“Greece has to be bankrupt” - investment advisor
Diplomats at an EU summit in Brussels say Germany has backed away from its strong opposition towards bailing out Greece, which had sent the common currency to a ten month low against the dollar.
The agreement, hammered out between Chancellor Angela Merkel and French President Nicolas Sarkozy, would allow Eurozone countries to offer Greece bilateral loans.
The International Monetary Fund would also be involved, providing additional support in exchange for fiscal reforms in Athens.
The EU diplomats have agreed to a $30 billion bailout plan.
It would only be activated if market lending to the country dried up. EU President Herman Van Rompuy said it should be seen as a last resort.
In addition to the debt crisis in Greece, there are fears for Portugal after its credit rating was downgraded.
But as investment adviser Jim Rogers says, bailing out Greece or any other country would do more harm than good.
"Why should hard-working Germans and hard-working Dutch come to the rescue of the people who have been spending money they don't have and lying about it for years?" Rogers told RT.
Martin Hennecke, an associate director with the Hong Kong based Tyche group, says as interest rate pressure rises and interest rates go up, the countries’ budget deficits will get a lot worse, and there will possibly be a vicious circle.
“The US is over 11 per cent in the budget deficit, the UK is 12.7 per cent – about the same as Greece – and then in Europe, most of the countries, even France, are at 8 per cent budget deficit of GDP and normally 3 per cent is the maximum considered sustainable. So, the crisis is not going to be fixed with Greece bailout,” he said.
Meanwhile, William Engdahl, author of "Full Spectrum Dominance", says the roots of the euro's crisis lie in the US.
“Wall Street is really behind this whole Greek crisis from the beginning. Moody’s Rating Service – most people are unaware of this, but the world’s premier credit rating service that made the credit downgrade of Greece at the end of last year, it started this whole crisis,” William Engdahl said.
“The guards of money – Goldman Sachs, JP Morgan Chase, Citigroup, Morgan Stanley – what they want with this situation with Greece is to have a rolling crisis in ‘euro land’ that takes the focus away from the weakness of the dollar,” he added.