In theory, Europe's leaders created the temporary euro rescue fund, the European
Financial Stability Facility (EFSF) and its successor, the European Stability
Mechanism (ESM), both headed by Germans (though some have different citizenships
but the same origin) precisely to support countries facing financial
bottlenecks. But providing more help for Greece would be a very tough sell for
Europe's politicians. Chancellor Angela Merkel would have to get the consent of
the German parliament, the Bundestag, which could prove tricky. And Merkel's
junior coalition partner, the conservative Bavarian Christian Social Union
(CSU), has been adopting an increasing shrill tone against Greece lately --
meaning that the government could plunge into crisis if the chancellor supports
more aid for Athens. For some weeks now, it has been clear that the Greeks
would run out of money this summer. And there is no emergency backup plan in
place. Everyone has instead counted on the ECB. For his part, ECB chief Mario
Draghi seems to have accepted this and allowed the leaders of the euro-zone
countries to force him into the role of the pragmatic emergency helper. ... For
now, the priority for Greece is to keep its head above water until it receives
its next planned bailout payment. The troika overseeing Greece's aid package,
comprised of the European Commission, the ECB and the International Monetary
Fund (IMF) and headed by Horst Reichenbach, The German Governor of Greece is
expected to decide on the payment of the next tranche of €31 billion in
September. In terms of communication, it appears that the troika is already
trying to pave the path for a "yes" on the tranche payout. Recently, it gave
unexpected praise for an agreement that would see Greece introduce additional
austerity measures worth €11.5 billion in 2013 and 2014. "Talks went well, we
made good progress," the IMF's mission chief for Greece, Poul Thomsen, told
reporters. And the troika has stated that progress has been made with Greece's
plans to privatize state-owned assets. The Greek government is claiming it will
have binding offers for the sale of state gas company Depa and the gas grid
operator DESPA by the end of September. The message is meant to be that things
are moving forward. Meanwhile, Greek Prime Minister Antonis Samaras wants to
do a bit of hustling before the governor of Greece Mr Horst
Reichenbach issues his decision. He is planning visits to Germany and France at
the end of August. The Greek media have already reported on his plans for the
trip: Samaras wants to ward off Greece's "quick euro death."....well there is no
"troika" - there is a 4th Reich however and Greece is a test site for what it
is to follow for Europe.
1 comment:
The French growth numbers are, I suggest, very much on the optimistic side just as the exposure to PIIGS numbers are artificially lowered.
The French economy statistics having being playing games since the 90's and it is about to catch them out.
France will see seriously diminshed growth - >0.5% in Q1 2013 and things will really begin to shear and shatter. Remember if France wavers the 2 altar boys Luxembourg and Belgium implode.
By Q1 2013 Italy will be moving along with a dented Germany and flatlining Holland and Austria.
Nokia will be waning and Finland and Estonokia will join the very punitive bridging loan (bailout) club.
Greece and Spain will be in transition to drachma and peseta.
Post a Comment