August 26, 2011

Not so inevitable

The Greek banking system is now basically dead. The only thing keeping blood flowing around the corpse is the life support system provided by the EU, if that is turned off so is the greek financial system. Unfortunately for the EU that would mean all of the collatoral that the ECB took in exchange for earlier money transfusions will suddenly become worthless. At that point the ECB itself would find itself scarily close to backrupcy. Pro-EU people always use 'inevitablity' as their standard argument for why the UK should go along with ever closer union, but the only thing that looks inevitable is the self-destruction of the EU's centerpeice and the massive collateral damage that this will cause.


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