But perhaps the biggest sin of the lot was effectively to render all credit default swaps (a form of insurance against default) on sovereign debt essentially worthless, or void, by making the Greek default \”voluntary\”.
This has made it impossible to hedge against eurozone sovereign debt purchases, and thereby destroyed the market. Worse, it\’s made investors believe that the euro cannot be trusted, that it\’ll repeatedly find ways of reneging on contract. That\’s the point of no return. This is no longer a serious currency.
Yes, I agree, that\’s about CDS contracts, not taxation or anything like that.
However, it does show what actually happens when you do what you think politically correct, what accords with your view of the spirit of the law, rather than what\’s actually written down there in the law.
No one trusts you not to keep doing what you think politically desirable instead of what\’s actually written down in the law.
And yes, society, the economy, our modern world, do rather depend upon trust.