From Allister Heath's editorial in CityAM:
The EU is caught between two provisions of its constitution.
Article 125 rules out bail-outs in ordinary circumstances: "The union shall not be liable for or assume the commitments of central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of any Member State".
However, Article 122 provides a loophole: when "a member state is in difficulties or is seriously threatened with severe difficulties caused by natural disasters or exceptional occurrences beyond its control, the council, on a proposal from the commission, may grant, under certain conditions, union financial assistance."
See also here.
Tuesday 9 February 2010
Loophole Of The Week
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3 comments:
The key phrase in Article 122 would seem to be "exceptional occurrences beyond its control". Clearly spending beyond its means was not beyond Greece's control, unless it can be argued that the money crisis was caused by someone else, like the banks, or America.
This is why the Statist corporatists have been blaming the banks rather then themselves for the 'credit crunch (aka running out of someone elses money). By the tortured logic of the EU I bet they manage to blame the 'Markets' for being beyond the control of Greece and bail them out. This is of course utterly stupid as it is the other way about. Greece is being properly disciplined by the markets for being so irresponsible. The markets being the people. Which is an anathema to lefties as they want it that people are the servants of the state rather than the State being the servant of the people.
L, good summary. We need more markets and less state and less corporatism.
Less Stiglitz would be a good start.
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