Today's Coming Crisis Movie

Sunday, June 19, 2011

Boris Johnson: let Greece go bankrupt and leave the euro

Britain should refuse to contribute to a second bail-out of Greece and the country should be allowed to default on its debts and leave the euro, Boris Johnson has said.

Writing in The Daily Telegraph, the Mayor of London claims that the euro's recent troubles have "exacerbated" the financial crisis and challenges George Osborne, the Chancellor, to "stop chucking good money after bad".

As Mr Osborne prepares to join European talks on agreeing a new £100 billion rescue package for Greece today, Mr Johnson says that European monetary union should be partially dismantled instead.

Ministers have promised not to underwrite the new deal, but the Government may be powerless to avoid involvement under European finance rules.

Mr Johnson joins a growing list of economists saying that Greece should be left to go bankrupt and write off many of its debts. This would probably involve it leaving the euro, or the credibility of the single currency would be undermined.

The London mayor writes: "For years, European governments have been saying that it would be insane and inconceivable for a country to leave the euro. But this second option is now all but inevitable, and the sooner it happens the better." (read more)