Slovenia joined the Eurozone in 2007, went on a borrowing binge that
blind bond buyers eagerly made possible, dousing some of its two million
people with riches, creating a real estate bubble that has since burst,
and driving up its external debt by 110%.
And in October, it may go bankrupt, admitted Prime Minister Janez Jansa.Because borrowing binges can last only so long if you can’t print your own money.
The sixth Eurozone country, of seventeen, to need a bailout. But it’s just a speck, compared to Spain, which will strain the bailout funds, and Italy, which is too large to get bailed out.
The other option is the European Central Bank. Its printing press—the one it is not supposed to have—could easily bail out the once blind but now seeing bondholders. As in all bailouts, workers and taxpayers would get a haircut. And in Germany, the debate itself may tear up the Eurozone—just as its economy is tanking.
And in October, it may go bankrupt, admitted Prime Minister Janez Jansa.Because borrowing binges can last only so long if you can’t print your own money.
The sixth Eurozone country, of seventeen, to need a bailout. But it’s just a speck, compared to Spain, which will strain the bailout funds, and Italy, which is too large to get bailed out.
The other option is the European Central Bank. Its printing press—the one it is not supposed to have—could easily bail out the once blind but now seeing bondholders. As in all bailouts, workers and taxpayers would get a haircut. And in Germany, the debate itself may tear up the Eurozone—just as its economy is tanking.
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