Photographer: Simon Dawson/Bloomberg
European governments have poured money into Greece since its first rescue was agreed to in April 2010 in a bid to keep the country in the euro and prove that monetary union, a symbol of European post-war integration, is irrevocable.
After receipt of a 7.5 billion-euro tranche in March, Greece now owes other countries more than 80 billion euros in bailout funds. The European Financial Stability Facility said 4.2 billion euros of rescue cash will be disbursed to the nation today.
The ECB also stands to lose much if Greece walks away from its obligations. First, the central bank bought about 50 billion euros of the government’s bonds to push down yields and help the nation retain access to the capital markets.
In addition, the ECB’s so-called Target2 system -- which tallies trade imbalances between the 17 national central banks using the single currency -- indicates that the Bank of Greece owes its counterparts 104 billion euros, according to Whittaker.
Fifteen years ago my friends in France and Germany predicted that something like this would happen.
With Greece in default and Spain next on the list,
I would like to know why the dollar isn't yet at parity with the euro.
Maybe the fact that the US is underwater too, might have something to do with this.
I've been waiting to take a vacation to the UK and France until the euro came down significantly against the dollar. At this rate I might be waiting a long time.
On the other hand, I've heard that hotel prices in the Greek islands are reasonable...