Greece has voted to stay in Europe, but domino effect still threatens Europe: Tim Mansfield

The Greeks have narrowly voted in a pro-bailout party that wants to stay with Europe by accepting the harshest possible economic conditions for years to come, rather than getting out and starting again on their own.

The European debt crisis over the past few months reminds me of the story of the Dutch boy who put his finger in a hole to stop a leak in a dyke. He was lucky because eventually some passers-by helped him and fixed the leak. If they hadn’t found him the dyke would have burst.

And the situation reminds me too of events leading up to the Wall Street crash that lead to the Great Depression. Financiers managed to reverse the downward plunge by buying as many shares of stock as they could, but the house of cards came crashing down as people panicked in October 1929.

In this case the European solution has been cash bailouts and buying government bonds. But buying bonds is just the same things as increasing debt. Someone eventually has to pay it back.

Where has it all gone wrong, we ask ourselves. In Ireland, Portugal, Spain and now Greece the same thing has happened. Countries are like dominoes collapsing one by one.

Do we blame the banks for their profit-taking over the years, or their customers who took advantage of easy loans to live lives they couldn’t afford?