According to the financial press, the European Union loans to Mediterranean countries has soared to over a trillion euros. We can safely say that we are in 'toxic' territory. Apart from Greece, Spain, Portugal and Italy, we need to add Ireland. None of these nations has a cat in hell's chance of repaying their debts; so what happens to this 'black hole'?
It is reported that Britain is holding a high proportion of the debt. Perhaps it is time that taxpayer GB is informed of the collateral, by way of water tight guarantees, which will ensure repayment over a given period of time. Otherwise, how can the nations underwriting these debts possibly make any plans for the future.
The outcome will naturally be much different, as the loans in many cases are probably only promises. This doesn't appear to stop the ongoing process of even more borrowing, with little or no hope of repayment, ever.
SUCH 'BLACK HOLES' TEND NOT TO GO AWAY.
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