New York. 24 June 2011.
The markets were hit by stunning news yesterday.
Imagine this: the Europeans decided to bail out Greece.
Wow. Nobody saw that coming.
The market was so impressed that it rallied on the news.
The Dow rallied to end down only 50 points or so in spite of more bad news on the domestic front.
When will Wall Street and the City of London get it?
The euro is here to stay.
Even Greece, Ireland and Portugal welcome the euro.
So do the Germans.
I explained why in a paper 10 years ago (available upon request) which should be revisited by any eurosceptic.
In a nutshell, the euro brings fiscal discipline, monetary discipline and free market reforms.
In the past, Greece would have defaulted, devalued and continued business as usual.
Instead, today, Mr Papandreou has the great fortune to be able to use the European pressure to impose modernisation on his reluctant fellow Greeks.
If only we had such a mechanism at home!
We would not be spending money like a drunken sailor.
We would not be printing money like there is no tomorrow.
And we would stop interfering with market forces.
Come to think of it, this is perhaps why we like to attack the euro.
After manipulating the bond market, the currency, the mortgage market, the car industry, the “clean” energy industry, the banking sector and now the oil price, having the Europeans becoming the standard bearers of the free market is maybe too much to swallow.