UK, Greece & Argentina - let's debate

4 Oct 2011 BBC News
Constantine Papadopoulos is Sec Gen for International Economic Relations.
Mario Blejer is Former Governor of the Central Bank of Argentina.
Norman Lamont is Former British Chancellor of the Exchequer.

Norman Lamont --
The ECB has capital of 5 billion euros. It has advanced money to banks in the Eurozone maybe over 400 billion. It has bought bonds over 100 billion. This is really creating a crisis possibly for the ECB. And who is guaranteeing this? Countries like Italy. Italy is the third largest guarantor of the ECB and of the bailout fund. But Italy couldn't possibly afford to pay these enormous sums of money. So what you have is countries like Italy and Spain guaranteeing a mechanism to bail out themselves. It is simply not credible.


Presenter --
Do you never stop Mr Papadopoulos and look at the mess your country is in. And think borrowing more money to allow us to service the debts to other European banks is doing us no favours? Wouldn't it be better for your people to call a halt to this?


Constantine Papadopoulos --
Of course not. Because if you declare a default it's like committing suicide. Because your banks will be destroyed, your economy will be cut off from the rest of the world. And we are an integral part of the European Union.

Presenter --
Hang on, hang on....Mr Blejer here is living proof that it is not suicide. He was running the central bank, Argentina defaulted, it had to cut its ties to the dollar, it was messy and it was painful but after that Argentina grew nine years in a row!


Constantine Papadopoulos --
Do you know that Argentina's per capita income in 1999 was about 62% of Greece's per capita income? Now in 2011, despite the crisis in Greece it is 38%. Now please explain that to me.


Presenter --
Yeah you could argue that's because Greece has been living in this Eurozone fantasy that it never should have been in in the first place!


Mario Blejer --
We had 4 years of recession before the default. The default did not cause the recession, it was the opposite [Amazing]. We had 4 years of recession starting in 1998. At the end of 4 years we needed to default. As a consequence of the default we did have some problems of course in access to the international capital market but the banks did not collapse.

We had 8 years of growth! I think Greece has benefitted from the Eurozone but they should look at the current situation and recognize it is not possible to service this large magnitude of debt which has accumulated over the years.

We have benefits that Greece does not. We were able to devalue...

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[hkrainman]

All of Europe and America need to wake up! The sobering process will take decades

[optionsupdate]

the guy in athens is a well briefed asshole

[optionsupdate]

what happened to greece debts during this fine period before and after joining eu

[optionsupdate]

youtube search "BBC Jeremy Paxman loses control of Peter Oborne who insults a Euro Official"

[optionsupdate]

why haven't those who favoured UK joinging the euro currency been attacked for their foolishness, Britain had a lucky escape these euro clowns did not get their way.