“They throw good money after bad money”

Johan Norberg is a Swedish classical liberal thinker and a freelance writer as well as the author of several books. Recently, he has been active in the debate over Europe’s economic crisis. Utrikesperspektiv met him to ask about the crisis in Europe and the banking system.

What is the biggest problem in terms of Eurocrisis today?

The problem is that three countries are bankrupt and two can’t borrow and the Southern European banking system has collapsed. Everybody is on life-support from other governments and the European Central Banks. And in the long run that will not work. The only result is that they throw good money after bad money and undermine their own financial situation. And now we are all in this together. The governments are in a bad situation, and then, so are then banks, because they lent the money. And then governments look even worse, because they might have to support those bankrupt banks, and so on. It’s a very negative spiral.