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What force? We are not talking about law on a euroepan level. What other force?

Interesting question. Since ECB has threathened to sink the Greek banking systems if the government did not accept killing of their own economy, we know that there are other forces then law at play. Which exactly, are often hard to figure out in time.

Eurointelligence:

Lorenzo Bini-Smaghi, the most prolific campaigner against default, told il Sole24 ore that the ECB had carried out an analysis on the potential impact of a Greek debt restructuring, and found it would imply the failure of a large part of the Greek banking system, as the Greek banks hold a large portion of the Greek sovereign debt. (Another reason is that Greeks would transfer all their deposit to foreign banks, a process that is already partially under way). At the point the Greek banks would no longer have access to ECB liquidity, and would have to end their support for the corporate sector. He said that since Greece does not have a primary balance, a default at this time would lead to the cessation of pension and other social payments. The Greek economy would collapse, with devastating economic and social consequences. He said the other countries should stop pushing Greece into a catastrophe. In what we would understand to be an indirect reference to Wolfgang Schäuble, he said that talk about restructuring had seriously negative effects on market sentiment.

Original Eurointelligence source appears to have been broken, and the Googlecache of it too. But it was quoted on ET on April 15th so probably written shortly before that.

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by A swedish kind of death on Thu Sep 8th, 2011 at 07:18:36 AM EST
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