EU bailout of Greece will end in failure

WITH the new Greek rescue the EU should take heed that it is now heading where Greece has gone.

Rather than making the errant drunk (ECB) do cold turkey at an early date, it (the EU) has given him/her more drink (debt) at a higher price (interest rate) in the hope that he/she will go away and reform him/herself.

Not only will it not happen, it cannot happen as more debt at higher (market) interest will simply push the ECB/EU (via Greece/Ireland et al) ultimately to do cold turkey at a later time when it is truly hooked on debt from its EU Political masters.

All of this on foot of the ECB’s policy of no default on senior bondholders.

The most accurate comparison is: ‘parents who refuse a life saving blood transfusion to their own child because their religious dogma forbids them to do so’.

The ECB’s ‘no default’ policy is their religious dogma.

In failing to deal with the problem the EU/ECB is simply building up more and more debt which will ultimately break it unless it sacrifices the policy, making senior bondholders take a large chunk of current bad debt and prints euros for most of the rest of the bubble debt and gives it to debtor countries at an interest rate of 0.5-1.0%.

Faced with this reality, neither the amount of Ireland’s current debt nor the current interest rate on that debt matters a whit.

What does matter is our relative health (budget deficit) after the bust.

This is why our new government must pursue public and private sector reform relentlessly to root out inefficiencies, demarcations and assured vested interests fully and at an early date.

One gravy train that it must axe soonest is the NAMA Trojan horse and gravy train.

Kevin T Finn

Mitchelstown

Co Cork