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Europe
Germany drawing up plans for Greece to leave the euro
2012-02-19
The German finance ministry is actively pushing for Greece to declare itself bankrupt and to agree a "haircut" on the bulk of its debts held by banks, a move that would be classed as a default by financial markets.

Eurozone finance ministers meet on Monday to approve the next tranche of loans from the EU and the International Monetary Fund, designed to stave off national bankruptcy while the new Greek government puts the country's finances in order.
But the severe austerity measures being demanded have caused such fury in Greece, and the cuts required are so deep, that Wolfgang Schäuble, the German finance minister, does not believe that any government would be able to implement them.

His pessimism has been tipped into despair with a secret European Commission, Central and IMF report that even if Greece made good on its promises, it would not be enough to reach the target of bringing total debt to 120 per cent of GDP by 2020.

"He just thinks the Greeks cannot do what needs to be done. And even if by some miracle they did what has been promised, he - and a growing group - are convinced it will not pull Greece out the hole," said a eurozone official. "The idea instead is that the Greek government should officially declare itself bankrupt and begin negotiating an even bigger cut with its creditors. For Schäuble, it is more a question of when, not if."

The German finance minister's comments are certain to plunge the authorities in Athens into even deeper gloom. On Saturday they tried to sound optimistic, with a cabinet meeting to thrash out the final details of an austerity package.
Posted by:Steve White

#14  "those who promote collectivism just look like a bunch of assholes looking for a reason to snatch other people's money"

In other words, exactly what they are.
Posted by: Barbara   2012-02-19 20:02  

#13  And its the real problem with socialism publically, with communism dear leader can open the book of Mao and say the poor are blessed to toil the soil and should go there...quietly disappearing. This, there are no poor in the effect that all are graduates of star fleet and any sign otherwise is a failure of the core concept of socialism that is all succeed if given the opportunity. Without that fig leaf, those who promote collectivism just look like a bunch of assholes looking for a reason to snatch other people's money.
Posted by: swksvolFF   2012-02-19 17:43  

#12  Save the caryotids.

Tourism is an industry so long as your guests don't go home and talk about how they got screwed and glued on the trip, because the isles are barking feautiful along with many parts of the mainland.
Posted by: swksvolFF   2012-02-19 17:24  

#11  Interesting view contra:

What's lost in this subtext is the responsibility of the lender. Yes, nobody forced Greece to borrow 200 billion euros (or whatever the true total may be), but then nobody forced the lenders to extend the credit in the first place.

Consider an individual who is a visibly poor credit risk. He would like to borrow money to blow on consumption and then stiff the lender, but since he cannot create credit, he has to live within his means.

Now a lender comes along who can create credit out of thin air (via fractional reserve banking) and offers this poor credit risk $100,000 in collateral-free debt at low rates of interest.

Who is responsible for the creation and extension of credit? The borrower or the lender? Answer: the lender.

When Debt Is More Important Than People, The System Is Evil
Posted by: RandomJD   2012-02-19 16:22  

#10  In other news...
Bouncers drawing up plans for aggressive, woman-abusing drunkard to leave nightclub.
Posted by: Bright Pebbles   2012-02-19 13:58  

#9  ...Frank, you might want to also get an option on a claim for those marbles someone else is holding when you sign the bill of sale.
Posted by: Procopius2k   2012-02-19 13:53  

#8  Ok, Commodore Frank, you take the Parthenon and M'Lady will bid on the Feta Cheese plant.
Posted by: Alaska Paul    2012-02-19 13:21  

#7  I'm gonna bid on the Parthenon
Posted by: Frank G   2012-02-19 11:49  

#6  Yeah, whatever. The basic problem is that the Greeks spend more money than they make. Period. No financial wizardry will ever cure that problem. Only the Greeks can do that for themselves, and it's obvious that they are incapable of doing it.
Posted by: gromky   2012-02-19 10:45  

#5  Speaking of which... much American industry is nothing more than rebranding and logos these days so we can't talk. (Dell, HP, even Apple nie FoxConn, the auto companies etc..)

Posted by: 3dc   2012-02-19 10:18  

#4  Barbara and Germany.. let's be honest. Hosting the Olympics was the straw that broke the camels back and started the whole house of cards blowing down. The last industry that Greece had was Onassis shipping. When she married a Russian and then died.... the biz was then Russian. The only other industry is ag and with tradition and small farms... So... house of cards. (oh some call tourism an industry but it's a bit fickle for that... just ask Egypt or Mexico...)
Posted by: 3dc   2012-02-19 10:16  

#3  That last paragraph sounds good in theory, 'moose, but I'm not sure anybody in Greece knows what a budget is - let alone how to make one. :-(
Posted by: Barbara   2012-02-19 10:09  

#2  I think the cold realism of the German financial types is finally starting to overcome the idealistic fatalism of the internationalist Europhiles.

I still think that once Greece is out of the Euro, recovery will be much easier, with the ECB using the Papiermark => Rentenmark => Reichsmark model to get Greece out of the hole.

Using that model, the ECB could act as the wholesaler of *everything* Greece can export, selling it to the rest of Europe at a markup, which would go to Greece's creditors, yet still get Greece some income.

Then, anything the rest of Europe produces in abundance, say a good crop of something, can be sold to Greece at discounted prices. Thus allowing Greece to use its money for other things.

Once that situation is flowing smoothly, Greece will know what its "absolute income" is; how much money they have in the bank, as it were, and they cannot spend even a single Drachma more than that.

Then the Greek government tells the people to calculate out their budget: who gets what and how much. In the final analysis, then they can work up a dozen different budgets, all with the same bottom line, and have a referendum on it.
Posted by: Anonymoose   2012-02-19 09:15  

#1  Who bought them a clue?
Posted by: Nimble Spemble   2012-02-19 08:16  

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