AUTOREFRESH 
Is Europe looking for a way to kick out Greece?
I’m not a fan of the way Europe is handling the crisis in Greece at the moment. It’s almost as if they’re looking for a way to kick Greece out.
German leaders continue to put themselves on the front lines and now a rift has opened between the Greek public and Germany. It would have been better if Lagarde or Juncker or someone from an international body was the punching bag but the Germans don’t seem to care.
Today, Schaeuble is saying it’s easier to allow Greece to default now. What is the point of such a statement? All it will do is scare away PSI participants.
Now we have Juncker & Co. demanding that Greek politicians sign a pledge to implement austerity reforms. It’s a pointless exercise that has no legal backing. Whoever wins the next Greek election will do whatever he or she wants and some stupid signature won’t change that.
The only use for such a document would be to use it as an excuse to kick Greece out.
That’s still an outlying scenario at the moment, but we are almost at the point where we need to see some signal from Europe that it wants Greece to stay in the club. After a number of Greek politicians sacrificed their political careers to pass the austerity vote, it’s certainly disquieting how the EU continues to push.
” All it will do is scare away PSI participants.” … exactly! can’t that be part of the plan?
Europe is a real economy. There is no more space for those lazy greeks. Let them find somebody else to pay their bills.
seems like they suddenly want Greece out; though sure it’s convoluted… That being said, beats why they sunk so much money only to give up now.
anyway, there’s a certainty in all this mess. And that is that noone has a plan.
I’ve been interpreting this situation along the very same lines. It has me wondering a lot about the entire EU project and the ideas and motivations behind it possibly from the beginning all the way until now. I know I’m starting to sound like the weird conspiracy theorist guy, but it is as if the creation of the EU, and Germany’s overwhelming and disproportional power within it, are the way Germany can go about conquering Europe and forcing its ideals on everyone else in today’s socio-politico-economico setting. It sounds like they are now wanting to declare the EZ “Greecianrein.”
Obviously I’m speculating here and only working with possible ideas, but the actions of certain figures as of late can only make a thinking-person ponder such things.
I mean, I though this “tell me if you want to break up” approach so you can pass the guilt is a waste of time in a couple… let alone at this level.
Interesting perspective. It’s quite possible but their stance could also be due their being sick and tired of Greek vacillation and failure to implement – not just now but over the years. They may have weighed the possible reaction to Greece being kicked out and could see it as better for the Eurozone down the road. Of course, I’m just speculating and whatever the motive for their rhetoric and actions they may be miscalculating. But what can one do?
A disingenuous offensive and ill informed statement from you there Lisa.
Save the tears. It seems to me that the majority of Greeks want out of the EU.
Great observation, Adam. What’s your take on AUD.USD and EUR.USD if Greece leaves Euro?
Originally there was a push for private involvement, but when things became worse, then the risk was placed upon banks holding Greek debt. It looks like the banks are shored up now across Europe, other than some Greek banks that some sources (FT, Reuters) indicated held large amounts of Greek debt as collateral. There has already been a massive outflow of Euros by Greeks from Greek banks.
The other thing beyond German demands is Finland wanting collateral from Greece. This happened last time, though they backed off. I don’t see them backing off this time, and that might lead to other countries making similar demands.
The haircut amount went from 50% to 70% fairly quickly, and I have seen some analysis suggesting only a 90% cut would make any positive difference for Greece. We also have some past reports of Greek debt being sold for 0.3 per EUR, meaning the losses were already taken.
At the previous bail-out tranche the banks and counter-parties were not shored up so well, and losses were not taken already. The only thing between Greece and default is Greece making that decision on their own, or the funds simply drying up. What would not surprise me would be the IMF going it alone and sending enough funds to allow the 20 March debt payments to be completed, but who really gains in such a situation.
I think the simple trade to take if they live is buying USD. There are a lot of moving parts though, it really depends on how they default/leave the euro.
Things may not be quite as they seem. Schaeuble (i.e. Merkel) et al have their own domestic political concerns. As always, the political class will pit one population vs another to the extent it serves their purpose — and their primary purpose is always to remain in power. A number of EZ parliaments will need to ratify the deal, and that will never happen if their constituents believe it is too sweet for the Greeks.
The answer to Greece’s problems is here. That’s a lot of real estate to lease or sell.
Its not anyones fault but Greece and their politicians and the system they have. Everyones wants a bailout but who bails-out the German taxpayer?
Yes we have record in surplus but so little comes to the citizens, we work the hardest and have to live in this shitty weather ad still we have to bailout others. Greece mismanaged and they have to accept that and take responsibility and stop blaming others.
Fritz, Germany is making loans, not giving money away. International loans are ALWAYS paid back.
International loans are not always paid back.
Germany had a lot of its debts forgiven in the 20th century, post-WW2.
IMF loans are nearly always paid back.
Ok, they’re always paid back in modern times, excepting a couple failed states. There is a 1 in 1000 chance that Germany loses money on loans to Greece.
I certainly agree. There’s certainly a feeling that Germany is showing Greece the door. Perhaps this is done as a way to deter other countries. Trust is gone since Papandreou’s referendum offer, days after the summit that awarded Greece a 50% haircut.