Tuesday, July 24, 2012

Greece Is On Its Way Out ...

I'm not normally a betting man (although I do invest in the casino known as the financial markets, which may be a crazier thing to do than putting on a tux and heading for Monte Carlo), but I'm willing to give odds that Germany has decided to let Greece go. I know that the FDP doesn't speak for Germany, but here is what the party's secretary-general said:
"Athen ist bei der Euro-Rettung zum Hemmschuh geworden. Die mangelnden Fortschritte Griechenlands bei allen Reformen, Sparvorhaben und Privatisierungen führen dazu, dass die Finanzmärkte die immensen Anstrengungen in anderen europäischen Ländern nicht ausreichend würdigen", beklagte Döring nun.
"Athens has become an impediment to saving the euro." You can't put it any more bluntly than that. Making an example of Greece didn't prevent contagion to Spain and Italy, which was the real purpose of putting the screws to Greece, so why bother pouring more money into that bottomless pit? So say Germany's archest neoliberals. So it's on to plan B, or is it plan W--I've lost count.

Hollande has thus far been quiet, but with Germany now on negative watch by the ratings agencies, it's clear that Europe must try something new. If the Germans jettison Greece, there's not much France can do to stop them--if it even wants to. But the growing danger is that Germany may decide that it's had enough of the euro altogether. It may persuade itself that it conceded too much to France in the construction of the euro, not to say the EU, and decide to go it alone, or propose a new currency union excluding the troubled economies. I think the endgame has begun, and France will not be able to remain silent much longer.

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