A major topic for discussion for a while now has been the debt crisis that Europe is facing. Indeed it is a very serious situation that threatens to bankrupt all of Europe. Right now all the countries involved are meeting and conducting talks on how to deal with this situation. Personally I am of the opinion that what is happening is that someone needs to pay for the debt, but no one is willing to pay it. As a result the whole idea of this European unity is crumbling. The European Union was created on the idea that everyone was supposed to help each other, (and challenge US hegemonic power), but we’re talking about a series of capitalist countries. People whose whole mantra is to compete acting in co-operation.
A very strange development has taken place in the whole debt crisis situation. Germany has reported that it has over estimated its debt load. What Germany has is a “bad bank” where all toxic assets have been shifted and their cost has been calculated. The German government is reporting that they have made an accounting error that caused them to over estimate their debt by €55.5 billion. Which is one hell of a miscalculation. That means Germany’s overall indebtedness is now down to 81% from 84% of their GDP.
In a related development, Irish Prime Minister Enda Kenny has announced that they too have found an accounting error, at it housing agency, that has caused them to over estimate their national debt to be €3.6 billion higher than it actually is. This has caused Ireland’s debt load to decrease two percentage points.
Now this is just me, and this is just speculation my part, but I get the feeling that something strange is going on here. Don’t get me wrong, I think these could just be a coincidence, but I just feel so suspicious because of the magnitude of the situation. It has to be overwhelmingly tempting for people who gamble markets and who cooked books for a living to cook them one more time to help get them out of this mess.
Also I can see another possible motive to doing this. By decreasing the amount of money owing you would increase the public’s perception of the debt, thereby increasing the investor opinion of the situation. An improved investor climate would make any such recovery much easier to accomplish. So there might be chance that this is intended to help the market by making the problem see like its not as bad as it is. Because the market is much like a religion, in that it only has power so long as you believe in it. If people think the market is good, they’ll invest making it good. If people think it is bad, they won’t invest and it will be bad.
But I am just hypothesizing on why countries might be lying about their debt. If they are even lying at all. I am merely speculating this because I personally find it suspicious.