Already facing serious difficulties – both internal and with regard to its EU partners (see our longer essay in Saturday’s WSJ) – Greece’s predicament just became substantially worse.
Speaking on national television this evening, the Greek Prime Minister – George Papandreou – lashed out at the European Union (presumably meaning mostly Germany) for creating a “psychology of looming collapse which could be self-fulfilling.” He also implied that Greece was being treated, in some senses, like a “lab animal.”
Without doubt, EU engagement with Greece over the past week or three has not be well-managed – and the pseudo-announcement of support after the summit on Thursday was a complete amateur hour.
But Greece has real problems that need to be confronted and it will go much easier for everyone if there is external assistance. You cannot overspend in the Greek fashion without eventually facing a reckoning.
The Greek government is implicitly suggesting collapse – with the possibility of contagion to Portugal and Spain (and thence to the banking system of Latin America, etc). But this is a very dangerous game. Greece is not Goldman Sachs – it cannot credibly threaten to bring down the world’s entire financial system.
Less well-run countries default on their debts with some regularity. To be sure, it is awkward for a eurozone member to be forced into the arms of the IMF – but several European Union members are there already (e.g., Latvia, Romania.) Korea had to borrow from the Fund in 1997, despite having recently become a member of the OECD – which stamp previously was considered to connote respectability and stability.
Greece is well down the path to becoming regarded more like Argentina – a country that struggles over many decades (and whose leaders frequently rail against the world) and for which episodes of reasonable prosperity and new economic models are punctuated by gut-wrenching crises, most of which do not shake the world.
Will the EU save Greece? Much will depend on how bad the situation could become in other “related” (in the eyes of the financial markets) places.
But destabilizing actions or inflammatory statements by Greece make an orderly rescue less likely and put another major international economic crisis firmly on the table.
Greece debt bailout: EU leaders split over euro crisis | Mail Online
FT.com / Europe - Berlin looks to build Greek 'firewall'
Timebomb for the Euro: Greek Debt Poses a Danger to Common ...
Europe Promises 'Coordinated Action' to Help Greece - NYTimes.com
NO ONE has questioned this- EVER!
Bloomberg-WSJ-Financial TIMES- CNBC - blah blah blah
Hank was in DAVOS-- see Archives at CSPAN!
The us of a decided, on a scale that dwarfs Greece, to print fake money charged to its citizens to reward criminal behavior that has devastated many millions.
Greece, via its citizenry, who are not at fault in this fiasco of private coruption, with major fault lying at the feet of the derivatives fakery in the us of a, can simply write off the debt now, sequester their government's financial system sans the international banking and mortgage system, federalize all large private enterprise into non-profit, publically-held organizations, re-value the assets just seized with the personal bank accounts of the philanderers, and pay off the debt via asset redistribution.
Will this be yet another example of the few enslaving the many through their own conscious misdeeds? Or will Argentinian-style revolt prevail, without the petty bourgeoisie continually vying for a spot on 'let's make a deal'?
How far does the hand of Rothschild extend? Best bet is: pretty far.
I think you'll find it makes all the difference.
Wow, if this doesn't make you want to be a recluse in cabin somewhere in the Rocky Mountains, nothing will.
Elizabeth Warren for President, 2012.
Howard dean 2012
Sound familiar?
As a citizen of this country, tell the Democrats to stop spending money like it's going out of style (which it is).
How G0LDMAN Helped Greece to Mask its True Debt
http://www.spiegel.de/international/europe/0,1518,676634,00.html
G0LDMAN helped Greek government hide its deficit using Derivatives Deal to circumvented EU deficit rules. G0LDMAN charged a massive FEE (Like JPM was found guilty of doing) for the deal and sold the swaps on to a Greek bank in 2005.
Like G0LDMAN always does to its clients, it then placed massive NEGATIVE bets against the Client so G0LDMAN profits BIG on their Client’s (the Greek Bank’s) downfall!
Creative “ENR0N” accounting took priority! G0LDMAN devised a special kind of swap with fictional exchange rates to enabled Greece to receive a far higher sum and that also helped justify the massive FEES.