Sat May 19th, 2012 at 01:24:35 AM EST
Yesterday, the paper edition of The Guardian had the following story on the front page:
Cost of Greek exit from euro put at $1tn | Business | The Guardian
The British government is making urgent preparations to cope with the fallout of a possible Greek exit from the single currency, after the governor of the Bank of England, Sir Mervyn King, warned that Europe was "tearing itself apart".
Reports from Athens that massive sums of money were being spirited out of the country intensified concern in London about the impact of a splintering of the eurozone on a UK economy that is stuck in double-dip recession. One estimate put the cost to the eurozone of Greece making a disorderly exit from the currency at $1tn, 5% of output.
Officials in the United States are also nervously watching the growing crisis: Barack Obama on Wednesday described it as a "headwind" that could threaten the fragile American recovery.
Only of course, the paper headline was just: $1,000,000,000,000
front-paged by afew
So what is it that we must remember?
1) For all the structural faults in the setup of the Eurozone (and there are many - there are many diaries here too about them) this crisis was a result of the failure of the financial system. Spain in particular shows this, the pressure is all because of the coming debt of the banking system...
This is not a failure of governments - not overspending by the state - it's the rescue of the market system that will cost us so much....
2) That this is a crisis chosen by the EU and particularly the ECB.
When spreads first started widening, swift action could have nipped the crisis in the bud. It would have cost a few hundred million.
And there were multiple points since then, each with a higher price tag when committed action could have ended the crisis. But our leaders chose not to do so. They would rather use this excuse to kill the welfare state.
The harping on "moral hazard" and the whining about "lazy Greeks" - and this reckless application of the Shock Doctrine... that will cost us all much more now...
So most of all we need to remember where the blame lies, because the rest of this year is going to be hell and the propagandist fire will land on lazy Greeks, left-wing SYRZIA and others... but we know now where the blame really lies.
Let us not forget.