Surprise surprise - Greece is breaking its word

Much piffle about how further lending gifts by the so called European Central Bank will depend on recipient countries following the ECB's policy prescriptions. Evidently Berlusconi's second speech about plans for the Italian economy was eerily similar to measures set out in a letter from the ECB which has subsequently emerged.

Will the electorates of debtor nations accept big dollops of austerity from foreign commissioners? Of course not. Will the taxpayers in the German group be willing to keep lending giving money to featherbedded economies? We keep being told they won't, but what signs have we seen of a serious backlash?

Even France is now saying that they really are going to stop borrowing more fairly soon, honestly. France hasn't had a balanced budget for over three decades.

Meanwhile, Greece's state budget deficit in the seven months to July 2011 widened 24.6% from a year earlier.

The Finance Ministry said that the cumulative state budget deficit rose to €15.51 billion in first seven months of the year—compared with €12.45 billion a year earlier, while net budget revenues fell 6.4%, budget expenditures jumped 7.1%.

What more evidence does anyone need that Greece's euro membership is doomed?

Presumably Sarkozy wants to string this out as long as possible because of the huge amounts of Greek sovereign debt held by French banks.

But default and devaluation will have to happen.