Greece does not have its own currency to devalue to gain economic relief. And so the nation's debt problem can't be fixed by issuing more loans with conditions that kill economic growth. If truth be told, there has never been a bailout designed to bail out the Greeks. The aid issued to date has been all about buying time to play musical bondholders.
A Greek crisis cannot be good for the world right now, and we cannot/should not be mute spectators. Here are some reasons why we in Canada in particular, and the rest of the world in general, have to cautiously monitor the current events in Greece, and should try to guide or help Greece get out of the crisis before it becomes contagious. Canada already has internal financial stresses, just like many other countries around the world do, at this moment; this Greek crisis can add to external stress for many countries, and this really is bad timing, and an unwanted occurrence for the world economy.
Just over a year ago, markets went into a tailspin. At that time then-Fed Chairman Bernanke made what was supposed to be a benign announcement that gave new meaning to the word "taper." Currencies were thrust into the mayhem well ahead of the statement becoming action, as markets tried to anticipate the pricing effects of this new monetary regime. Tapering is now well underway; how are currencies weathering the storm?
Polls in Germany today show Dr. Angela Merkel will win the next election, a stunning result despite her steady hand in support of bailing out the deadbeat neighbours in Europe. She is a political phenomenon and the most powerful female in the world. She is a brilliant, but modest PhD in Quantum Chemistry, who, appropriately, leads the world's most modest superpower.
Mitt Romney is touring the UK, Israel, and Poland this week -- but not Canada. Why not? Wait, wait, hear me out: This is not the usual "they forgot Canada again!" lament. The political purpose of Romney's foreign tour was to accuse President Barack Obama of straining relationships with key allies. Right now, the bilateral U.S.-Canada relationship is working very well for both countries. A photo-op of a smiling Mitt Romney wearing a hardhat beside a pipeline in Fort McMurray, Alta., would not help.