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It is clear that this whole "rescue" mess is simply a way to transfer the losses to the public sector.

Under a default scenario the creditor countries still have to pick up the losses of their banks, so this is just a different way of achieving the same effect, just delayed so well-connected people have time to liquidate their positions...

Economics is politics by other means

by Carrie (migeru at eurotrib dot com) on Mon May 9th, 2011 at 09:35:35 AM EST
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And to hide the rescue from their publics.

Remember, the original sin here is depressing German wages in the name of competitiveness. Telling the German people that they have to bail out the German banks because they lent the money that should have been paid to them to cowboy banks is unlikely to do anyone's political career any good. I'm guessing German workers would have been much happier if it was them rather than Irish bankers who were buying the Mercedes.

by Colman (colman at eurotrib.com) on Mon May 9th, 2011 at 09:39:54 AM EST
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Right - the German government can now tell the gullible German public that the trouble is the reckless spending of Irish and Greeks, not the need to bail out a failed German banking industry.
by rootless2 on Mon May 9th, 2011 at 09:54:13 AM EST
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Take it from the German SPD: it's all been "crass keynesianism"...

Economics is politics by other means
by Carrie (migeru at eurotrib dot com) on Mon May 9th, 2011 at 11:36:27 AM EST
[ Parent ]

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