25/9/2011
This is a column by financial journalist Michael Pascoe that believes that Greece will default on its bailout by the Europeans. He shows that Australian Treasurer, Wayne Swan, cannot give a simple answer on Greece's problems, as he knows that Swan knows that it is impossible for Greece to pay off its debt. Therefore the EU should no longer be funding Greece to not default
Usually if a country like Greece was in debt it wouldn't be much of a problem as Greece does not have a rather large economy. However it is part of the European Union, which services the second largest stock exchange in the world. And therefore it had been bailed out by the European Central Bank, in a loan in which Greece will not pay back. This will leave Europe in plenty of debt, and meaning that stock markets around the world but especially in Europe will fall, possibly sparking a double dip recession, which will be worse than the GFC of 2008-09.
Pascoe does not believe that the IMF or the G20 will do anything about this problem except to throw more money at Greece that seems incapable of sorting its finances.
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