Previously I wrote about how hedge fund speculators had used the EU to extract billions from the taxpayers of Ireland. Now, while it's true that the Greeks have been running up debts like drunken sailors, do the tribulations of little Greece really threaten the entire European economy? As in the Irish case, the banks, governments, and financial commentators say "yes", but can one see an alternative explanation for the noise that makes a little more sense?
Greece owes a lot of money, but on a European scale it is not that awesomely huge. Moreover, it is not likely that Greece would just utterly renounce its debts and not pay a dime on them, so the realistic amount at risk is much, much lower. But what happens when the banks, commentators, and other experts harp on about the likelihood of a Greek bond default? Bond holders sell at big discounts. There is someone on the other side of each one of those trades. Guess who? The rich speculators who buy the bonds are, at the same time that they are badmouthing the bonds and getting people to sell, preparing the stage for governments, using taxpayer money, to provide guarantees that the buyers of the bonds will get full face value and full face interest, "to preserve European economic stability." But the buyers of those bonds are taking a known risk - that's why they buy for a big discount. If governments take that risk away, then we are giving the speculators free money for helping to destabilize the system in the first place as they badmouth the bonds.
Now, one alternative response would be to back the bonds by guaranteeing that the current owners get back what they paid (i.e. the heavily discounted price) and an interest rate suitable to a guaranteed instrument. Then they lose nothing, but they don't make an unjustified profit, either. But they should not just be guaranteed this amount. They should be restricted to it. This would give Greece some relief and a chance to try to recover (by, among other things, actually requiring the wealthy tax cheats there to pay their proper taxes), nobody would be hurt beyond the people who already got hurt when they dumped their bonds at a discount (and if they bought bonds from over-leveraged Greece in the first place we need not cry for them), and things could move back towards normalcy. However, you won't see that being proposed by the commentators or governments. You will just hear continued fear mongering, calls for bailouts and guarantees, and plans to take the speculator profits out of the hides of ordinary, responsible depositors and people who pay their taxes.