The rescue package is mostly about rescuing German and French banks, who are big holders of Greek debt. Greeks may not be popular in Berlin, but collapsing banks would not be more popular!
The difficulty is that Greece is small potatoes, it’s Spain, Italy, and the UK that are the juicy targets. The UK has the easiest position, because it can devalue the pound.
Sooner or later, Euroland will have to decide either to pitch out countries like Greece, Portugal and Ireland or to pony up at least $1 trillion to rescue Euroland banks.
Gorilla says: “Austerity is never having your banks say sorry!”
