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Old June 15th, 2010, 8:39 am
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Klio  Female.gif Klio is offline
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Join Date: 08th February 2008
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Re: Crisis in Greece, the Euro Area and the European Union

I understand the idea that governments have to try to live within their means (it's not as if our current government isn't spending hours of every day to tell us this). But there is something more at work than that....

Watching the situation since 2008, too much seems to depend not on normal market mechanisms, but on markets overreacting, or just being plain irrational. The ratings agencies and their decisions seem to push market reaction in overblown panic about certain countries, and the reaction seems to be not just exaggerated, but also counter-productive, withdrawing normal financial activities from countries which need it to get back on their feet. This makes no sense.

We were always told that the markts just regulate everything qite rationally,k but it doesn't look like it! I am not arguing against a normal market economy, but would say that there has to be a way of making these mechanisms work in a way that behaves slightly less like a headless chicken. Not sure how one would do that, but the actions of those apparently unaccountable ratings agencies aren't helping.


I am looking at this with horror, wondering whether the western countries, believing that they'd never be affected, have been inflicting this sort of thing on poorer countries for decades.....


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