Greece and the EU are having their final showdown (I tell you final! This time we mean it! Lather, rinse, repeat!) over the Greek debt crises. Until they do it all over again two months from now.
Some people wonder just what all this has to do with the U.S. economy? Well, the one good thing about having a crack house at the end of the street: No one worries about how crappy your own house looks, because it’s great by comparison. But once the PIIGS start defaulting, getting kicked out of the EuroZone, or both, people are going to start to notice that Obama hasn’t mowed the lawn in months…
Metaphors! I mix them! Now back to all that exciting Euro-defaulting action:
A startling infographic of just how much money has been lent to the PIIGS.
Europe tells Greece take the deal or else. Of course, as Bob Dylan once noted: “When you got nothin, you got nothin to lose.” At this point, who does throwing Greece out of the EuroZone hurt worse: Greece, or Europe? Alternate metaphor: Maybe you should have cut off that gangrenous toe before it spread to your thigh…
And what’s this unacceptable demand Europe is making? To cut deficit spending by…1.5% of GDP. For a country running a deficit of, what, 9% of GDP? “Son, you’ve got to promise you’ll cut down on shooting smack by one-sixth.” Hey Greece (and, for that matter, Europe. And Obama): How about you (and try to keep up with me here) stop all deficit spending? That would take care of the problem, no?
The real reason Germany is asking for total control of Greek finance in exchange for the next bailout? To make Greece say no so they don’t have to bail out the rest of the PIIGS: “How do you preclude Portugal, Ireland and, indeed, Spain from asking for the same deal as Greece, if the negotiations succeed? Answer; you can’t. So the Germans throw a politically impossible demand in front of the Greeks, in effect saying, “No more money unless you effectively surrender your national sovereignty.” And that’s the implied warning ahead for the other periphery countries which look to secure the deal currently on the table for Greece. In effect, the Germans (behind the auspices of the troika) are saying, “It’s fiscal austerity on our terms. You try to renegotiate like the Greeks and we take you over. The other alternative is that you leave.”
This article goes into detail about how exactly they lied.
The leader of the Greek Coalition of the Radical Left says the EU won’t dare kick Greece out. And he also wants a three-year suspension of all payments by Greece to foreign creditors. He may be on to something. When you owe the bank $3,000, you have a problem. When you owe the bank $30 billion, the bank has a problem. The OJ Simpson/Clevon Little technique of holding a gun to your own head just might work. “Do what he says! He’s crazy!”
I already had that written when Instapundit linked Megan McCardle having much the same thought.
Youth unemployment i various European countries. It’s above 50% in Spain.
Alexander Hamilton 1, the EU 0.
Spain’s fourth largest airline collapses. “The airline was seen as a flagship of the regional government of Catalonia, which had helped it stay afloat with more than 150m euros of subsidies. The government refused to provide more funding on Friday.”
Tags: Blazing Saddles, Euro, Europe, European Debt Crisis, Germany, Greece, PIIGS, Spain
This entry was posted on Monday, February 6th, 2012 at 8:01 AM and is filed under Budget, Economics, Foreign Policy, Waste and Fraud. You can follow any responses to this entry through the RSS 2.0 feed.
You can leave a response, or trackback from your own site.
[…] Presumably those “tough cuts” would be the ones reducing the annual budget deficit from 9% to 7.5% of GDP. They’re don’t even require Greece to stop digging, they just want them to dig slower. […]