Unnoticed by the human race, the men and women of Mars had developed a
huge economy over the last decades. They were working, working and working;
producing, producing and producing; and exporting, exporting and exporting.
Exporting to Greece & Co.
As payment for their exports, they accepted sovereign bonds denominated
in Euros. Since they had no use for those Euros on Mars, they lent them to Greece &
Co. The men and women of Mars had become savers and they also thought that they
had become rich.
One day, the Martian banking system started fearing that all those
sovereign bonds might default. The Martian government sent an urgent message to
the EU Commission telling them to urgently bail out Greece & Co. so that a
collapse of the Martian banking system could be avoided. The EU Commission
replied post haste:
“That seems to be your problem and not ours”.
The Martians threatened to drive Greece & Co. into default; expel them
from all international financial transactions and, essentially, run their
economies into the ground. The EU Commission replied, more slowly this time:
“Do what you think is right and what you can be responsible for. Don’t
worry about the economies of Greece & Co. We will keep them alive by
financing their ongoing needs as a preferred creditor”.
At this point, the Martians realized that they had to act like beggars.
They politely requested the EU Commission to bail out the Martian banking
sector. The EU Commission replied, again with some delay:
“Ok; we’ll do that. Here are the terms: 99% ownership of the banks and
total control over management and business policies. The right to sell off the
banks after they have been restructured to anyone of our choosing”.
The first thing the new owners of the Martian banking sector did was to
forgive Greece & Co. all their sovereign debt. And the next thing was to
work out economic restructuring plans for Greece & Co. as the condition to
finance those countries’ ongoing financing needs.
All shareholders of all Martian banks were wiped out. Even all of their
bondholders were wiped out. This on the grounds that they were considered as “professional
market participants” and should have known what risks they were taking. Luckily
for regular Martian savers, a solution was found where regular savers did not
lose any money.
And the Greeks pay all their taxes - yes
ReplyDeleteTax Evasion Across Industries: Soft Credit Evidence from Greece
It seems to me that there is a flaw in this story: If it is assumed that the Martians have developed an advanced civilisation, they would probably not have accepted worthless paper as payment, and the would not have trusted the institutions of the EU.
ReplyDeleteBecause they would not have had use for the Euros on Mars, the Martians would have had no alternative but to recycle those Euros in Euroland.
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