankers bidding in trying to delay this from happening: the longer it takes Greece to default, the more of Greece’s debt will have been taken onto the books of central banks.  

The proposed ‘bail out of Greece’ is no such thing.  It is just an attempt to shift as much of the resulting loss from the banks to the taxpayer.

Sadly, the only real way to economically save Greece is for them to abandon the Euro and revert back to their own currency. A low cost currency would save Greece by attracting private companies looking for “cheap” companies to buy.

The Brits are ahead of the game, I wonder if Germany will follow suit.