Banker BS. The only reason Greece got bailouts because behind the scenes the EU and US bankers did not want to pay the price for making wrong bets on Greek bonds. So they spin the story that the world would come to an end if Greece defaults (just like TARP). Where did all the EU bailout money go? It went to the Greek banks so they can cover any money they owe EU banks. The people of Greece did not get any bailout except decades of austerity.
Iceland defaulted and went back to the Krona. Everything hit true bottom, prices adjusted to true value and investors are coming in. Iceland GDP is one of the few EU (former) that is increasing while most of the world is stagnating or contracting. We don’t hear about this in the MSM because the central banks and EU/US banks don’t want anyone to know except the bail me out or the economy will implode. This way affected nations will go to the central bankers and scream bailout and nations with the means to provide the bailout money think this is a necessary evil.
Greece should declare bankruptcy and return to the drachma. Greek people will suffer inflation and prices of assets will hit true bottom. Greek labor will be extremely cheap and foreign investors will come in to buy assets and even build factories and service industries to take advantage of the Greek low cost labor. Iceland already prove bankruptcy and going back to their national currency was not the end of the world. Only the EU advocates, central bankers and US/EU bankers don’t want it for their own political/financial selfish reasons.
Thanks for the interesting update on Iceland.
I would hope that the Greeks could perform as well as the Icelanders if Greece exits the euro. There is a lot of ingrained socialism and sloth among the Greek people. I was in Greece last summer and one of the tour guides admitted, without shame, that during the low season (Nov-April), the tour guides are heavily subsidized by the government when there is little or no work. Tourism is serious business and these guides are certified by the state and unionized.
I don't believe that's correct.
Iceland has never been a member of the European Union, has always used the krona, and certainly was never part of the euro experiment.
Indeed, it's the opposite: Iceland has recently applied to join the EU (here's the timeline at Iceland's Foreign Ministry), and there's still some talk about Iceland joining the euro:
Iceland Will Adopt Euro or Other Currency, Prime Minister Says (March 10, 2012)