Boris Johnson's vote-attracting column in today's Telegraph might get a few knowing nods from the anti-coalition chapter but is this just his love of Rome clouding his vision?
Having read his book comparing the Roman Empire to the EU, I am a bit lost as to where he puts the Greeks in the same scenario being as most modern civilisation, law and sophisticated language in Europe originates from the Greeks. It now seems he has nailed his colours to the mast. Let the devils sink.
The Euro is defunct, the EU fiscal policy is to be shredded and let any country that cannot hold its own whither and die. Heath was a traitor for taking us into the EC, Brown a genius for keeping us out of the Euro. Oh Boris, where do you stand? It's dog eat dog out there, survival of the fittest and one less mouth to feed at the table means more for the rest of us, perhaps?
There is a slight problem with this noble argument. Firstly, should we let Greece fail then they take all that nice money we lent with them down the creek without a paddle. Secondly, where does a bankrupt country go? Do we all pick over the assets and choose which relic we want, how many olives can we carry away, which Greek island becomes ours and do we eat all the moussaka we can? Thirdly, where does it leave the global financial system?
To think that Greece can fall into oblivion peacefully all by itself is naive in the extreme. You play the game of high risk finance in a globalised money market and you pay the price. Now we are into the realm of picking and choosing who we want to cull. We saved our banks who participated in this craziness, now we think we can play God in the world in which we allowed them to participate. Think again.
You see, we could not afford to see Dubai go down - far too many Brits have interests over there. We couldn't let Ireland go down, they represent a large trading partner. We wouldn't let Portugal or Spain go down as we have properties, holidays and wine interests to protect. Italy is far too nice a place as we like their fast cars, low sense of morals, football and fashion. Greece? What have they ever done for us bar a few nice holiday resorts and feta cheese?
So it's a nice vote winner to pick on Greece. Easy target, no one cares if it disappeared off the map.
Or would they? It's a small fact but if Greece went down an estimated 7% of entire EU financial liquidity disappears. Drachmas have no value if they were to start again so who would trade with them? Here's a thought, when you look at the 'Law of Unintended Consequences', when Argentina defaulted on its debt back in 2002, 20% of the Italian pension system went with it meaning hundreds of thousands of Europeans lost their life savings. For the UK, we have around £14bn of lending exposed and £3.4bn of Government debt. Money we can afford to lose?
The resultant aftermath of a major default let alone bankruptcy is the cost of borrowing goes up for others. For the other members of the PIGS (Portugal, Italy, Greece and Spain) this would be disastrous as they would be the next in line to be cut off. But hovering precariously around the edges are countries like the UK. As we battle our own issues, what a lovely idea that we can be cold-hearted to those in a worse position? The way I Iook at it is that that just bumps us one place forward in the queue of countries next to go on the Credit Rating black list. And what joy that would be for us all.
On this subject, France and Greece each have exposure of $79bn to Greece and Germany a further $43bn. For the knock-on PIGS debt, Britain's exposure to PIGS Government debt is actually the largest in Europe. Of all the PIGS countries, the total debt exposure in the banking system is a mere $2.9 trillion, so no worries if there is a domino effect.
So as we sit here pontificating and gloating as the Unions prepare to make our lives hell as we suck in our breath to make our girth fit our financial belt, we are but a few steps away from a similar fate. The Euro was wishful thinking at best but it's way too late to start bleating about it. We live by the sword in financial terms, we die by it. This isn't like a bank failing, there are no insurance schemes, it is the slippery slope into financial gloom.
Beware, Boris, what you wish for.......
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