Wednesday 13 December 2017

David McWilliams: Illusion of Greek bailout is Europe's dirty little secret

David McWilliams

David McWilliams

Sigmund Freud once noted that: "Illusions commend themselves to us because they save us pain and allow us to enjoy pleasure instead. We must therefore accept it without complaint when they sometimes collide with a bit of reality against which they are dashed to pieces."

Europe and the EU are soon to go through one of those 'collisions with reality'. The reality of the latest deal in Greece is that it drives the Greeks deeper into the mire and as the economy there contracts yet more, the wheels of this deal will fall off.

Before we go into what the deal means for us, let's examine the latest illusion. Last year the illusion was that 'austerity creates growth'. The 6pc contraction in the Greek economy in the final quarter put paid to that canard. As does our rising insolvency and mortgage arrears data here.

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