The Greek deal
http://www.washingtonpost.com/blogs/wonkblog/wp/2015/07/13/why-europe-is-in-shambles-but-greece-is-most-doomed/
I hope you lovely readers are tracking the mess that's been created between Greece and its erstwhile friends in the European Union. I fear that "hope" is about all the poor country has going for it...
This was an obscene breech of faith -- admittedly in BOTH directions. First, the radical Greek government elected last January went out of its way to antagonize the Brussels folks. And then, over the weekend, the EC led by Germany put the screws to the Greek delegation that was desperately trying to resurrect a deal on the "scorched earth" created by the Greek referendum a week ago.
In many ways, the Greeks had it coming: for five long years, they'd promised Brusseles to do major economic reforms in exchange for massive loans to stabilize their self-created situation. New taxes and budget cuts did accomplish a lot, BUT by last year the Greek voters had had enough austerity -- and they elected a party of imbeciles to go to war with the EC.
You guys know the story -- BUT are you aware that ther are four OTHER Euro countries who aren't that much better off than Greece? Yup: Italy, Spain, Portugal and Ireland all have "structural" problems up the gazoo. That is THE point of this WPost article: all five are in various sorts of trouble, though ALL have improved their fiscal situations in the past four years -- at the price of the highest unemployment and slowest growth among all EU nations.
The Germans and other discipline-minded members are all too aware that Greece is only the tip of the iceberg. The $100 billion they are to cough up for the Greeks is only the smallest part of what they'd need to finance if the other four countries were to fall apart.
Thing is, I do not see the Greeks taking the week's horrible news lying down, especially after a week ago's referendum. Much as I dislike the Tsipras Government, everyone who loves Greece has to hope they can get all the promised measures passed by their Parliament in coming days -- against what will be FIERCE opposition. Alas, I'd bet on the country leaviing the Euro-Zone within a few weeks...
I hope you lovely readers are tracking the mess that's been created between Greece and its erstwhile friends in the European Union. I fear that "hope" is about all the poor country has going for it...
This was an obscene breech of faith -- admittedly in BOTH directions. First, the radical Greek government elected last January went out of its way to antagonize the Brussels folks. And then, over the weekend, the EC led by Germany put the screws to the Greek delegation that was desperately trying to resurrect a deal on the "scorched earth" created by the Greek referendum a week ago.
In many ways, the Greeks had it coming: for five long years, they'd promised Brusseles to do major economic reforms in exchange for massive loans to stabilize their self-created situation. New taxes and budget cuts did accomplish a lot, BUT by last year the Greek voters had had enough austerity -- and they elected a party of imbeciles to go to war with the EC.
You guys know the story -- BUT are you aware that ther are four OTHER Euro countries who aren't that much better off than Greece? Yup: Italy, Spain, Portugal and Ireland all have "structural" problems up the gazoo. That is THE point of this WPost article: all five are in various sorts of trouble, though ALL have improved their fiscal situations in the past four years -- at the price of the highest unemployment and slowest growth among all EU nations.
The Germans and other discipline-minded members are all too aware that Greece is only the tip of the iceberg. The $100 billion they are to cough up for the Greeks is only the smallest part of what they'd need to finance if the other four countries were to fall apart.
Thing is, I do not see the Greeks taking the week's horrible news lying down, especially after a week ago's referendum. Much as I dislike the Tsipras Government, everyone who loves Greece has to hope they can get all the promised measures passed by their Parliament in coming days -- against what will be FIERCE opposition. Alas, I'd bet on the country leaviing the Euro-Zone within a few weeks...