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An epitaph for the €uro May 6, 2010

Posted by Alan Yu in Leadership, Management, Miscellaneous.

Here lies the €uro

A fine dream born of

Lofty ideals

Brought down

By the brutal reality

Of the difference

Between rich and poor

It is sometimes amazing how simple things at a personal level can become such complicated matters when raised to the national level.  Paying for things we can afford is a good example.

What has happened in Greece, at the personal level, is akin to Warren Buffet asking me to join his exclusive club to throw a lavish party.  The bill will come to millions of dollars, and we have to put up our respective share.

Mr Buffet will dip into his billions and easily pay his $1 million dollars share of the bill.  I, on the other hand, have only savings of $100,000, and have to borrow $900,000 just to leave the party.

So what do I do?  I say to Mr Buffet: “Thanks for the invitation, but I really can’t afford to be at your party.  Have a good time.  It’s been nice knowing you.”  I will go home, have a soup and some salad, go to bed early with Milan Kundera’s The Unbearable Lightness of Being and wake up the following morning ready to tackle the world.

Greece, on the other hand, said to Chancellor Gerhard Schröder: “Thanks for the invitation Herr Schröder. We’d love to join the party.  We can’t afford it, but we’ll borrow what we need to pay our share of the bill, and worry about it long after the fun is over.”

Should we be surprised that the party turned out to be a bad dream for Greece?

In the meantime, Mr Papandreou says to Frau Merkel: “It was a lot of fun at the party, but you know we had to borrow to even be there.  Now you have to help us fend off all these loan sharks wanting their money back.  By the way, the loan sharks knew there was no way we could pay them back.”

Should we be surprised that Frau Merkel tells Mr Papandreou to go jump in the lake?

In an article carried by Project Syndicate, Professor Stiglitz at Columbia University suggests that the Eurozone might have to disband if it is not prepared to implement necessary institutional reforms.  In another article Professor Feldstein of Harvard University explains why Greece will default.

The moral of the story: PIGS have no place to be in a rich man’s party.