Tony Blair says it’s up to the Germans to Save the Eurozone and Pay Down that Excessive Debt of Others

Posted by PITHOCRATES - June 24th, 2012

Week in Review

Former British Prime Minister Tony Blair is asking the Germans to pick up the tab for the European sovereign debt crisis.  Even suggested that Britain may still join the currency union.  Once they fix the current problems they’re having (see Blair: To save eurozone, Germany must underwrite debts of struggling members by Associated Press posted 6/24/2012 on The Washington Post).

Former British Prime Minister Tony Blair said Saturday that the euro will only survive if Germany underwrites the debts of the eurozone’s financially struggling members.

He told BBC television that safeguarding the euro would need Berlin to “treat the debts of one as the debts of all,” and debt-wracked nations to carry out reforms which would help restore Europe to competitiveness…

Blair, who is currently envoy to the Quartet of Middle East peacemakers, also insisted that Britain could still choose to join the euro — despite the crisis…

Prime Minister David Cameron, of the rival Conservative Party, has vowed that Britain won’t join the euro during his tenure.

This is the compassionate thing to do.  Except for those getting stuck with the tax bill.  Who have played by the rules and have been responsible.  And their reward for being responsible?  They can now be responsible for other people’s debt.  Somehow that doesn’t sound fair.  Or compassionate.

This doesn’t address the underlying problem in these countries.  Their government spending.  All this will do will give them a reprieve and allow them to borrow more money.  And why wouldn’t they continue their ways?  When they can do just that.  For they have demonstrated they are no fans of austerity.  So it is unlikely that they will cut any spending.  Which means things will only get worse.  Pushing that day of reckoning further down the road.  Making it ever more painful when it finally arrives.  For all the countries instead of just the ones struggling now.

The European social democracies are just getting too costly.  This is the problem.  A lot of this excessive government spending is paying pensions, health care costs and other social benefits.  This is the source of government deficits.  Anything they do to make that debt more manageable won’t matter unless they shrink these deficits.  So they can lower their taxes.  And remove this great burden from the private sector so it can restore Europe to competiveness.


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