Moral Hazard
06/21/2011 | | China, Default, econ70.com, Elliot's Brief Blog, Euro, Eurozone, Graphsandlaughs.net, Greek Default, Moral Hazard, US Dollar
Ideally Greece would leave the Euro, default on its debts, and get on with its economic existence. But, leaving the Euro would be a disaster for the Euro zone. So the Europeans won’t let it happen. Neither will the Chinese as they do not want the US Dollar to be the only reserve currency. Since the Greeks know this they have no incentive to financially behave because they know they will get bailout out.