Showing posts with label Syriza. Show all posts
Showing posts with label Syriza. Show all posts

Sunday, February 22, 2015

The Greeks blinked

After a lot of big talk from the new Syriza government of Greece,  the Greeks agreed to keep  the cost cutting measures ("austerity") that previous Greek governments had agreed to (agreed to under pressure, but agreed to) in return for four months more of EU bailout payments.  Apparently the EU had the stones to tell the Greeks, "Do it our way if you want any more of our money."  Since the Greek government is totally stoney broke, it listened to reason.  Now all it has to do is sell the deal back home in Greece. 

Sunday, February 1, 2015


Jargon for Greek Exit from the Euro.  The Economist is highly concerned.   The new left wing Syriza government of Greece is making silly noises.  Economist has a good cartoon, showing the new Greek government barreling along a one lane mountain road in a steamroller, bearing a sign reading "Irresistible Force".  Coming the other way is a big 18 wheeler, filling the road from side to side, with Angela Merkel at the wheel.  Bearing a sign reading "Immovable Object".
   What will happen?  No one knows. 
   What ought to happen, is the EU tells the Greeks to keep sucking it up, or do without.  There is a multi billion Euro chunk of bailout money still due the Greeks.  The EU could, if it has the stones, with hold it if they don't like what the Greeks are doing. 
   The EU may not have the stones.  There are plenty of lefties all over Europe who dislike "austerity" (a balanced national budget).  The think if the Greeks drop austerity, it will be a signal to their own governments to crank up the welfare spending. 
  The other issue for Greeks is leaving the Euro.  This would enable them to print all the drachmas they need to pay for all the welfare they want.  At the stroke of a keyboard, all the Euro deposits in Greek banks would become drachma deposits.  And everyone expects the newly declared drachma to drop 50% or more against the Euro.  So every Greek with money, in the bank (maybe half of them?) is against Grexit.  Will their interests be strong enough to overcome the desire of the welfare staters to print all the money they want?