Posted on May 13 2012 – 7:00 AM – Posted by: Doug Brady
Europe is about to learn there is no Santa Claus.
The China Investment Corp., that nation’s sovereign wealth fund, has stopped buying European government debt, concerned about the region’s financial turmoil. Germany still steadfastly insists that the profligate Greeks must make dramatic spending cuts to rein in their unsustainable deficit and debt.
If last week’s elections are any predictor, not only are Greeks balking, but France, too, is resisting further austerity, calling instead for more government-financed “growth,” oblivious that the deficits and high-risk debt that plague Europe are only aggravated by further borrowing to finance such Keynesian folly.
The 245 billion euro bailout of Greece by the International Monetary Fund and the EU two years ago was the costliest national rescue in history, and that followed Greece’s 100 billion-euro default, the largest-ever sovereign default. Standing in line to get more of the same are Italy, Spain and Portugal. For starters.