Bailing out Greece

So here we go again, talk of bailing out Greece etc. The UK's opposed, except

Euro-zone leaders are attempting to get round objections from countries such as Britain by invoking Article 122 of the Lisbon Treaty, intended to enable a collective response to natural disasters. This does not need unanimous agreement.

So like it or not, make the right decisions, stay out of the Euro, and you still have to pay up. Because that will stop countries making bad decisions in the future. No, it'll mean that we don't learn from our mistakes - that the Eurozone was never one of these "Optimal Currency Zones" that economists have talked about.

But that isn't what annoys me. The bit that says "intended to enable a collective response to natural disasters". Natural disasters. The Greek debt problem is not natural. Even if it's those evil speculators, as the left-wing press seem to be saying, it's not natural - in fact you could say it's even more artificial. It's of their own making - they borrowed too cheaply for too long in the good years, built up a massive budget deficit, are in a lot of debt, and can't afford to borrow because they won't pay it back. That's not natural, that's their fault, and they should pay for it. It's certainly nothing to do with us.

Greece must not be bailed out

There's more and more talk, especially in the European circles, of the possibility of Greece defaulting on her sovereign debts, and because of that she might have to be bailed out.

Let's get to the causes here before we talk solutions - Greece has spend too much. It has, as a member of the eurozone, borrowed far too cheaply, and they've gone from budget surplus to 12.7% deficits (give or take some dodgy accounting).

Clearly then this is an issue of Greece spending too much - and it should cut back - not be funded in its profligacy. Perhaps the public sector workers will go on strike - it's their problem, their governments' irresponsibility. They've got used to too much spending, and have to return to normalcy at some point. If not, they'll go bust - and that will send an even more powerful message.

What does it say to Ireland, whose government has made the necessary cuts and austerity measures in order to avoid bankruptcy? The responsible bailing out the irresponsible? What does it say when the Eurozone actually breaks its own rules in order to save its own skin, just to stop it breaking up?

Economists talk of 'optimal currency areas'; the Eurozone was never one. Countries like Greece have shown that, enjoying German interest rates which overheated their economies. Now they are paying the price - and I don't think it will cause the eurozone to break up, but it would send a powerful message about currency unions - they don't work, except with very similar economies (take the USA).

Thank heavens the UK didn't join.