The Greek Debt Watch is On

German Finance Minister Wolfgang Schäuble warns on Greece.

The current bailout agreement which Greece is operating under expires at the end of the month.  Greek government officials meet today with the banksters to start a new round of talks in Brussels in an attempt to reach a new deal.

Wolfgang Schäuble, the German finance minister, said this morning that he was “very skeptical” about the prospects for an agreement.

Schäuble told German radio on Monday morning he felt “sorry for the Greeks”. This is posturing, perhaps, to set the scene for an eventual deal.

If no deal emerges, Greece would be without an EU financial backstop for the first time since the eurozone crisis began in May 2010. In the long run, this would be a plus for the Greek people, if there was a prudent government in charge that would remove restrictions from the Greek economy and allow it to grow. However, the new Greek government is run by the SYRIZA Party, which is a radical leftist group, who love central planning and love planning using other people's money.

Therefore, the government will likely fall back on its word to get the banksters off the country's back. Most likely, after all the posturing on both sides, a deal will be cut to keep the money flowing that the lefties want so bad. And the Greek people will continue to be squeezed from all directions.

In the unlikely event a deal is not reached, the Greek government would most certainly have to abandon the euro, and return to using the drachma as the country's currency. Again, this would not be a bad thing under a prudent government. Under the lefty radicals, it would be a first step towards hyper-inflation.

 -RW