More Greek myths

The need to speak truth to weakness

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Myth all around, and Charlemagne compounding the issue…

Welcome to the now regular – fudging the issue – proudly presented to exasperated TE Readers, which are hopefully not yet so befuddled to not notice that they are taken for a ride…

Ms. Lagarde has introduced “some common sense” into the never ending Greek melodrama debate precisely after two main events – firstly, the removal of French bank balance sheets out of harms way and secondly, the US election, thus focusing one of the main IMF sponsors attention to protecting the own purse.

However, the dose of reality was soo limited to ignore all facts of the Greek situation – which is basically bankrupt for 3 years… to submit to another “consideration”, i.e. Angie’s fear of admitting losses which have long been incurred before the September 2013 election. [ I propose to adjust the schedule of all leader elections to be put in one month every five years all around the world, all at the same time, to enable politicians all over the word to actually achieve something in the remaining four years] Outside Europe, the IMF would have never agreed to such a botched package. I actually wonder why none of the non European members - did not step in and put their respective foot down to protect the IMF’s money and reputation (not necessarily in that order).

And while we are gaping at the increasingly revealing show presented by the Troika, now not even more pretending the “bailout” was the last one, as everybody knows the Greeks will need more money soon (because – as long as there is cash, there will be demand and no real implementation of reforms).

Charlemagne duly forgot to mention anything about the Troika report – in his favour, nobody else did – so we are still left in the dark on how bad it really is….. We will find out soon enough and certainly before September 2013.

For the scant hope, of “ a EU budget in 18 month and Eurobonds in 5 years” this will be not enough (even with Draghi doing overtime at the printing press, handing out more money to tottering banks than allowed under the ECB own rules of collateral), even it were to come* - because the main issues – are again not tackled. None of this will make the Euro workable, ever. Reason being, “EU budget and Eurobonds” is EU Orwellian doublespeak for “max out Germany’s credit card to avoid meaningful structural reform for a little bit longer”. Sadly enough for the German population (and the rest of the core/northern countries) – Angie is too keen to have herself fleeced – and the centre-left opposition even keener, so it can only become better after September 2013 for the one’s doing the fleecing, or worse, for the one’s being fleeced.

Which begs the question – are all the main players so deluded – or are they secretly plotting a Plan B and the whole show is diversionary fire for the hapless EU citizens?

Whatever it may be, this article has not helped adding clarity.

*anybody interested, I highly recommend the following

guest-inonisn in reply to Courtjester

I totally agree that this article (Karl der Grosse) doesn't add clarity.
Your comment is however very welcome because you are actually making the effort to show common interest of core/northern countries. (Whilst Charlemagne is trying to brand the German Federation as a scapegoat).

Something else: Is the UK entering triple-dip recession?


Greece's economy has contracted 23 % in 5 years; the forecast for 2013 is 4.5 % more. Despite the bondholders taking a 50 % loss the debt: GDP ratio has gone up to 179 %. I thought that you were the only person at ECONOMIST who was taking a non - ideological view.
In NINETEEN THIRTY THREE the US economist Irving Fisher had the not particularly profound apercu that IF YOU CONTRACT THE ECONOMY THE DEBT:GDP RATIO WORSENS. A US Professor of Economics at Sussex pointed out that if the DENOMINATOR falls the fraction increases. Greece is in a downward spiral with Portugal Spain and Italy following.
The IMF prescription has ALWAYS been AUSTERITY yes but DEVALUATION and DEFAULT too - these being the OXYGEN-SUPPLYING elements.
The openly neoNazi Golden Dawn is on 14 % (up from 6 in June). SYRIZA now leads the polls. Catalan separatism has been bubbling beneath the surface for 300 years since it was partitioned between Spain and France. The issue has come to a head because of the bursting of the bubble in the Spanish economy stemming from a NEGATIVE INTEREST RATE OF 5 % has brought into sharp focus (along with grossly irresponsible and wasteful spending by just about all the regional governments) the fact that Catalonia sends more funds to MADRID than it gets BACK.

Nom Deplume in reply to NAVESTOCK

Well somebody HAS to put more into the kitty than they take out otherwise there isn't enough money in the system. US States take this for granted. Until and unless the European members of the EZ do as well it is doomed.

emmafinney in reply to Nom Deplume

"somebody HAS to put more into the kitty than... US States take this for granted."

Bavaria and Saxony take it for granted too because they are part of a country called German, just like New York & New Jersey take it for granted because they are part of a country called USA

So whats your point?

Comparing apples to oranges.

The USA is a country just like Germany or France.


US Senate has passed a resolution that US funds at IMF must not be given to 'INSOLVENT' countries. US and Canada will not take part in EZ 'bailouts'. I understand that DSK agreed to help with EZ's programme and then told shareholding countries.
In June IMF said in report that EZ with current membership is UNVIABLE. There was speculation that US government applied pressure to have this obvious fact recorded in the report.


me yet again!
I don't think Mrs Merkel wants to take charges but, either to keep Germany having an undervalued currency or for 'European' reasons or because when you are in an impossible situation you have to take a bad course of action or 2 or 3 of these, she has gone along with bailouts. It's possible that CDU/CSU will be out of power for a GENERATION when the German ELECTORATE finds out that its nightmare of bankrolling the southern countries has happened.
The Economist to the best of my recollection and certainly other commentators have pointed out that France with its proud history will never go into proper fiscal union. Hollande has said that the budget is the 'INVIOLABLE PREROGATIVE' of the nation-state and of course the only hard inducements that governments can give their electorates are FINANCIAL ones.
I believe that Holland is against - it's got enough financial problems of its own and Finland and Austria will not agree to this. They had a joint meeting to declare that ESM will not deal with bank's 'LEGACY DEBTS' i.e. the ones that have CAUSED the problem.

luigi bianchi

Well,i am afraid that to deal with Greece in 2020 will be a little bit hard,considerd that the greek governors will be forced to read the european blueprints sitting uncomfortably over their tanks and armoured personnel carriers.Ot those folks dealong with "europe" will be rather hairy and holding a Kalashnikow?Let's wait and see the conclusion of this greek tragedy.


even if there are side effects of the last EU leaders decision ,it is some workable path for Greece governement for future recovery !

After 10 years of Greece gvt misrepresentation of economic data and another 5 years of political wrangling as to admit to Greek populace about the hardship they should incur for at least another 20 years ,well they got the third chance ....They must collect taxes ,sell assets and payback what is due (in order to keep the Greece afloat ).
What is the meaning of charging on Ms Merkel and IMF for this rescue program?If it is that bad ,is because in the first 2 years of implementation Greek gvt couldn't sell the assets agreed for and was unable to collect taxes in his own tresury and so on...
I am sure that the last agreement has conditionalities and this time around everybody will keenly review the implementation!

PS I read the comment about Ms Lagarde taking French banks out of the harm's way...Credit Agricole just took a life threatening charge from his Greek investment ...
Many other big banking names had huge writedowns ,for God sake :if there was misbehaving in Greece in the wake of the worst downturn in 70 years ,should all of us commit suicide ?
Best regards ,all my respects to The Economist

Courtjester in reply to Popa_Eng

Sarkozy persuaded Angie in May 2010 to "save" the Greeks in oder to save French Banks (Angie agreed because of Commerz etc were in a similar bad spot and possibly other considerations).

If CA has now managed - 3yrs down into the crisis to "take a charge on its Greek investment" - this begs some questions:

If the charge taken was "life-theatening", did they write down the "asset" completely? And how have they recognised the liabilities from selling the sub for a token amount, which may be contingent or not, what is the value of the loan they gave the new owner to keep the sub afloat (zero?) and are there any more "pledges/contigencies" (do not remember the deal structure well enough?) and how are they recognised - at fair value?* And if CA still has any "assets" in relation to the ex-sub, are these assets used as collateral with the ECB?

Was this all part of the "charge" or is their more to come? In the later case the Auditor, regulator and Draghi should possibly investigate.....

By the way, they might want to check with all institutions still somehow involved in Greece....

Marie Clear in reply to Courtjester

german propaganda:

BIS April 2011


considering that the dilemn was/is on Greek government Debt, Germany was/is more exposed than France (even with the 75% hair cut)

Marie Clear in reply to Popa_Eng


Credit Agricole sold out its greek left assets last August

but as far as Greece government Debt, France was less exposed than Germany

BIS April 2011


Moritz Nepumuk Titus

Throwing good money after bad. The Euro has no future and should be disestablished.Europeans do not share the same beliefs nor do they share the same way of living.
One must stop this whole mess before there will be more nationalism and hate among european countries.

I think you're wrong for a few reasons.
1.) American states frequently have different 'beliefs' as which religions are the 'major' religion in the area vary. Not to mention variance even within each state.
2.) Standard of living and 'pace of life' across American states varies at least as widely as in Europe.
3.) Economies vary at least as widely across American states as across European countries.

The key is simply 'internalizing' the concept that the EU is a 'larger' thing than any given country and the necessity of surrendering many, if not most, of the prerogatives of sovereignty.

Nom Deplume in reply to penruddock

Well no kidding. Did you actually read my post or just the first word in the first point 'American'? The point as summarized at the end is that unless and until the European countries are willing to simply ACCEPT that they have differences and then ACCEPT that they are going to have to view 'Europe' as a larger whole and not just their own 'national' loyalties and viewpoints a true 'European Union' will not work.

emmafinney in reply to Nom Deplume

Everything you say about America can be said about the different regions of Germany or France.

The USA is a country just like Germany or France.

Europe is not a country, it is a continent just like Asia.

Pedro Macedo

Since 2010, we have been discussing weather Greece should stay in or out of the Eurozone.
1.Slay the Nemean Lion.
2.Slay the nine-headed Lernaean Hydra.
3.Capture the Golden Hind of Artemis.
4.Capture the Erymanthian Boar.
5.Clean the Augean stables in a single day.
6.Slay the Stymphalian Birds.
7.Capture the Cretan Bull.
8.Steal the Mares of Diomedes.
10.Obtain the cattle of the monster Geryon.
12.Capture and bring back Cerberus.


Heracles jobs semmed a lot easier.


We are all Greeks ( leveraged nations ) so we should recommend only that which we would ourselves undertake. Do we want to scavenge in rubbish bins after a lifetime of working because our pensions are being slashed ? Do we want to deposit our infant children at orphanages because we can't afford to feed them? Of course not. Its no coincidence that Greece is on the front-line and also the notional birthplace of democracy. If you live in a democracy, and value democracy you will be extremely apprehensive at what we are seeing. Coming to a country near you, soon.

Heracles labours were a piece of cake compared to what Greeks are facing.

Alex Kilgour

Quit the Euro, float the Drachma and devalue it. Default on the debt. Live with the 5-7 years of pain. The pain will be different because there will be financial pains but a growing economy.

This is the only sane solution. And yes, all those poor people who loaned Greece the money will lose it. Here is a thought, when your alcoholic uncle who lives in a rental in the bad neighbourhood comes by looking for $1000 to help him until next week (and he'll repay you then and kick in an extra $100 for your troubles), if you loan him the money do you really expect it back? The reason that there is interest paid on loans is because there is a risk of default. The higher the risk, the higher the payback.

All these investment gurus who were giving themselves huge bonuses for being so smart to invest their clients' money in Greek bonds should reimburse their fees to the clients, too. But either way, don't invest with them again. Anyone who had half a brain raised serious doubts about Greek debt years ago.

aDutchman in reply to Alex Kilgour

The poor people who have brainlessly lent to their uncle expecting a nice return, advised by their investment guru, have already taken a 75% haircut. We are now talking mostly about money lent by other eurozone governments as rescue loans, having no other choice, and not with the intention to make a sound investment. Loans written off now, or a default, will be paid for by eurozone taxpayers.

ScKJutpUCQ in reply to aDutchman

The haircut affected primarily Greek banks and state social security funds which then had to be re-capitalised by the Greek state.

Greece pretty much has the same outstanding debt levels as it did before the "haircuts". The only thing that is different is that the form of debt changed from government bonds to outstanding loans. What matters, is the volume of Greek debt and this has not been changed at all by the haircuts.

In addition, as a percent of GDP it has actually increased from 115% in 2009 to 180% in 2012 thanks to the austerity policies.

The whole "haircut" and "bail out" malarkey is actually a laughable financial fiasco...


I've been making this same comment from time to time for more than a year now. Greece should just unilaterally default on its debt. And then no one should lend them any more money. They would start out debt free, but would be forced to cut back their government spending drastically. Yes, this would cause great hardship, and the Greek standard of living would go way down. But then there would be true pressure to restructure their economy, tax collection, etc. They would not have other countries dictating how to do that. They would not be paying any interest on sovereign debt. It would all be up to them. No one to blame except themselves. No one to take credit except themselves when they succeed. They could either stay in the Euro or not. If not, they could inflate their currency, but contrary to popular opinion, this actually hurts a country in trouble. They would be better off keeping a sounder currency.

Nom Deplume in reply to gdpbull

Actually if they default they cannot stay in the Euro. There is no methodology for them to do that. Defaulting on sovereign debt goes hand in hand with drastic currency devaluation. So... how does that work when other countries use that same currency? It doesn't. They would have to leave the EZ and begin reprinting the Drachma.

gdpbull in reply to Nom Deplume

Not true. There is no reason that they could not both default and still stay in the Euro. Its true they could not devalue unless they left the Euro. However, with a threat of leaving the Euro, there would be a stampede of Greeks moving their Euros out of Greece before the Euros were converted to Drachmas.

Nom Deplume in reply to gdpbull

How?! How could they possibly stay in the Euro? There is no way the Euro survives if one of their members is in deep default on it's sovereign bonds 'minted' in that currency. None. That would drastically undermine confidence in the currency itself AND it would bankrupt Greece even faster. After all... if you make 10 Euro per day and ALL the other countries average 100 Euro per day how in the world do you stay afloat as an economy? If petrol takes up 100% of your daily revenue if you are a trucking firm... how exactly do you operate? No there is no way they stay in the Euro if they default on sovereign bonds.
Have you never heard the term 'banking holiday'? After all capital flight is already happening. No you just keep the 'switchover date' a 'top secret' and then when folks get their payroll on Friday at 5:01pm the banks 'close' and open on Monday with every account revalued in Drachma.


So do you. Charlemagne, I know you desperately want Eurobonds since this is the only thing big enough to help your beloved City to escape the otherwise certain desaster.
BTW, maybe you are not aware about it, but Eurobonds and any other exactly what the vast majority of Germans do NOT want. We'll tell this our politicians again and again, and they'll listen.
As for the help so far: German taxpayers have already actually and irreversibly lost ~15bn Euro thanks to the participation of some compeltely or partially state-owned banks like FMS Wertmanagement, Commerzbank and some Landesbanken. From my POV, this should be enough. Now to pay should be the turn of the profiteers of the finance bubble of the past few decades, which means, your beloved banks, hedge funds and so on.

bokassa666 in reply to VerySeriousSam

exactly, and why not have the 2500 or so wealthy Greece pay the taxes they owe (over a billion €!!)? And how come that it is written in the Greek Constitution that shipping companies do not pay taxes!!???

Dimitri_K in reply to bokassa666

There's nowhere in the text of the Greek constitution that "shipping companies do not pay taxes".

Greek shipping companies have received tax exemptions by law. There's discussion going on in Greece whether the Greek government shall reinstate taxation the Greek shipping companies.

Nom Deplume in reply to Dimitri_K

I think the frustration from outside is that those 'discussions' have been going on for 3 years and no end appears to be in sight. There have been numerous 'discussions' about privatization, but very little action on that front either. These are the things that the outside parties involved are starting to lose patience with.

VerySeriousSam in reply to Dimitri_K

Nitpicking. In the Greek constitution is a reference to a law which exempts shipping companies from paying taxes. That's close enough.
And that the discussion to end this luxury is still ongoing says a lot ablut the real will of the Greek 'elites' to make their nation a modern one, instead of keeping it close to the failed state realms.

Julian the Pi in reply to VerySeriousSam

In the Greek constitution there is a reference that the state is compelled to take care of family. Have you seen the care they take/ No the true issue here is that Greek shipping companies can easily relocate and England will gladly take them. i hate paying more taxes while earning 35.000 than a billionaire but that is capitalism, no?


Giving money to Greece is like giving money to a lazy lying imposter! Let Greece default! Put all their tax evaders in jail and take ALL their properties. We know who they are! The only ones suffering in Greece are the few honest good people who already were living on a meager salary and pension. Cutting THESE hard-working good people's revenue is a horrible insult! The EU should dictate the Greece economy and banking. Greece needs to default and lose its soverngnty!!

ScKJutpUCQ in reply to bokassa666

Interesting that this post has been recommended by some people.
It is evident that hate and fanaticism are not far beneath the surface after all.

A few decades ago Germany invaded European countries killing millions of people and destroying their economy. After the eventual defeat of Germany, Europe, wisely in my view, chose to forgive the Germans and offered invaluable political and economic support to practically raise Germany from the dead.

This has happened only a few decades ago, it is not prehistory. 25% of Greek people for example have lived the German occupation and still have memories of the consequences of serious conflict that some of you dismiss as irrelevant.

I hope that sense and tolerance prevails and views such as those of the above poster are isolated and condemned by the majority of us.

Zlatomir in reply to ScKJutpUCQ

"A few decades" implies 20, at the most 30 years. I don't recall there having been a German invasion anywhere since 1982. WWII ended, say 1945, which was about 67 years ago...Either way, Germany's situation after the war and the current Greek problems are totally different things and you probably shouldn't be comparing them.

Marie Clear in reply to bokassa666

hmm there never was question of giving money to Greece, but to lend money to Greece with interests. Excuse me, these hard working people haven't yet felt the pein, but they will when Greece will get out the EZ, and then the dominos effect will have a full play... Germany's Banks ? Boom !

Julian the Pi in reply to bokassa666

Now were should i start from? Suuffice to say that yes, default was probably a solution in 2009. Then banks across Europe would have some serious answers to give to European tax payers, we would have taken our 40% loss in GDP and today recover slowly, whereas today we count 24% already with no sign of recovery. As the side bonus, we would have avoid preaching from others.And a comment: Many have gone bankrupt, including the virtuous germans. Nobody lost sovereignity. of course Germans, Dutch, Finnish or others can take away, or employ Turcs to do so. But blood is the inevitable price of doing so. So let us stop nonsense and talk about mutual concessions in sovereignity that will allow us build our glorious Federation.

Terence Hale

Listening today at the German parliament discussion over Greece. Germany we are of concern of you , you are us of value, may we say something?

PIIGS can´t fly

"Delaying the inevitable ..."

Your last sentence is best - but with a slightly different meaning: TE has been advocating that the €-countries should delay the inevitable for about 3 years now. Greece has been broke all the time, lending them money has been a grave mistake, we should have let them default and then restart years ago.
Now Greece is not in better shape than at the beginning of this rescue attempt and the Greeks are not doing what it takes.
Your cartoon is typical of your weird take on the €-crisis: The poor Greek has had an accident and horrible Mrs Merkel will not help him. That is not how German taxpayers see the world.

CPetr in reply to PIIGS can´t fly

Although I do not agree with you comment, I am not commenting here in order to argue against it, but in order to report the name of your profile and call other users to report it too. I have already reported it as hate speech adding the following text:
'PIIGS, in the name of the commentator himself, is offensive, assuming it refers to the South European countries and Ireland. Would you not consider it hate speech if someone called you or your country an ape or a donkey. Hiding a derogatory word behind initials, i.e. PIIGS instead of pigs, should not be acceptable.'

I hate to spoil the consensus, but against general belief, Greece has done far too many thing in order to reshape its economy. The so called "closed proffessions"are much more open than anywhere in the West, not to mention the dismantlement of labour rights and the crash of salaries. The main point of disagreement is that right now, we are not privatising. It is not irrational, given that right now, even if someone appears to buy, he will do so in 1/10 of its value. Even creditors say that privatisations will hold a symbolic value! This spoils some great deals (after all it is not forbidden to make money against the interest of the fool of the village)and after all, when all that is asked is done and even more, we still have to find something to blame the lazy undeserving Greek.
However we ought to accept our two huge drawbacks: bureaucracie, which does not improve and tax, though not in the terms of the current discussions. Nowadays people usually just don't afford paying taxes, they don' t evade them!


Deliberately foolish creditors often had their own perverse agenda, involving corrupted schemes. They ought to be punished, not the general population, whether in Greece or elsewhere.

Keeping throwing public money to serve the devious schemes of these still powerful and influential creditors keeps feeding the evil they created.

One of these schemes is exploding interest rates to fill the pockets of creditors. Thus default is not just the way to insure basic needs of the general population, or a minimally functinoning economy, but also the way to justice.

Think about it. Since the 2008 financial crisis, how many financiers personally responsible of the disaster paid with their own ill gained profits? A result is that their vicious schemes have not been exposed, and much less understood, so they persist. And their influence persists. (For example, singing the praises of Warren Buffet is common, although he is the individual most culprit of the Greek disaster).

Even the most outrageous cases have not been prosecuted. An example. The top three malefactors at Lehman Brothers left with five billion dollars among themselves, and no attempt was made to recover the money by the public, although the public, in the EU and the USA, paid trillions (through Quantitative Easing)for mitigating the financial catastrophe.

Why were Mr. Fuld and his colleagues at Lehman not examined, let alone punished and condemned to regurgitate some of their stolen billions? Because Lehman was full of USA government employees, all of them worjing in full cooperation with the Fed, to keep Lehman afloat. Hence prosecuting Lehman vigorously would have been prosecuting vigorously the financial-political governmental complex.

Thus, We the People ought to default out of the corrupt schemes!

Oh, by the way, an important fact about Greece: the Drachma was converted into the Euro at twice the rate it should have been. That was done with full German government cognizance, no doubt from hoping to sell a lot of expensive cars to falsely rich Greeks.

Logically, the value of Greece in Euros thus ought to be halved at some point. The key is to do so while insuring the comfort of the general population, not just insuring that very rich foreign creditors, architects of the disaster, stay very rich.

Epsilon the Great

"Europeans" they called themselves as such - 3 years now they were considered that the Greek problem was mainly a financial failure. Suddenly they realized that the problem was particularly geopolitical. Loosing Greece (economically) they would have a Greek prime minister named "KIM".!!Then it would be costed them some trillion dollars / euro to defend the area. Greeks have 2000 thousand cons but they have one advantage against which nobody can defend himself. They are "Magkes and filotimoi".Push them to the bottom and then you are just realizing what you did against your interest. Is above a threat? Not -is just history.

Hello Epsilon!

I think France and Italy - not to mention the SGIP countries have always known this, that Greece also represented a geopolitical question. That is why the Franco-Italian tandem is so solidly against Germany on the question.

In any case, for the first time in more than a year I am optimistic for the Greek people. I think there is an end to this suffering - and I do not agree that Greece will have to face "years" of budget cuts. Three, maybe. This recession cannot last forever, and recovery in Italy and the Balkans will pull up the Greek economy.
Having resolved Greece and Spain, the EU now needs to direct its economic attention to the Balkans.
Slovenia is on the brink of requesting a bailout (or no). Croatia says they have no money to pay state employees beyond December. The Romanian economy could be an engine of recovery in the region but still suffers from a crisis of confidence, given the Euro-crisis. Hungary's political problems are hampering that country's economic recovery - and recession is worsening the political problems. Serbia is still being treated, especially by the Germans, as a pariah. FIAT has built a new factory for the 500L in Serbia, in which 98% of the cars are designed for export to Russia and Italy (primarily).
A few big investment projects around the Balkans - whether they come from Europe, Asia, Russia, Brazil or wherever - would do wonders to restore business confidence in the region and relaunch the economies there. That could only have a positive effect on Greek exports and recovery.

MilovanDjilas in reply to ScKJutpUCQ

Yes, and always the Germans are thinking the same thing:

If we help Greece (or Portugal or Slovenia or Cyprus or Croatia, etc. etc. etc.) behind them there is Italy.

They are convinced we are on the brink of collapse and use us as a pretext for not assuming any responsibility to put an end to this absurd crisis.
I agree and understand that Berlusconi destroyed our credibility abroad. But please! We are hardly an economic basket case - we invented Capitalism, Modern Accounting, Banking and Sovereign Debt Markets. We are not going to lose this game, whatever the American ratings agencies attempt to pull.

Julian the Pi in reply to MilovanDjilas

I would love to share your optimism. If we continue such harsh budget cuts for three more years, there will hardly be anyone left standing, not to mantion the GDP fall I strongly believe that the current policie lies on the principle of the dead cat rebound. Being the cat, I short of hate it. Yet, I live the story, so my judgement may be blur.
As for the geopolitical issue, it is simple: if the EU does not "own" us, then we will inevitably join once more the one who currently rules the seas: America, you want us or not, here we come!


Merkel and servants of troika "dragging the dead horse".

-I believe The "DREAM" of monetary union which was believed to be grounded on solidarity and Equality Rights between the member European countries is now collapsed. Merkel's austerity prescription not only has failed, but it has trapped Euro-zone nations inside an economic prison. Merkel's prescription constitutes, abuse of Liberty and Social Crime, and that... smells blood.
-Therefore, hardly anyone could understand how the euro-dreamed currency could be survived.

From Canada, George Langadinos

VerySeriousSam in reply to KOYROS

"to be grounded on solidarity and Equality Rights between the member "

1st the monetary union was never grounded on the consent of the people of the EU. It was an elitist project from the very beginning, still is, and it was never democratically legitimatized.

2nd the participating nations were, are and will always be much to diverse in almost to many relevant aspects to be able to form a sustainable common currency union, let alone a sort of United States of Europe.

KOYROS in reply to VerySeriousSam

Thanks for your remarks Very Serious Sam stating that “the monetary union was never grounded on the consent of the people of the EU.”, and that is rising a few questions.
1st Does this make the euro currency illegal?
2nd Did Brussels “euro-group” grounded on the vote of the people of the member countries of EU?
From Canada,
George Langadinos

Nom Deplume in reply to VerySeriousSam

Number 2 is almost too funny for words.. umm... we (the USA) ARE you except we are even MORE diverse. So... how many folks of African descent are in your countries again? What percentage of the European populace has 'American Indian' blood again? What percentage of the folks of Jewish 'ethnic' descent live there? What about Hispanic? Funny one that last one is... there are more people of "Hispanc" descent in North and South America than there are in Spain which is where 'Hispanic' comes from. Tell us the one about US 'lack of diversity' again... I need a good laugh.


Who says Italy will be lending money to Greece at below cost? That depends upon the maturities.
The Italian Treasury is now selling 10-year bonds on the primary market at close to 4%, while this past week 6-month bills were sold at less than 1% for the first time since before the Greek crisis exploded. The interest rates on our bonds are dropping like a rock - helped along by:
1) Draghi's threat/promise of ECB intervention;
2) Approval of aid to Spanish and Greek banks (and soon, Cypriot banks);
3) The news that the Italian trade balance has swung from negative to positive for the first time in 8 years - and without a currency devaluation;
4) The political success of Monti's government and the upcoming elections which will finally resolve the impasse in the Roman parliament - not to mention the collapse of Berlusconi's party.
5) The fact that Monti's reforms and budget cuts are producing a budget deficit well below Maastricht's 3% ceiling this year. (Not as good as the 1.7% we had hoped for, but still much better than last year).

Actually, the news is mostly good for the first time in months.

So of course, Moody's has to downgrade the European bailout fund - just to keep the pressure on the Euro-zone: they are screwing with us. When is Europe going to move on a new European ratings agency?

Once again, the Germans are wrong to insist on application of Basle III rules: for 26 years, we have considered that Basle Accords I, II and III were designed to put banking on a more solid footing.
In the end, I think these accords merely represent a sort of "conspiracy" among the banks to stifle competition - which is stifling the western economies.

It is time to denounce these accords, sponsored largely by Swiss gnomes (originally aimed at hurting Japanese banks). Given the huge amounts spent, lent or guaranteed in every country (except for Italy, thank you very much) to rescue their banks, there is no proof these accords have produced greater banking stability. They have merely created banking oligopolies that respond to no regulator.

MilovanDjilas in reply to MilovanDjilas

One more consideration:
The majority of European citizens (not all, but the majority) who are against the EU now claim they are against "this banker's version of European integration". It is the "Europe of the Bankers" that has re-ignited the old hatreds across Europe. This is mostly a function of a too-restrictive Euro-policy (sponsored mostly by a Bundesbank that is utterly obsessed with hyperinflation and utterly blind to economic conditions outside of Germany - except to accuse all others of being unworthy of sharing a currency with Germany) combined with the bank over-consolidation triggered by the Basle Accords.
It is time to liberate European citizens from Swiss gnomes and the Bundesbank's excessive fears. The Bundesbank should be presented with an aut-aut by the ECB and a clear, overwhelming majority of EZ central banks: either the ECB adopts a more liberal inflation policy (up to 4%) or the Basle Accords must be denounced.
Together, the 0%-2% inflation policy and the Basle Accords are destroying Democracy, the Economy and Integration in our continent.
As a final note, please allow me to express my support for Austerity: we can discuss the details of how fast deficits should be reduced, but there is no doubt they must be reduced and total debt ratios should also be heading downward. The battle against Austerity is a red herring. The culprits are an excessively hard currency and the Basle Accords, not Austerity.

SinnFrei in reply to MilovanDjilas

"Once again, the Germans are wrong ..."

We always are wrong, aren't we ? Why is there nothing more boring than frustrated Southern Europeans.

Always the same story from you - those that manage to stay afloat are wrong and those that fail permanently are right. Potentially, you should take some time off and re-think your attitude.

MilovanDjilas in reply to SinnFrei

Who has failed permanently? That sounds like a very harsh and final judgement to lay on an entire people.

"Those that manage to stay afloat"? You mean, "Might Makes Right"? Sounds like a very barbarian ideal. And how does one manage to stay afloat? By dumping responsibility for their own actions onto others? Like Germany over-lending in a number of European countries and then dumping onto Italian taxpayers the bill for the hangover, throughout the various bailout funds?

MilovanDjilas in reply to Marie Clear

Perhaps, but the Italian Banking Association has already made a public statement in support of the American bankers' initiative to suspend Basle III. In the meantime the Germans are arguing for its application - as is the European Banking Authority (headed by an Italian who is rapidly becoming one of the most unpopular persons in our country.)

SinnFrei in reply to MilovanDjilas

"hat sounds like a very harsh and final judgement..."

Well, the truth sometimes is harsh. And Greece can hardly be seen as a successful state. Just compare it with Ireland. And you will see that there is a big gap between the North and the South of Europe. Boils down to mentality and customs forged over hundreds of years. So, I stick to my judgment, harsh and whatnot. Stop being such puss*es. Be more Irish (if you do not be more German).



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