“The viability of the whole framework - nothing less - is at stake,” wrote former European Central Bank Chief Economist Otmar Issing on the Greece bailout, reported by Bloomberg. “Financial assistance for countries that violated the terms of their participation in EMU would be a major blow for the credibility of the whole framework.”
Mr. Issing believes assisting Greece will set an unexpected precedent leading to the collapse of the European Union. “Such principles do not allow for compromise,” said Mr. Issing. “Once Greece was helped, the dam would be broken.”
“The question is whether monetary union can survive without such a political union,” he said. “The current crisis must be handled in such a way as to produce a positive answer.”
The euro fell against the dollar on Monday hitting nine-month lows.
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