Greece should be allowed to default on its debts, go bankrupt and exit the euro, said Boris Johnson, the Mayor of London, amidst growing weariness in Europe over Greece’s continuing financial woes.
Writing in the British Daily Telegraph newspaper, Johnson also said that Britain should not even consider contributing to another bailout of the beleaguered Athens government.
Johnson warned that the deepening problems of the euro has worsened the financial crisis and urged George Osborne, the UK’s Chancellor of the Exchequer, to stop chucking good money after bad.
For years, European governments have been saying that it would be insane and inconceivable for a country to leave the euro,” Johnson wrote.
“But this second option is now all but inevitable, and the sooner it happens the better.
Johnson suggests that Greece should find new economic identity with a new drachma.
He added: The euro has exacerbated the financial crisis by encouraging some countries to behave as recklessly as the banks themselves. We are supposedly engaging in this bail-out system to protect the banks, including our own. But as long as there is the fear of default, as long as the uncertainty continues, confidence will not return across the whole of Europe.
The Mayor’s comments precede a meeting in Europe over a proposal to provide Greece with a new £100-billion rescue program.
Others are equally skeptical about Greece.
Douglas McWilliams, chief executive of the Centre of Economics and Business Research, said: Sooner or later both the Greek population and international creditors will tire of fighting a losing battle, leading to a break-up of the currency union as Greece pulls out, probably followed by other countries.”
Similarly, the leader of the UK Independence Party Nigel Farage, warned: The UK is a contributor to the IMF, so already UK money is being used indirectly to bail out Greece. In terms of throwing more money at the problem, how can the government expect British taxpayers to put up with that when at home they are enduring pay freezes or job losses?”
Farage added: A fresh bailout for Greece should not involve the UK. Repeated transfusions will not resuscitate a corpse and the euro is dead.
However, at least one prominent British politician has assailed Johnson’s comments.
Former Labour Europe Minister Denis MacShane called the Mayor’s remarks as frivolous, flippant and irresponsible.
For a nation to go bankrupt would condemn its people to a long period of distress and misery, which would only create further immigration flows as Greek workers are forced to get on their bikes and seek employment elsewhere, he told media.
If you want 100,000 Greeks pitching up here looking for jobs that is exactly the kind of silly language you would use. If your neighbor's house is on fire, you don't refuse to lend it a hosepipe.”