Sovereign Default: The Spectre That's Haunting Europe

adamsmith.org ^ | May 5, 2010 | Liam Ward-Proud

[Pining_4_TX]

Years of fiscal profligacy and an expensive financial crisis have taken their toll on Europe. The sustainability of the European ‘Social Model’ is becoming increasingly unclear. Greece has received huge bailout funds but may still fail to meet it’s debt obligations, Portugal has been forced to effectively halt party politics in order to work through a solution to it’s budget crisis, Spain is acting to tidy up public finances but still looking shaky, as are Italy and Austria, and Germany is rightly terrified of the potentially dire consequences of the Greek disease spreading further. The nightmare scenario is that one of the weaker countries defaults on it’s debts, or gets close enough to seriously spook the markets, thus setting off a domino effect throughout the region.

[Pining_4_TX]

The last line...

“It would be ironic if, as the USA moves towards a more European-style healthcare system, Europe (UK included) starts to realise it can’t afford its own.”

[Liz]

The Greek/EU tragedy's cast of characters is eerily similar.

ITEM Non-stop socialism

ITEM Nationalized healthcare that broke the bank

ITEM Greece paid Goldman Sachs $300 million in fees for arranging the toxic 2001 transactions, according to several bankers.

ITEM Witness the extensive political power of dominant public sector unions....rioting in the streets, bringing the gov't down.

ITEM Ohaha reflexively bails out anything that has a union.

ITEM "Professor Ohaha" knows nothing about int'l finance. But Wall Street Rahm Emanuel sits in OUR WH.....AND is a G/S toadie.

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Goldman Sachs Will Be Sitting Pretty With Emanuel in the Obama White House
Timothy P. Carney, Examiner Columnist, November 21, 2008

EXCERPT Goldman Sachs always has clout in Washington, as evidenced by the firm’s alumni serving as Treasury secretaries under both Presidents Bush and Clinton. Today, in these tumultuous times of bailouts and meltdowns when the investment banking leviathan needs Washington more than ever before, Goldman can leverage its most valuable asset yet—incoming White House chief of staff Rahm Emanuel. Traditionally a Democratic booster, and one of Barack Obama’s top sources of funds in this past election, Goldman has always had some particularly strong allies within government.

Emanuel is one such ally.

An interesting early chapter in the Goldman-Rahm Emanuel relationship occured during Bill Clinton’s 1992 presidential campaign. Clinton hired Emanuel as his chief fundraiser. At the same time, however, Emanuel was on the payroll of Goldman Sachs, at $3,000 per month to “introduce us to people,” in the words of one Goldman partner at the time.

In his four terms in Congress, Emanuel raised $74,750 from Goldman, making the firm his number four source of funds.

How has Emanuel helped Goldman? The most obvious answer, as mentioned in this column two weeks ago, is in Emanuel’s lead role in shepherding the “$700 billion” bailout—first proposed by former a Goldman CEO, Bush Treasury Secretary Henry Paulson—through the skeptical House.

In the Clinton days, Goldman benefited from NAFTA and the bailout of the Mexican currency, with Emanuel pushing NAFTA through Congress, and Rubin hammering out the peso bailout.

Did Goldman improperly funnel money to the Clinton campaign by subsidizing Emanuel’s salary in 1992? Did Goldman’s help to Clinton spur the Democratic president to push NAFTA and the Mexican bailout? The answers to these questions are opaque, and with Emanuel burrowed deep within the Obama White House, the continued relationship between Goldman Sachs and Obama’s right hand man won’t be easy to follow.

CLUES Watch which regulations of Wall Street Obama fights for. Watch where the bailout money goes.

SOURCE http://www.washingtonexaminer.com/opinion/columns/TimothyCarney/