OUG *true default* has not yet taken place.
Pericles all quite true.
However the safety net under Europe is flimsy, it will stand no tests.
I agree we will not be better served by such changes as you highlight.
But suspect you like me, understand we have no say in the matter .
Greece will leave the Euro, harsh and even extreme, but they too will have no choice.
The Gross national product, the debt level, the interest rates they must pay, are only some of the reason.
Germany has both gained wealth and propped up others debt.
It has to insulate its self from the coming fall.
As the new government settles in, that may not be possible, as people see the increasing pain.
Greece will default.

I think you’re right Belly – Greece will default some day and it will have some wide reaching consequences.

I saw an interesting fragment of a show on the telly the other night that was trying to explain how the EU got into this mess & it seemed to make sense. There were a few different elements:

1. The Maastricht Treaty set rules for entry but these rules were bent or broken. For example, Italy had too much debt vs GDP so they did a fiddle with some forward notes and presto they were in (it was thought that there would have been no Euorzone without Italy).

2. Once formed, some countries (like Greece) who previously had a lower credit rating on their pat now had access to cheap debt and they went to town on a borrowing spree.

3. Now that (almost) everyone is working off the same currency they must essentially compete on an equal footing. Sounds fair but if a single entity (like Greece) starts to struggle, they do not have the opportunity to devalue their currency and hence make their exports more attractive price-wise (while maintaining domestic wage parity).

4. Some commentators thought that having such an intimate economic alliance (ie. a common currency) without having mutual governance was fundamentally flawed. The diversity of laws, customs, social and economic structure across the member nations made this unlikely but profoundly at odds with the Eurozone concept.

Some people might say the last point means that the EU / Eurozone is just the first step in Germany’s quest to take over all of Europe and rule it as a single power. Maybe, but I think you’ll find that Germany is not really happy having to bail out the rest of Europe now after spending 20 years sorting out the mess they inherited when they re-merged with East Germany. They are prosperous because they are hard-workers who value quality and fiscal restraint and rather than enjoying the fruits of their labours, they are paying for the ineptitude of others.

Come to think of it, that sounds uncomfortably familiar.

Peter it is true some believe, even conspiracy theorists, Germany wants to/or will rule the whole one day.
I get no joy in saying it would please many, not the nations set to die.
This morning news has it the one hundred billion Euro bail out sees Spain need sixty four billion of it!
The implications of one failing are massive.
And in truth who knows what our own banks may be exposed to.
The American Scam/Fraud derivatives trading, hurt quite a lot of under informed or not at all informed Australians.
Greece will too.
Surely however the pain will see changes for the better?
Greed has no boundary's however.

Peter Mac.
There was one additional point that you may have forgotten.
I also saw that BBC documentary.
After Greece was in the Euro area it had a debt to GDP ratio that was
outside the rules. Goldman Sachs arranged to fiddle some money shifts
with the Greek treasury that hid the shortfall.
The rest of the Euro zone was unaware of the fiddle going on.
It only came to light when the three Euro finance organisations went
to Greece to see why they were in such trouble.

So it easy to see why Germany & France are not keen to give them more money.

bailout for 'greece'
isnt bailing greece out
it bails out..only the german banks

there is a saying

if you owe the bank..a million..you got a problem
if you owe the bank billions..they got the problem

whatever bailout of the bankers you hear of
is just to bailout other bankers

so business bailing out business
the clever thing is how its being done through govt
so their debt falls on you..just as its the workers pensions ..capitalisng the borrowing

whenever you hear bailout
remember whats being bailed out[money from your purse..into some banker..

who leverage your deposit..real cash..
into 8 times more..'on tic/in credit...[debt]
banks dont lend you anything..but what your deposit created

govt/the peepole.. should have that power[it used to]
till bankers got so clever..they not only took the leveraged[fractional reserve lending]..but actually lend govt its own money

Bazz that too is quite right, fraud has played a big role in the whole GFC.
Greed even bigger, if we ran our home budgets, and far too many do, like these country's we would be in real trouble, and some are.
Credit used well, is the very life blood of commerce and productivity, as long as the use is wise and remains linked to ability and intention to re pay.
Ireland grew massively on cash it did not own, and even now may fall more, Spain if it fell could drag the lot down.
Greece would not hurt as much but may start a landslide.
Australians are stuck mid stream, in no danger we can see or even think of, but haveing two years ago, got off the spending train?
We or most of us bank much more now or pay debt, but not every one, homes are still massively over valued, and over engineered.
I just can not see our world, western part of it, continuing to over consume without harm.
And Europe has 26% unemployment in places that is frightening.