Much pressed by his captor, Juan the dumb finally talked. Will the EU be able to return profitability to Greece by torturing the Hellenic government? It is clear that Athens cannot afford the bill; that´s why the market goes after its neighbors.
This was reflected yesterday after Spanish risk premium, as the Italian one, hit new highs even though Italy have savings and enough room to privatize federal operations, also rise taxes. However, neither Spain nor Italy grows at a pace able to cover their costs.
The contagion it?s unstoppable. Nowadays any plan that doesn´t seek a Greek debt restructuring seems useless, that´s why investors seem anxious. That is to say Europe 's total debt is not yet negative, but financial markets are pressuring to out the support from Paris and Berlin...or kill the euro. It´s important that German voters pay attention to their leaders about the aftermath of a European failure, which would impact them through a collapse in their banking system and a decrease of German exports.
We can´t forget that Europe was united under the threat communism, and now it has to confront aggressive competition from emerging countries. The PIGS can?t spend like Germans, but Germans can´t survive only by their exports.
Right now, EU must press CDS regulators and rating agencies to accept there would not be a default implied in a possible Greek debt restructure. It also must impose reform to enhance growth in peripheral countries and create a way to intervene financial markets? a situation that would finally create a common Treasury Department for all the EU members. The markets have put Europe over the edge, and if the dumb can´t speak its maybe time to change plans.
Translated and Edited in English by Jose L. De Haro.
