Mario Soares: Portugal will never be able to pay its debts
THE Grand Old Man of Portuguese politics, too. Mario Soares says:
“Portugal will never be able to pay its debts, however much it impoverishes itself. If you can’t pay, the only solution is not to pay. When Argentina was in crisis it didn’t pay. Did anything happen? No, nothing happened,” he told Antena 1.
It’s not quite true that nothing happened in Argentina. It’s also not quite true that Argentina is the best example to use: for the did very much cock up what they did after the default. However, the basic point is well made.
When someone’s bust they’re bust. Whether it’s an individual, a company or a country. There’s just no point in trying to squeeze blood from a stone. If they cannot pay back their debts then they cannot pay back their debts. And that’s just it.
So, the solution is to agree, yup, can’t pay it back. So, we’ll have to come to some sort of a deal. Those who lent them money will lose some portion of the money they lent. That’s just what has to happen. There is no other way out of these things.
And the real point is that Argentina isn’t the only example. There have been some 800 sovereign defaults over the centuries. Life has gone on in all of the places where they happened. Those who lost money took their losses and again, life went on. It’s not always nice of course: but the flip side of making money by lending is that sometimes you lose by lending.
Portugal should default on its sovereign debt. And even more, it should do so simply by leaving the euro, declaring the new escudo and allowing it to depreciate. And, how to put this gently, fuck the EU and the ambitions for a European superstate.