The currency of a country whose central bank has suffered a mortal blow has little chance of survival. Athens understands this very well and takes advantage of it. Why should Europe give to Greek politicians, who clearly have shown no intention of introducing reforms worthy of the name, a weapon that can be turned against her? We must protect the ECB, and now. ... Putting larger amounts into the European Stability Mechanism (MES), the permanent relief fund [to come into force July 1], will on the contrary save money. And committing more money to protect the ECB would, for the same reasons, also save money. This is what is called "promising to increase spending," but that does not mean that the money will actually be spent. ... European policymakers cannot afford the risk that Greece, feeling that it is about to excluded from the euro, will launch a final attack like a dying bee and default. They must protect the ECB from what could be a fatal sting.
...
Putting larger amounts into the European Stability Mechanism (MES), the permanent relief fund [to come into force July 1], will on the contrary save money. And committing more money to protect the ECB would, for the same reasons, also save money. This is what is called "promising to increase spending," but that does not mean that the money will actually be spent.
European policymakers cannot afford the risk that Greece, feeling that it is about to excluded from the euro, will launch a final attack like a dying bee and default. They must protect the ECB from what could be a fatal sting.
Because the ECB is not solvent by fiat in its own currency. tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker
