The Guardian on the PIIGS:
By the time Black Wednesday was over in September 1992, Soros had reputedly pocketed £1bn and the reputation of the government of John Major for economic competence was in tatters.
Meanwhile, datacharmer at Bluematter gets to the core of the matter:
I’m wondering what the shorters’ game is. As I said before, there is no real possibility of default in an EMU country. In fact, the very notion of an EMU country folding with 120% or even 150% debt to GDP ratio is laughable, not only because it’s very, very easy to fix the situation (the PIIGS governments announce a 5% cut in public sector pay, or a rise of 2% in VAT) but also because healthier EMU countries have a lot to lose by letting the PIIGS go down, both politically and economically. Worst case scenario, Germany says ‘enough’, and the whole thing just blows over.
Playing Moral Hazard games when the House has an unlimited bankroll is for fools.