Friday, February 10, 2012

Greece "could do without the German boot"

Kicking someone while they are down may end up backfiring. And Greece is now definitely on its back and being kicked.
Reuters: Suspicious Eurogroup ministers gave Athens six days to prove its commitment by passing key legislation, finding an extra 325 million euros in savings, and providing assurances that the program will remain in force after the election.
Is this really about 325 million euros in savings? Is this worth the risks associated with the disastrous  euro exit by Greece?

By Thanassis Stavrakis, AP
The pedantic Eurozone leadership is not helping their cause with statements like these:
Reuters: German Finance Minister Wolfgang Schaeuble told conservative lawmakers on Friday that existing Greek reform pledges would not bring its debt down to levels that are considered sustainable...
"Schaeuble said the current plans would leave Greece short of the goal of cutting debt to 120 percent of GDP by 2020," one conservative source said.
The Greek response was swift.
Bloomberg: “What has particularly bothered me is the humiliation of the country,” Karatzaferis, whose Laos party has 16 members in the 300-seat parliament, said in televised comments. “Clearly Greece can’t and shouldn’t do without the European Union but it could do without the German boot.”
Asking for additional concessions, beyond the draconian proposal on the table (pledge to sell assets such as ports, airport, state oil firm, cut minimum wage by 20%, consolidate pensions, cut "medicare", implement labor reforms, etc.), is equivalent to squeezing blood out of stone at this stage. It's also insulting to the Greek people. The Eurozone leadership is playing dangerous politics without an understanding or a will to admit the full repercussions of a Greek exit from the euro.

In such an event the bulk of the nation's banks and corporations - all with euro liabilities - will  default. Food and fuel will become scarce with hunger and social unrest reaching proportions unseen in Europe for generations. This is not going to be a bunch of anarchists marching on the Greek parliament building - the bulk of the population will join the unrest.

The Greek people may actually direct their anger at the EU institutions instead of their historically irresponsible and corrupt governments that over the years brought the nation to its knees. If such events were isolated to Greece, it could potentially be manageable, given the size of that nation. But the anti-Eurozone and particularly anti-Germany fervor could easily spread to other Eurozone periphery countries. And that will definitely not be about the additional 325 million euros in the Greek budget.
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