February 18, 2012

Naïve trust was what caused Greece’s illness.

Sir, Tony Barber titles his article “Malignant mistrust threatens to be the death of Greece” February 18 and speaks about “the slow uncoiling of malignant forms of mistrust in Greek society”. 

Hello, where has Mr. Barber been! I have never ever known a Greek who has expressed trust in his government, has he?, and, if something really caused the death of Greece, that was the bank regulators’ incredibly naïve trust in Greece which they shown by allowing all European banks to lend to its government holding only 1.6 percent in capital. 

The Greeks meanwhile, knowing the Greeks never thought of doing something as stupid as lending to their government so much money at so low rates, and so instead they took a couple of hundred of billions Euro out of Greece and lend it among others to the German Government. 

And so now we have for instance German banks with billions of Greek debt, and Greek citizens with billions of investments in German debt which sort of leads us to the question of… who seem to be better off? 

The reason the Greece problem has not been solved, is not because Greece can’t pay, everyone knows that, it is because Europe is left holding the bag.