Finance Minister De Jager: “The Greeks should not have been allowed in the Euro”. Luckily hindsight is always 20/20…!

“That should not have happened” he claims in a speech, held at the Economy Faculty of the Vrije Universiteit in Amsterdam on February 9.

Finance Minister De Jager of The Netherlands is banging the drum on the fact that Greece was wrongfully allowed to enter the Eurozone in 2002. Greece received in 2010 many billions of Euro’s in emergency aid from the other European countries to stay afloat. The country involuntarily gave the starting shot to the formation of an European emergency fund: the Emergency Financial Stability Facility (EFSF).

De Jager: “Greece messed things up; they should never have been allowed to enter the Euro. They rigged the budget figures quite badly and didn’t have a national statistics bureau to audit these figures. The minister could order to rig the statistics himself”.

Greece was one of the founding partners of the Euro and moved over to the administrative, cashless Euro in 1999 and the real Euro in 2002. When this happened, it was already an open secret that the statistical data on the Greek national economy were rigged and could not be relied on.

As truthful as the speech of Jan-Kees De Jager might be, it is the profundity of a pundit with 20/20 hindsight and therefore totally useless.

You have to accept the truth: Greece IS part of the Eurozone and will probably never go out of it. This means the other Euro countries can do two things with this: accept it and try to live with it or leave / blow up the Eurozone.

The fact is: the Euro in itself is a political, fiatbased currency without any intrinsical value. No gold standard, no further backup, other than the trust in the ECB and the strongest European countries: Gernany, France and The Netherlands. If these countries fail, the whole Eurozone will fail! This is the truth and we have to live with it.

The best thing that can happen i.m.o. is that the Euro is guarded by an independent, non-political European Central Bank that has large authorizations to steer and control the financial situation of the membering countries. And this ECB should be prepared to write down on the value of sovereign bonds, instead of financially backing up the countries in distress in order to save the large banks that are holding those sovereign bonds.

If the ECB does not stop throwing good money after bad money and start dealing with the bondholders and the large banks, the Euro might end as a financial house of cards. Everybody in charge should know this and should start acting accordingly.

We can do without the wisdom in hindsight of Finance Minister De Jager

Ernst