On the 11th June, 2009 Lord Mandelson lavished praise on the euro and declaring Britain wanted to join. Six months later one wonders if he of the same opinion. If so the British Gazette would ask; “Just what part of joint and several liability do you not understand ?”
Those seeking to become a “name” at Lloyds are reminded that they are putting up as security all their personal wealth as they are jointly and severally liable for the debts of the syndicate they are joining.
When the Eurozone members signed up to the single currency they undertook to be ultimately jointly and severally liable for each others sovereign debt. These chickens are now coming home to roost. The European Union will shortly instruct Greece to take additional measures by the 15th May to bolster its finances and cut a spiralling deficit. The European Commission’s recommendations include cutting wages and pensions in the public sector. The commission also demand that Greece introduce advance tax payments for the self-employed and an tax on luxury goods in addition to VAT.
Greece has been hit hard on international markets, with bond yields soaring and shares plummeting, after the country’s new Socialist government revealed in October its budget deficit was twice as big as previously announced and more than four times the euro zone ceiling of 3 percent of GDP. Concerns that Athens may not be able to service its debt have put pressure on the euro and raised questions over whether fellow euro-zone member states would come to Greece’s rescue. There are also growing worries that the Greek debt crisis could spill over to other weak members of the currency bloc, such as Spain, Portugal, Ireland and Italy.
Of course they will have to – if they want to keep the Euro in existence. Another solution of course would be to expel Greece from the Eurozone. Politically that would also involve expelling Greece from the E.U.
This of course would cause political instability in Greece and this would spread to the neighbours of Greece.