Brendan Keenan: Greece really needs the euro
Countries with big debt problems have every reason to stay the course with the currency
Published 21/02/2010 | 05:00
THEY reckon it is one of the great headlines of all time. When President Gerald Ford refused to bail out New York City, whose lenders had lost patience with its profligate ways, the New York Daily News ran the banner: "Ford to City -- Drop Dead!"
Mr Ford later relented. Even for a sovereign state like the US, there are unpleasant -- and, worse, unknown -- consequences from letting a region default on its debts. Even more so for a collective entity like the euro area in deciding what to do about Greece, and perhaps others.
But at least Ford had sent out a message -- that it was possible that you could lose money lending even to New York City; and that it was possible the cops would not get paid one day if the city did not manage its affairs properly.