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Can I borrow some Euros?

 

A Greek man walks into your bank looking to extend his mortgage. He currently owes about 45K. He has a modest salary of 12K per year, but unfortunately, he currently gets through 15K, thus overspending by 3K a year. He keeps promising to tighten his belt, but every time he tries to do so, his loved ones are up in arms. He is looking to extend his mortgage by another 12K taking the total owed to 57K. The question is - do you lend him the money? 

The chances are that he won't get much joy from a typical high street lender. Even the less savoury loan sharks might think twice. He really needs to go on a spending freeze and take on a part time job or two. Even then, it's going to take a long time to repay that mortgage.

The Eurocrats hammering out another bailout deal for Greece, the country, are probably thinking the same thing. Having already bailed out Ireland, and then finding 110Bn Euros down the back of the sofa a year ago, they are trying to think how to magic up a further 120Bn Euros to avoid the Greeks defaulting. Let's hope there's enough left for Portugal, Spain, Italy etc.

Just how much bailing out have we still got left to do? Is there a finite limit to all these Billions that we can find in a worthy cause? I remember when a million was a lot of money. All of a sudden, you don't hear millions any more, everything is billions (unless of course you are talking about the American national debt).

 

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Comments: (2)

A Finextra member
A Finextra member 20 June, 2011, 22:24Be the first to give this comment the thumbs up 0 likes

Where did it all go?  The 64 million, sorry trillion, dollar question.  Some say it was all loans that never got repaid, and the loans were defaulted by little people who went bankrupt?  I don't believe there is that much mortgage funds to make this add up.  Others say that the financial institutions lent money to each other, back and forth, doing deals by the thousand, for millions, each time all taking a cut on the deal-making. The commissions went to the bank accounts of those on the inside and when this ponzi scheme folded, that money is apparently ringfenced and untouchable?

Basically, don't blame the little guys who borrowed more than they could afford, blame the fat cats who lent for lending sake for any reason just to turn a kick back.

That said, the Greeks need to 'revolutionise' and I don't want to pay for it.

 

Martin Bailey
Martin Bailey - Temenos - Hemel Hempstead 27 June, 2011, 17:41Be the first to give this comment the thumbs up 0 likes

Thankfully - it looks like any bailout package will not include the UK (over and above any obligations under the IMF).

Looks like Greece will be OK at least until the next ratings agency decides to downgrade when I guess everyone will need to dig deep again.

Round and round the merrygoround goes.