croc
6th August 2012, 05:30 AM
more at link ....http://www.plata.com.mx/mplata/articulos/articles.asp
The house has burnt down. Nothing is left of it but a pile of wet ashes. Pop and Mom and their numerous progeny gaze at the ruins, speechless.
Pop turns to the family and says: “Mom and I will have a summit meeting tomorrow, to find a solution to this problem. Tomorrow we’ll have the definitive solution to this crisis; in the meantime we’ll sleep in a tent that our German neighbors will rent us.”
* * *
The European house has burnt down financially. In 1999 the Euro was installed as the single currency for a central group of European nations. The interest rates of the various nations were to be set by “diktat” of the European Central Bank. No nation was to be allowed to have a Fiscal Deficit of more that 3% of GNP.
Thus was set up the orgy of government and private sector borrowing and spending on the part of the hot-blooded nations of Europe, that is to say those that form the “Club Med” of Europe: Greece, Italy, Spain, Portugal, with the participation of Ireland and even France. Never were seen nor dreamt of in dreams such low interest rates and such easy credit in those nations.
The spending was gigantic. Never was Europe so happy. The governments showered benefits upon the governed. Life was pleasant, free of worries. The good life was assured: modern housing, autos (his and hers), free education for the kids, medical and hospital insurance, generous pensions for early retirement, a monthly check in case of unemployment; in Italy, three months’ vacations. The standard of living in Europe was the wonder of the world.
What nobody saw, was that the Europeans were burning their financial house down while they went on vacations, munched their tasty “hors d’oeuvre” and washed them down with delicious wine. In Spain, costly airports were built that never got any air traffic. Spaniards boasted that they had the finest highways in the world.
Europe burnt down its house when its governments and private sectors took cheap credits in gigantic quantities and spent the funds on current expenditures to please the people with benefits and services, on maintaining a bloated bureaucracy in comfort, and on unprofitable investment projects.
For example, the small Portuguese island of Madeira boasts a fabulous complex of super-highways that cross the mountains of the small island through long and ample tunnels, all spotless and well lit. Many hundreds of millions of Euros were spent in building those highways and a beautiful modern airport was carved out of the mountains. How will the population of 260,000 inhabitants ever pay off the debt that was taken on?
Europe was able to burn down its financial house in 13 years.
The house has burnt down. Nothing is left of it but a pile of wet ashes. Pop and Mom and their numerous progeny gaze at the ruins, speechless.
Pop turns to the family and says: “Mom and I will have a summit meeting tomorrow, to find a solution to this problem. Tomorrow we’ll have the definitive solution to this crisis; in the meantime we’ll sleep in a tent that our German neighbors will rent us.”
* * *
The European house has burnt down financially. In 1999 the Euro was installed as the single currency for a central group of European nations. The interest rates of the various nations were to be set by “diktat” of the European Central Bank. No nation was to be allowed to have a Fiscal Deficit of more that 3% of GNP.
Thus was set up the orgy of government and private sector borrowing and spending on the part of the hot-blooded nations of Europe, that is to say those that form the “Club Med” of Europe: Greece, Italy, Spain, Portugal, with the participation of Ireland and even France. Never were seen nor dreamt of in dreams such low interest rates and such easy credit in those nations.
The spending was gigantic. Never was Europe so happy. The governments showered benefits upon the governed. Life was pleasant, free of worries. The good life was assured: modern housing, autos (his and hers), free education for the kids, medical and hospital insurance, generous pensions for early retirement, a monthly check in case of unemployment; in Italy, three months’ vacations. The standard of living in Europe was the wonder of the world.
What nobody saw, was that the Europeans were burning their financial house down while they went on vacations, munched their tasty “hors d’oeuvre” and washed them down with delicious wine. In Spain, costly airports were built that never got any air traffic. Spaniards boasted that they had the finest highways in the world.
Europe burnt down its house when its governments and private sectors took cheap credits in gigantic quantities and spent the funds on current expenditures to please the people with benefits and services, on maintaining a bloated bureaucracy in comfort, and on unprofitable investment projects.
For example, the small Portuguese island of Madeira boasts a fabulous complex of super-highways that cross the mountains of the small island through long and ample tunnels, all spotless and well lit. Many hundreds of millions of Euros were spent in building those highways and a beautiful modern airport was carved out of the mountains. How will the population of 260,000 inhabitants ever pay off the debt that was taken on?
Europe was able to burn down its financial house in 13 years.