... Gone?

Update to this post.

According to Der Spiegel (D; EN reporting here) the Greek government is contemplating leaving the euro-zone.
Greece's economic problems are massive, with protests against the government being held almost daily. Now Prime Minister George Papandreou apparently feels he has no other option: SPIEGEL ONLINE has obtained information from German government sources knowledgeable of the situation in Athens indicating that Papandreou's government is considering abandoning the euro and reintroducing its own currency.
According to Der Spiegel the EUnion commission is having an emergencey meeting Friday nigh, at Ch√Ęteau de Senningen in Luxembourg. Given the tense situation, the meeting in Luxembourg has been declared highly confidential, with only the euro-zone finance ministers and senior staff members permitted to attend.

Needless to say, Greece leaving the euro would inevitably followed by a restructuring of Greek debt, sending the banking sector in Europe and beyond into a fresh new crisis. Hence, it is no surprise that senior Greek and German officials have denied the report. That didn't avoid a big plunge in the euro, though (p).

More over at Zerohedge here and here. This one will be interesting to watch.

[UPDATE001] Reuters: Will Europe socialize Greek losses?

Socialize? Really? That is what they are calling it now? You and me working the better part of a day to repay the debts run-up by those lazy-ass, 5-hour work-day, tax-dodging leeches, that is social? F.CK YOU!

[UPDATE002] There it is:
Most economists already expect that the euro zone will have to provide Greece with all of its medium and long-term financing next year.
Come hell or high water, you and I will repay the Greek debt.

12 reacties:

Ferdy zei

The Spiegel story is denied by the WSJ, it could be that the Spiegel has its facts straight, but its analyses wrong. Obviously the Greek want to have a stake in the money game, they need dept. relieve. One of the few stakes they have is financial suicide a.k.a. mutual destruction: give us the money or we crash the Eurozone! But to say something like that is not the same as a real option. I mean, this kind of thievery is what starts wars. First cheating other countries with money, then get funded with even more money and then trash those countries finical systems? Wars have started for less.
So unless the Russians are involved, this does not seem very likely scenario. But then again, those EU folks are a bunch of idiots...

Klein Verzet zei

I've read analyses elsewhere that agree with your assessment that this is a Greek bluff, extortion between states. We know the EUrocrats will do anything, anything to keep their precious currency together. So my first bet is the Greeks will succeed (after a fashion). But how do you think this will be received on the streets of London, Berlin or Amsterdam? The love for the EUnion is running thin to begin with. This will not do anything to deepen that love.


As far as I can make out there are three options:


A) Greece backs down from its threats. This will likely come with considerable political (and probably social) consequences back home. I don't think the current Greek government will last for long after a conspicuous climb-down.


B) The Greeks double-down and make good on their threat. This will end the eurozone (in its current form) and will mean a full-blown banking crisis in Europe. We'll have to see how big too-big-to-fail actually is. But we, common citizens will get reamed for the bail-outs that will be handed out.


C) The EUnion folds and compromises with the Greeks, viz-a-vis austerity measures. In essence this will likely mean the EUnion will become a de jure debt transfer union. It will also mean full federalization, since 'economic governance' will have of be set up to arrange this. In the short term this may settle the markets. In the long term the inevitable break-up will be all the more messy and ruinous. That is: If the peoples of member states will swallow this.


Given the talent if the EUnion to turn every crisis into yet another opportunity to grab more power, I think they will opt for some variant of option C. But then: What will Rutte do? What will Cameron do? What will Frau Merkel do?


It comes down to this one single question: Which do our politicians fear the most, the EUnion or the electorate?

Ferdy zei

I guess we already chosen for option C a long time ago. It was also known from the start that the Greek debt was unsustainable, it never was an “if” but always a “when” do we restructure the Greek debt. Obvious the Greek want a restructure and free themselves from their debt chains, the other EU members of course want to delay their freedom, they need maximum control on the Greek spending habits (on paper) of their money.Seen is this light, the ever growing EU power might not even be a deliberate choice, it’s just the logical result of policies that flow from of an political ideal of community if there is none.

Klein Verzet zei

"Seen is this light, the ever growing EU power might not even be a
deliberate choice, it’s just the logical result of policies that flow
from of an political ideal of community if there is none. "


In other words: We're back at the 'beneficial crisis'. The Greeks wanting restructuring is only rational. there is no way they are going to pay years of living frivolously in the way they have. EUrocrats don't want to end the euro. In the twisted way these cretins think, that also makes sense. If you put one and one together, you will end up with option C. Pretty much as you argue


Question is, though: How will the populace respond? And derivative of that: How will national governments respond?

DP111 zei

Whatever the outcome, Greece leaves the Eurozone or stays, we will have to pay for the outcome.

ron zei

Not only Greece, but every member state should pull out of the Euro-Zone. It's a total disaster benefiting no one but the Eurocrats.
Individual EU states must regain their sovereignty and national identity and dismiss the EU, and all that goes with it, as a failed experiment.
It simply isn't working, folks.

DP111 zei

This is also worth reading

Ireland's future depends on breaking free from bailouthttp://www.irishtimes.com/newspaper/opinion/2011/0507/1224296372123.html

Klein Verzet zei

Link doesn't work...

DP111 zei

Link
http://www.irishtimes.com/newspaper/opinion/2011/0507/1224296372123.html

and more here
TRUE FINNS TIMO SOINI IN WSJ ON FUTURE EU POLITICS:
http://tundratabloids.com/2011/05/true-finns-timo-soini-in-wsj-on-future-eu-politics-trust-but-verify.html#more-19404

DP111 zei

The real trouble is that when taxes are raised at a high level, viz the national level, national politicians then have large amounts of money to start throwing money around nationally and internationally, as well not having to account for it. The problem gets even worse, much worse, when taxes start are imposed from the supra-national level, such as the EU.

Switzerland has a much better system. Most of the taxes are raised at the cantonal level. As the canton is small, the amount of money is not as large as if it would be if it was raised at the national level. Cantonal politicians have to spend the money at the cantonal level, as they do not have the power to spend it at the national level or throw it around the world buying influence, or feel-good feelings. Cantonal politicians are reachable, as they possibly live next door, and can be given the heave-ho. The greatest advantage is that they do not have such large amounts of money, so they cannot throw it around.

The Tea party in the US has started to realize the problem, and that is why it is being slagged off by the MSM and big spending federal politicians.

DP111 zei

This crisis would have never risen if politicians did not have access to large amounts of money, which they do when taxes are imposed at the national level.

If they have limited amounts of money, they would not be able to spend like drunken sailors. Banks then would not lend them large amounts of money, as they possible could not pay it back by raising it from a small tax base (cantonal level). Thus both politicians and banks are kept in check - and both operate sensibly, as a normal householder does. This happens not because they are good or wise, but just from the simple fact that they do not have the money to make an impact on the national or supra-national level.

Klein Verzet zei

"This crisis would have never risen if politicians did not have access to
large amounts of money, which they do when taxes are imposed at the
national level. "


The suggestion made by Richard North seems to be a viable, moreover, a eminently sensible one, in that respect. Have us have our say.

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