In a televised address to his cabinet, George Papandreou, Greek prime minister, said that the EuroZone is treating Greece like a “a laboratory animal in the battle between Europe and the markets."
He also said that the European Union was creating a “psychology of looming collapse.”
This does sound like the angry bark of a caged animal. But who is really scared by a caged animal?
Greece is in a box (cage?) and comments like these are not going to cause the EU to rush to help.
As FT points out:
Germany is insisting Athens bears initial responsibility for restoring confidence in Greece. Angela Merkel, German chancellor, resisted French efforts to come up with an explicit bail-out package at Thursday’s summit of EU leaders in Brussels...Ms Merkel’s tough stance has overwhelming political and popular support in Germany.The German man on the street has no interest in bailing out Greece.
Papandreou better shut up with his "the EuroZone owes me" nonsense, and start mouthing pretty nothings about bringing the Greek budget under control. Though only God knows how he will be able to do this since most Greek government workers are ready to strike on even talk about a budget under control. But, if he continues with his "the EuroZone owes me" stuff," German officials may actually wake up and realize that they can bailout the German banks that own Greek debt for a much cheaper price by doing it directly rather than attempting to bailout the caged Greeks.
True, but why would they want to do either. Wasted debt doesn't go away by diverting good money to keep it afloat. Someone's gotta lose, and it it will be the creditor, not the debtor, if default is allowed. Bailouts don't help the debtor, they keep him in debt by continuing debt service and preventing default. The losers in a default will be Europe's bankers and Greece's public sector, from the description you give. The winners would be the Greek people, assuming the nation's assets aren't turned over to the creditors.
ReplyDeleteGovernment's really shouldn't be allowed to borrow outside their own currency, since the people will just repudiate the debt once it becomes too burdensome. Then there is the spectre of military conflict, when a people throw out the old government and form a new one which nationalizes it's property and repudiates the collateral obligations of the former government's debt. If a government wants to run up debts, let it do so with it's own currency and let a people decide how much theft they're willing to tolerate in the form of taxes and inflation. At least then the violence can be contained inside a country's own borders, if the need for violence arises. But I guess it's not in the interests of the Eurozone and US financial elites to deny to themselves the right to impose debt bondage and asset stripping upon other countries, so my statement doesn't really get at the real dynamics of the issue. If it was up to the victims, it wouldn't be a problem cause it wouldn't occur.
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