The past few days were all about Greece, the European Union and the financial system. All kinds of stuff happened that amazed me. Most remarkable was, IMHO, the reflex by politicians to blame the financial markets (and/or banks) that the trade in Greek governments bonds halted. Rating agancies were blamed for putting Greece on the hot seat. Politicians felt that speculants, banks and anyonemore were speculating Euroland to its downfall, which is why new regulation should be designed to counteract such speculative trades.
Let's look at this from a distance. The European politicians decide to introduce the euro and realize this requires fiscal discipline. Yet, the disciplining mechanism (stability pact: a well chosen name) is not being used, nor followed. The euro thus becomes a coin with some loose ends.
Meanwhile, financial markets have seriously realised that all sorts of loans may have counterparty risks (having learnt this the hard way by being too careless with the bus loads of cheap money since 2000). Whether it is a bank or a government that you lend out money too, there is always a counterparty risk. And particularly rating agencies are very eager to demonstrate that they did learn their lessons from the crisis. They won't be caught redhanded by giving out AAA-ratings. No, they now more seriously look at risks than before. And apply that lesson to Greece. Only to be heavily blamed by the politicians for doing so and upsetting the markets.
The conclusion seems clear to me. The current size and maturity of the financial markets does not leave a lot of room for immature politicians who think it is possible to build a European Union without respecting their own basic agreements on budgets. What happens in the financial markets is not so much caused by speculation. It is better to state that it is the direct but delayed result of political inabilities and inaction. The grudge that politicians hold towards speculaters thus returns as a boomerang to hit themselves.
