Thursday, March 1, 2012

Oil will not last forever

Germany has 10x the GDP of Greece, and half the ratio of debt to GDP. One easy way to save Greece is for Germany to take out $300bil in loans at its low interest rate, buy up all of Greece's debt, and allow Greece to refinance its debt to slightly above what German debt costs.
The Greek economy would be relieved of its crushing debt burden, the EU would be saved (even strengthened), and Germany would actually make a small profit on the deal.
Alternatively, we could drag out this crisis for another decade as Greece relies on Germany for bailout after bailout to finance debt that it cannot afford. Or we could just let Greece default, markets collapse, and the EU dissolve.