|Philip II the bankrupt - history repeats itself|
Spanish newspaper El Economista writes: Portugal will accept EU financial rescue in the upcoming weeks (in Spanish, found via La Barricada...)
Why not bankrupticy? This is my permanent question.
There is absolutely nothing (other than the trivial impossibility of further borrowing in the short term) that prevents a sovereign state like Portugal from declaring bankruptcy or even a softer version such as a moratorium... until the economy recovers or inflation erases the debt to payable terms.
Because while some indebtedness can be of occasional help, there is a moment when paying the debt back becomes impossible and an undesirable burdern for the nation, specially for the common people. In these cases bankruptcy is surely the way ahead and as such it is formally established for individuals and corporations in the laws of all modern states. After all bankers knew the risks when they made the loans.
And the person or state declaring bankruptcy knows what it means for its credit. But when the burden is too big there is no way around.
Right now Portugal is being forced to borrow at more than 7% interest (when banks get their credit from USA or EU at nearly 0%, please!) and EU is likely to impose conditions of circa 5% (that was the interest imposed to Ireland - let god protect me of my friends...)
Spain is already borrowing at more than 5% and the downgrading of Portugal is not helping, as most Portuguese debt is held by Spanish institutions, private or public. So it is likely that the Bourbon Kingdom will have to declare bankruptcy soon... because there is no rescue package big enough for Spain (and maybe better that way).
And I say maybe better that way because it is about time that a sovereign bankruptcy happens. How can we tolerate that public money is being given away to banks in form of hyper-cheap credits which pay off alone (as they have rates under inflation levels, discouraging investment risks) and instead allow public institutions, specially social services, being undermined by artificially high interest rates driven by the avarice of the minions that the bankster mafia has put in the ECB, the European Commission and even in the various states, including those being robbed of everything under these speculative maneuvers?!
A sovereign bankruptcy, which will happen sooner than later and will probably happen a few months from now in Madrid in fact, a city with a long tradition of such quitter tactics.
Maybe it is some bad karma. So much genocide, inquisition and fascism cannot be good for any spirit.
But sincerely, considering how the ECB and the Fed give away money to banks and do not give it to the states, the only logical thing to do is to put back the ball in their court by openly threatening with bankruptcy, something that should get the global banksters and Angela Merkel veggy negvous.