CNBC
19 Νοεμβρίου 2010
When European Union (EU) leaders provided a bailout for Greece last May, they no doubt "did the right thing." But in the process, their temporary response not only broke at least the spirit of the EU Treaty, but also set themselves up for the future challenge of reining in moral hazard on a permanent basis in what some now deride as Europe's "Bail-out Union."
The tough conditions attached to the IMF's rescue were clearly bitter medicine for Athens and they will likely be even more painful for the much richer Ireland shortly, but they are nonetheless not sufficient to prevent future political opportunism from undermining them.
Future versions of Andreas Papandreou, the Greek socialist leader who dominated the country's politics in the 1980s and 1990s, may emerge not only in Greece but in other parts of Europe, run their countries into the ditch and then resign and move to Monaco, leaving it to the EU and IMF and future generations to pick up the pieces.
The EU, therefore, needs before-the-fact prevention on moral hazard in addition to after-the-fact treatment.
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